There is a mechanism to make it work

Global loss-and-damage funds based on real-time climate data: A case study of Bangladesh, the OS-Climate project

It is crucial to adapt. Around 10% of cities urgently need it, some desperately. Experience gained in Bangladesh and elsewhere should be shared, and part of the loss-and-damage funding used to create resilient urban habitats.

Our proposed methodology takes into account cities. We call on networks such as C40 Cities to look into the possibilities of collaborations between states. The data on weather is very important for low- and middle-income countries.

The improved data that goes into the models is also a priority. A basic mechanism should be set up by COP29 next year, with the ambition of having a working platform by COP30 in 2025. To gain the trust of participants in the loss-and-damage fund, the methods, data and code need to be peer reviewed and transparent.

A UN body should be tasked with helping to fund model improvements. The public–private partnership should involve the creation of tools and data for the open-source domain. The OS-Climate project is one candidate platform.

The use of models to help determine who should pay into the fund is recommended by the COP28 negotiators.

Here, we set out how such a system might work. Assessing how climate change is affecting loss and damage in locations around the world, creating fair criteria for calculating payments, and developing a trusted mechanism for managing the fund are three key steps.

More than one person has begun to develop a model like R.H.C., B.K. and D.L. at QuTec.

The Loss-and-Dammage Fund: A Case Study of New Orleans, the United Kingdom and its Importance for Climate Justice

Practical mechanisms need to be invented to collect money. The United Kingdom has imposed a tax on insurance at a rate of 12% or 20%, depending on the product. The revenues could be directed to the UN’s loss-and-damage fund. Another option is to tax fossil fuels.

That is the fourth and perhaps most important matter. A nation-only approach is insensitive to local problems and resource levels. It is important that the calculations be detail enough to reveal needs for net-donating and net-recipient countries. Granular data provide information that governments can use in deciding where to allocate funds. The Lower Ninth Ward of New Orleans, home to many low-income families, was badly affected by the hurricanes of 2005 and 2005. Many people never came back.

A fund to address climate-related loss and damage was established last year at the 27th United Nations Climate Change Conference. At the end of this month, recommendations on the basics of the fund are expected to be set out.

The UN Convention on Climate Change is based on equal representation by LMICs and HICs, and must underpin the loss-and-damage fund. At a minimum, the composition of the fund’s board needs to be balanced. But extra steps are also needed to achieve equitable participation by people in LMICs.

Climate justice is one of the questions at the center of these issues. If a country didn’t contribute much to global emissions, why should they suffer the same consequences as those who did? Is a developed economy, such as the United States, liable for the consequences of its historical emissions?

Climate Change Programs in Low- and Middle-Income Countries: What Have They Learned from the Workings of the Green Climate Fund?

There are very little weather stations in low- and middle-income countries. Africa has 386 radar weather stations, which is the same number as Europe and the US combined, or around 600. Loss-and-damage calculations, as well as early warning systems, and nowcasting, will need to be funded, along with weather monitoring, to support them.

This year has given ample evidence of how emerging economies are bearing the brunt of climate change. In February and March, Cyclone Freddy raged across the Indian Ocean for 5 weeks and made landfall 3 times, killing more than 1,400 people in Malawi and elsewhere in southeastern Africa. Dozens of people and thousands of others were displaced during the summer in Algeria as a result of 50 C heat and fires. The port city of Derna, Libya, was devastated by floods in September that killed more than 11,000 people. Elsewhere, melting ice, rising seas, extreme heat and drought are wreaking havoc from the poles to small Pacific islands2 .

It won’t be a full picture — negotiations are continuing and it will take time for the details to be worked out. The release of small grants to support the most vulnerable people who are experiencing climate impacts is necessary in order for certain parts of the fund to operate.

Laura, with her co-authors, studied the workings of the Green Climate Fund to see what lessons they could learn from it. Established in 2010 and funded by higher-income countries, this is the world’s largest fund for climate mitigation and adaptation projects in low- and middle-income countries. The average length of time it takes to approve a project is two years, that’s what the researchers found. One-fifth of projects take between three and five years. Out of $13.5 billion in grants and loans it had only $3.6 billion left to disburse.

But it hasn’t been all smooth sailing: the GCF has been widely criticized for being too slow, difficult to access and risk averse. One-fifth of the projects take 3–5 years to be approved, and the average is more than two years. By contrast, humanitarian organizations such as the International Federation of Red Cross and Red Crescent Movement respond in hours to disasters such as the massive flood in September that hit the port city of Derna in Libya.

In our view, the loss-and-damage fund should adopt a learning-by-doing approach, with initial allocations treated as experiments, demonstrations or pilots. The fund should work with researchers to document how money is spent and how effective the measures are. It is the goal to deepen knowledge about how to address loss and damage. Larger awards and alternative forms of financing can be added later.

First, to get going, an initial call for proposals should be developed for disbursing small grants of $50,000–100,000 by the end of 2024. All stakeholders should be consulted when developing rules for accessing those funds.

There is a need for a wider range of organizations, including NGOs, to be able to access loss- and damage funds. Climate outcomes are stronger when communities are involved in decision-making and responsible for their own adaptation2. The mangrove survival rate was higher in Vietnam in one mangrove-forest restoration scheme due to community engagement.

Accreditation processes should not take up too much time. To start with, for example, national governments could nominate eligible organizations to access support from the fund. The lengthy processes use by the GCF can take years to complete and require resources, such as three years of audited accounts and past experience, that many groups don’t have. Many LMICs and sub-national groups are effectively shut out of the GCF if they don’t have enough information to apply.

The Global Environment Facility has given out $725 million to more than 26,000 projects since it began in 1992. Lessons can also be drawn from the Climate Justice Resilience Fund, the director of which had authority in an initial round to approve funding at levels below $100,000 without going through a full board review and approval process. The loss-and-damage fund could also appoint people to approve small proposals to avoid bias.

Cash transfers for people forced to relocate after a flood should be one of the reasons applicants should get pre-approved for funds. Bangladesh receives cash transfers from the UN World Food Program. The transfers made it possible for livestock owners to purchase fodder in advance of the monsoon without having to sell their assets.

In the first hours after a disaster, Bangladesh uses a single page form called the “SOS form” that estimates losses and damages and judges emergency response needs. Within three weeks, detailed assessments are done using a simple form.

The Need for Additionality in Climate Change Funding for Small Island States: A Review of the Alliance of Small Islands, and a Recommendation

The fund should use clear, simple language in its proposal requests; technical language can be a barrier. For example, what is required to demonstrate the shift potential of a GCF project? Even members of the GCF board have admitted not knowing.

The principles of mutuality, solidarity and accountability should be framed around insurance-based mechanisms for loss and damage. People who are vulnerable often cannot afford to pay for insurance. And insurers might set a high bar for triggering a payment, leaving people unable to claim in the aftermath of a disaster. In 1991, the organization Alliance of Small Island States suggested setting up an insurance pool funded by HICs to compensate small islands and LMICs for climate impacts.

Funding should not be a condition of co-financing, since it would limit which damage and loss would be supported. Again, this differs from the GCF, which seeks to mobilize further funding for climate action, often from the private sector.

The fund will not be able to cover all losses and damages, which might amount to more than $435 billion by 2030 and $1 trillion by 2050 for LMICs (see go.nature.com/3fpzmqm). Guidance on what and who the fund can support is crucial, to ensure that expectations are set appropriately, the process is transparent and applicants do not waste time, energy and capital making requests that cannot be financed.

The need to demonstrate additionality is one of the issues that has plagued adaptation projects in the GCF. It is difficult to divide climate change from development and fund just the climate portion. A survey respondents said that the development and climate change has become an integrated approach for a small island because it needs its small population and isolated geography.

Vulnerability is multifaceted and such reductionist approaches do not account for social drivers such as poverty and social exclusion9. Relying on climate attribution analyses, which study whether human influence might have contributed to extreme climate events, are limited to physical impacts and are complicated to produce, and would cause similar issues.

We would recommend that the fund embrace the principles of locally led adaptation, and enable recipients to articulate their needs on their terms. This has never been done before, so it is impossible to pre-define what this will look like, but a commitment to community engagement and collaboration, risk-taking and an appetite for learning from mistakes will be key.

A consensus should not be required for decisions. The UNFCCC often depends on one when approving decisions. However, that leads to delay and enables any one board member to block decisions. The loss and damage fund should make it clear that a two-thirds majority can approve any funding decision if the board fails to reach consensus.

It is not always possible for equal representation to ensure equal participation in shaping funding decisions. Its board consists of 12 members from LMICs, the same number from HICs, and 4 observers from civil society and the private sector. In the 181 proposal deliberations we examined, HIC board members had more concerns than the LMICs. And more time was spent discussing the critiques from HICs.

Civil-society participation needs to be given greater authority. Weak gender integration in implementation plans was one of the human-rights concerns drawn to attention by observers in the GCF deliberations. They also spotted problems — for example, the GCF rules do not explicitly prevent the funding of fossil fuels.

Yet, although the observers were vocal (expressing 461 concerns), their points were rarely incorporated into final board decisions. The board attached conditions to 49 of the 181 projects. Fourteen of the conditions were based on the concerns raised by civil society. The HIC board members raised the conditions on all 49 projects.

We advise that the loss-and-damage fund has a 24 member board that should include members from each of the LMICs, HICs and civil society. The fund should also develop guidance on approaches that are not permissible, such as funding fossil fuels.

Climate Finance: Supporting Climate-Vulnerable Countries through Economic and Human-Tensor Research and the Action that Climate Change Can Empower

Huq passed away unexpectedly last month. He advocated for environmental policy decisions to be built on science. In Bangladesh, for example, he helped to create institutions where people who are not scientists work with researchers in the search for answers to their problems.

Teams of researchers all over the world are working night and day, searching for ideas to break the log-jam. Huq is an author of two commentaries that are intended to do that.

Questions about who will pay and how much have yet to be answered. The higher-income countries do not want to be legally bound to contribute, with many seeing that as a slippery slope to reparations. Yet, that is precisely what many climate-vulnerable countries want. Middle income countries such as Pakistan and Libya would not be eligible for funding due to the effects of devastating climate-related flooding.

But loss-and-damage funding takes climate finance into a new arena. It is intended to support recovery from the losses — of jobs, for example — and damage, such as that caused to infrastructure, that occur when climate-vulnerable countries are hit by more frequent and more ferocious extreme-weather events as a result of climate change.