Loss and damage fund must work for Africa

As the world convenes in Dubai for COP28, developing countries will be looking out for opportunities to scale up action against the “loss and damage” arising from climate change.

The principle of “Loss and Damage” acknowledges the irreversible adverse impacts and economic losses already underway as a result of years of denial and lack of attention to climate change issues. Unfortunately, the most vulnerable are least equipped to fight climate change.

Hence, we expect Africa to be among priority beneficiaries, given that the continent has contributed the least to the global climate crisis, estimated at 3 per cent, yet suffers the most significant losses due to its limited adaptive capacities. Agriculture in Africa, heavily reliant on rainfall, bears the brunt of climate-related damages, impacting energy production, water resources, the environment, and infrastructure.

These challenges lead to suppressed GDP, forcing governments to redirect resources to food imports, social protection and aid.

In countries heavily reliant on agriculture, constituting over 43 per cent of GDP in 2018, these impacts can slash national GDP by up to 4 per cent annually. From 1990 to 2019, floods and droughts notably hampered African countries’ GDP per capita. Covid-19 and global security issues have further exacerbated these challenges, reducing the average national GDP by up to 10 per cent.

The situation is dire in highly vulnerable regions of the Sahel, Horn of Africa, and countries along the Equator, which continue to suffer inter-annual and longer-term changes in rainfall patterns, extreme temperatures, recurring droughts, floods, dust storms, and heatwaves, among others.

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These adverse conditions and more frequent extreme climate events make it difficult for farmers to produce, store, and market food, leading to increased food shortages that cause price volatility. African countries have increased debt levels, and this, combined with the severe climate shocks, is likely to impede growth and threaten decades of developmental progress.

At COP27 in Egypt last year, the decision to create the Loss and Damage Fund represented a historical breakthrough, recognising the injustices in distributing the burden of responsibility. The Fund aims to finance developing countries deal with negative consequences of climate change and help them rebuild physical and social infrastructure.

So far, negotiations have been underway to address the many considerations required to operationalise the Fund. We appreciate the consensus to host the Fund at the World Bank for four years. However, recognising the urgent need for a coordinated response, it is the hope and expectation of many that leaders at COP28 will raise the financial resources required to activate the Fund, and establish a clear timeframe for its operationalisation.

From an African perspective, critical considerations for COP28 regarding the Loss and Damage Fund encompass various crucial aspects. These include urgency of speed and urgent action to address severe and irreversible climate consequences, underlining the historical context of climate funds that took years to become effective.

Additionally, Africa advocates strong, robust, and flexible compensation mechanisms, highlighting the importance of clear criteria, transparency and accountability.

The Fund’s replenishment involves targets for regular replenishment from high-emission countries, international donors, development agencies, and philanthropic organisations, aligning with its vision for effective operation. Private sector involvement is encouraged through public-private partnerships, climate bonds, insurance, and CSR initiatives.

Ultimately, stakeholders must work for an independent oversight body for the Fund, since the governance of the Fund by the World Bank is temporary. Global leaders must ensure the Loss and Damage Fund becomes a catalyst for recovery and sustainable development.

-Ms Kalibata is AGRA president and Mr Sene is MD of AFS Forum