Loss and Damage Fund: A Mitigation Tool To Help India Face Climate Disasters

Michaung, the fourth tropical cyclone over the Bay of Bengal this year, made landfall in Tamil Nadu on Tuesday, lashing the coast at a maximum sustained wind speed of 90-110 kmph, causing heavy rainfall.

While the flooding of Chennai can also be blamed on several factors including water management issues in the city, the trigger was the tropical cyclone and the rain which it brought. Analysts say that the intensity of cyclones hitting the sub-continent has increased over the years because of global warming.

Events like Michaung were on the minds of delegates at COP28 in Dubai when they operationalised the Loss and Damage Fund (LDF), a global financial package set up to make good losses suffered by developing countries due to climate change.

“There is a need to operationalise the loss and damage fund quickly and work on regular replenishments, as it is not enough to meet the needs of the developing world,” Dr. Jaya Singh Verma, policy expert told The Secretariat.

She added, “India needs to negotiate access to these funds as our country is amongst the top three South and South East Asian nations that are vulnerable to climate disasters.”

So far the total amount pledged to the Fund has totalled US $725 million. UAE and Germany have pledged to contribute US $100 million each, whereas the UK and the US committed US $76 million and US $17.5 million respectively. Italy and France committed the most at US $108 million each.

The developing nations will have access to the money from the World Bank that has been appointed as the manager of the fund for the next four years.

Why is the Loss and Damage Fund needed?

The Loss and Damage Fund (LDF) is considered to be a form of reparation to make up for the climate change disasters which are believed to have been caused by historical carbon emissions by the developed countries while they were industrialising.

More low and middle-income countries are facing the consequences of climate change now because of the carbon emissions during the 19th and first half of the 20th centuries.

US, EU, Russia, Japan, and other high-income nations account for 75 per cent of historical carbon emissions that can be traced back to the industrial era, according to data collated by Center for Global Development, a non profit think tank.

A report by the University of Delaware reveals that low and middle-income countries have capital losses amounting to US $2.1 trillion due to climate change and global warming, arising out of this historical pollution by the developed North.

While India is slowly but steadily progressing in the fight against climate change by adopting costly green technologies, climbing up to rank 7th on the Climate Change Performance Index (CCPI) 2024, it still needs more resources to set right the effects of climate disasters hitting it from time to time.

Analysts point out that is where the LDF can play a huge role, even though it is in effect a temporary patch-up of a wound that requires a more comprehensive treatment.

“The operationalisation of this fund can remedy the issues in countries like India. Although, we need to note that this fund is not preventive in nature and is rather a mitigation measure,” Anushree Joshi, Climate and Sustainability Researcher at BCG India, told the Secretariat.

Joshi also cautioned, “The environmental loss and damage will continue to happen unless we take a step back and invest in technologies and preventative measures that stop such climate crises from taking place. We need to assess if we should focus on mitigation after a crisis has happened or whether we need to focus on the root causes of climate crises and address them.”

India was placed at the 7th spot as being amongst the worst affected nations in 2019 due to climate change and global warming, according to the Climate Risk Index, published by Germanwatch, an independent development, environmental, and human rights organisation. The report by Germanwatch also revealed that the country was most affected by the yearly monsoon season in the year 2019.

The rainfall-triggered floods that wreaked havoc this year in Himachal Pradesh and Uttarakhand; similar floods triggered due to glacial lake outburst in Sikkim are seen as part of the climate crises that continues.

Other than floods, cyclones, erratic rains and glacier melts, the country also faces the fury of heatwaves, droughts, and rising sea levels. The intensity and frequency of these disasters are seen as directly linked to global warming.

The Ministry of Environment, Forest and Climate Change’s statement issued earlier this month, on the ill effects of climate change, highlighted that farming as a whole, and the horticulture sector in particular, is vulnerable to unseasonal rain and erratic temperature conditions.

A report by National Disaster Management reveals that an average of 75 Lakh hectares of land is annually affected due to floods and the annual average of damage rendered on crops, houses, and public utilities amounts to Rs 1805 crores.

The states of Haryana, UP, Bihar, Assam, Odisha, Andhra Pradesh, Himachal Pradesh, and Gujarat are considered to be the most flood-prone.

In 2022, the economic loss due to floods in India amounted to US $4.2 billion according to a report by the World Meteorological Organisation.

On the other hand, states that are dominantly impacted by heat waves are Punjab, Haryana, Delhi, Uttar Pradesh, Bihar, Jharkhand, West Bengal, and Odisha.

A Climate Transparency report revealed that the increased temperature had led to India suffering an income loss of 5.4 per cent of its GDP in 2021.

India's drought-prone areas have increased by 57 per cent since 1997, revealed a report by the World Bank Organisation.

Dr Verma explained, “Many states in India are vulnerable to both slow and rapid onset events of disasters due to climate-induced disasters like floods, droughts, landslides, cyclones, heat stress, and pollution.”

At the same time, annually 2 million people die of pollution-related illnesses in South Asia. Researchers say that climate change is aggravating pollution and heat stress.

“I believe that there is not enough focus on community-based approaches to help people on the frontline to adapt to climate challenges.” the policy expert said, adding “There are states in India that are already helping the people on the adaptation front, however, there is a need to scale up practices to equip vulnerable people with skills, knowledge, and technologies to combat climate change.”

Throwing money at the problem won’t really solve it, especially in the case of global warming, but the least it can do is give a financial breather to the low or middle-income and developing nations. The Loss and Damage fund may increasingly become the way forward in climate justice.