The discussions around making the Loss and Damage Fund (LDF) fully operational by the 28th Conference of Parties (COP28) to the United Nations Framework Convention on Climate Change (UNFCC) seem to be heading in the wrong direction due to divergent views about the scope, scale and sources of the fund among developed and developing countries.

The Subsidiary Body (SB) conference at Bonn could be an opportunity for course correction to COP28, which will be held in the United Arab Emirates (UAE) later this year.

Also read: High road to Dubai COP28: Why discussions on carbon credits are important at upcoming Bonn climate conference

LDF was brought into existence at the COP27 in Sharm El Sheikh, Egypt, last November after a decades-long struggle by developing countries. The fund is essential for ensuring new, additional and predictable finance for communities most affected by rapid onset impacts of climate change, such as tropical cyclones, and slow onset impacts, such as sea level rise.

Among the 24 members of a Transitional Committee (TC) that was formed in March, 14 are from developing countries, and 10 are from developed countries. The committee’s formation was mandated by the decision text on LDF agreed upon at COP27, and its function was to make recommendations to COP28 towards the full operationalisation of the LDF.

The committee members had their first meeting from March 27 to March 29. In the first meeting, a work plan for the rest of the year was decided upon, which included the addition of a fourth meeting of the committee to the earlier three.

The members also decided that all the aspects of the LDF, such as the sources of the fund and other funding arrangements outside it and how these would be delivered to the communities/countries in need of the funds, would be discussed in each of the meetings.

In the first meeting, members agreed upon most things in principle, though fissures had begun to emerge about the scope and scale of the fund. They also decided on the importance that should be given to funding arrangements outside of the UNFCCC process, such as the Global Shield being led by the V20 group of vulnerable countries and the G7 group of developed countries.

After the first meeting, a workshop was held for the members from April 29 to April 30, wherein different humanitarian and environmental organisations and multinational development banks gave presentations about case studies related to addressing loss and damage.

By the second meeting from May 25-27, the Transitional Committee seems clearly divided between the global north and global south on the very focus of what the character of the fund should be.

At the SB 58, the second Glasgow Dialogue on June 8-10 would be an opportunity for the two sides to come together and course correct for the rest of the two TC meetings so that their recommendations for the COP can be delivered in time.

The developed countries want to minimise the scope of the LDF to addressing non-economic losses from slow onset impacts of climate change such as sea level rise.

Also read: High road to Dubai COP28: Climate finance will be key at Bonn Climate Conference

For relief and recovery after rapid onset events such as tropical cyclones, the developed countries want to rope in humanitarian agencies such as the International Federation of Red Cross and Red Crescent Societies and provide them with funding arrangements outside the UNFCCC process, such as the Global Shield which is predominantly based on insurance instruments with some social protection measures.

The humanitarian agencies are already overstretched with fatigue setting in for their donors. The scale, speed and access required for the LDF, especially in the context of continuous extreme weather events faced by countries, won’t be delivered by relying heavily on humanitarian agencies. However, their role cannot be downplayed.

“The developed countries basically want to minimise their contributions to the LDF and that is why they want to limit its scope as it would be under the UN process and the other funding arrangements outside the UN process such as the Global Shield would be more under their control,” said Harjeet Singh of the non-profit Climate Action Network International.

“Geopolitics should not decide the scale, scope and functioning of the LDF,” Singh added.

On the other hand, developing countries are calling for a grant-based, easily accessible LDF that has a broad scope and scale and can quickly disburse money to the communities in need of the fund. They also want it to be set up inside the UNFCCC process and governed by COP, with priority given to direct access to the funds for communities.

The funding sources should be expanded to include innovative sources such as taxes and levies in line with the principles of equity and common but differentiated responsibilities. This could include taxes on Shipping and aviation sectors and contributions from historical emitters of greenhouse gases.

This is because the most affected by the extreme weather events are also the least responsible for the greenhouse gas emissions that have caused the planet to warm by 1.1°C and changed major aspects of its climate, including extreme weather events.

The current sources of climate finance are mostly loan based, which increases the debt burden of developing countries that are already facing development challenges. LDF should also act as an oversight mechanism which would monitor the activities undertaken by the fund and assess if they have their intended impact.

Hence its governance is of utmost importance, which is being considered to be under the Santiago Network for Loss and Damage, which already has the mandate to advise countries on the technical aspects of Loss and Damage. A separate and new LDF with its own governance is the need of the hour.

This is not to undermine the roles of governments, whether national or local, in acting as the coordination nodes for the disbursements of the fund. All these aspects would hopefully be discussed and ironed out at the second Glasgow Dialogue at the SB 58.

Read more:

There are a number of traditional conservationists who dismiss the works covered under the broader sustainability/nature-based solutions framing as a bit of baloney. On the other hand, there are hardcore business folks who almost always feel a false sense of piety towards the sustainability agenda. 

As controversial as it sounds, for many decades, the conflation between both these opinions has remained synonymous with the idea of ‘greenwashing’ the existing human impact on the environment. 

It is imperative to interpret the distinction between the words. Sustainability in the context of the “E” in Environment, Social and Governance (ESG) risk discussions typically includes managing and avoiding the depletion of natural resources to maintain global ecological balance (nature and people together as opposed to people vs nature).

Also read: The deception of greenwashing in fast fashion

Whereas, greenwashing is typically corporate action to be perceived as environmentally conscious for marketing purposes without any notable sustainability efforts (content vs intent).

Good intentions do not guarantee environmental sustainability, but they are not equivalent to greenwashing. The development sector is rife with examples of local non-profits working in the field and not getting adequate credit for it as well as civil society organisations (CSO) and consumers losing faith in corporate claims around sustainability owing to years of greenwashing. 

Traditional conservationists often argue that the conflict between human lives today and the environment (people vs nature) is exemplified by work in the sustainability domain. But business needs to be managed in the context of the planet and a utopic interpretation thereof.

While both schools of thought must be acknowledged, this conflation is a cause for dissent (and exclusion) within the sector itself and runs the greater risk of dismissing significant efforts being made to do better.

At its core, sustainability is the ability to maintain or support a process over time. What is required is perhaps the strengthening of a better understanding and a space for deeper engagement and collaboration.

While conservation is more action-focused on specific areas (landscape, theme, species), sustainability remains a bit more overarching. It is a strategic process of convening multiple stakeholders around a policy objective and programme strategies that would augment the work being done through conservation approaches.

Supporters of sustainability are far too often at loggerheads on how conservationist approaches expect the proverbial silver bullet and that the single-minded focus on protection and reduction alone would not percolate to human behaviour. There is merit in working at the intersection of people and nature rather than on only one or the other. Moreover, the radical transformation required by conservationists may necessarily come at an uneven cost. 

At this stage of CSO action, decoupling sustainability and greenwashing is imperative. Most sustainability practitioners use the pivot that sustainability is really building a case for protection, prevention and inclusion.

Also read: India’s evolving carbon market: Eye on policies for uniform emissions trading, Net Zero

As this understanding grows and new workstreams and jobs open (ESG in the finance sector is currently booming), wildlife biologists are being onboarded in consulting companies, including the Big4. And almost every consumer-facing brand has sustainability jobs opening up in the procurement/supply chain verticals.

There is no way around taking sustainability seriously. Even as it may be dismissed as a do-gooder approach, companies confuse doing good with tree-hugging or radical idealistic behaviour. These are mutually exclusive but not necessarily the same. 

Given the world’s established market dynamics and value chains playing out against ever-evolving geopolitics, any real market transformation would disproportionately impact the world order. While the developed countries (and erstwhile colonisers) may have the economic outlay to make the fast-moving changes, the developing world may not necessarily be able to keep up.

An example is the recent European Deforestation Regulation (EUDR) — an initiative to limit deforestation caused by forestry and agricultural activities all over the world. Climate advocacy groups are celebrating the law as a landmark in targeting deforestation risk related to cattle, cocoa, coffee, palm oil, rubber, soy and wood, as well as commodities that have been fed by or made using those products, such as leather, chocolate, printed paper and furniture.

While governments lead the regulation and hope to ensure that companies verify the origins of the products to ensure that these are not sourced from an area that was subject to deforestation or forest degradation after 2020, there are concerns. An important and emerging criticism of the law is that it might not be enough to stop deforestation as it misses regulations on biomass imports, such as the burning of wood pellets, which the EU considers carbon neutral despite contributing to significant forest loss.

The law also does not include at-risk ecosystems that are not rainforests. How the EUDR plays out and impacts global agricultural trade and continued soft power while simultaneously addressing climate and poverty risks in developing nations will be important. 

Read more: Emissions Gap Report 2022: Pledges to cut greenhouse gas emissions way off track

In the case of deforestation, commodity chains like soyabeans, coffee or palm oil, traditional conservationists had also initially missed that consumers, as well as smallholders producers (especially from Asia, Latin America and Africa — much of the formerly colonised and now developing world), are stakeholders in the conversation.

As long as consumers exist, production, large and small, will produce at the cost of the forests. Many years of interpretations have been brought into the narrative to address the need to dovetail corporate and consumer responsibility into the conservation agenda — which is exactly the point that sustainability makes.

Perhaps this is the stepwise approach that the EUDR will also need to work through to improve itself. And while long-term behaviour or policy change and the general movement via sustainability might not be leaps and bounds in a short period of time, these would be paced steps that do not need to be retracted. 

One of the many ambitions hosted within the sustainability narrative is the harmonisation of protecting both nature and people juxtaposed against the current political and economic world order.

As the United Nations Framework Convention on Climate Change’s common but differentiated responsibilities says: The aim is minimum disruption and destruction — not to destroy the planet, the environment and the existing human life and ensure that this life remains available to future generations in its totality. With this understanding, countries and companies are building sustainability reporting into everyday action and attempting to turn theoretical issues into concrete actions.

A large part of this also aims to help organisations set priorities to reach environmental and social impact goals by exposing both positive or negative impacts on the planet, society and the economy.

Fundamentally human beings are willing to do better. In India, we segregate waste. Recycling is part of Indian household systems through the customary practice of ‘raddi wallas’. The conversation on conservation often misses these local, sustainable practices because the focus of the policy is both narrow and exclusive. Empowering each consumer is the responsibility that countries and companies must start striving for.

Sustainability makes corporate production responsible and the average consumer more aware of every action — it recognises the least disruptive, most effective transformation towards living.

The world is, in fact, tangibly better if our actions are pivoted on sustainability. It isn’t the bad guy. What is perhaps required still is reinventing the narrative used around it. So far, it is a bit of an exclusive space.

Sustainability practice is beginning to take the same route as traditional conservation. There may be an opportunity for improvement in raising the level of understanding around long-term environmental sustainability rather than taking the ceiling up.

Nay saying reduces the value of any long-term positive impact that countries and companies may otherwise get — with the only other option being the subpar “business as usual”. A new normal needs to be created. The answer to unstainable practices is not a boycott but definitely a demand for more responsible sourcing.

Simply put, unless we speak to the laggards (countries and companies), only early adopters won’t be able to turn this around. Because if they had to, they would have managed.

It is not a sprint — every action counts in this marathon and every step takes everyone a bit further in addressing critical climate risks. 

Neha currently leads SPRF India, a think tank based in Delhi, working on a range of critical themes to bridge academic research and public policy. She is also the Head of Market Development  (Asia-Pacific) for the Forest  Stewardship Council and works with global teams and intersectional engagements across five countries and specialises in natural capital management, deforestation risk management and environmental sustainability.

Views expressed are the author’s own and don’t necessarily reflect those of Down To Earth