WHERE ARE WE WITH THE LOSS AND DAMAGE FUND?

• The Loss and Damage Fund has been made operational and the first call for funding applications has been published in accordance with the Barbados Implementation Modalities (BIM).
• During the first week of COP30, work was done on a streamlined draft text, essentially identical for the COP and the CMA, with the exception of a specific reference to certain paragraphs of the NCQG in the text under the CMA. The second week opens with a document with only two paragraphs still presented in brackets.

The first week of COP30 saw the launch of negotiations on the Fund for Loss and Damage (FRLD) with considerable enthusiasm. Several Parties welcomed the rapid operationalisation of the fund, including the launch of the first call for funding applications through the Barbados Implementation Modalities (BIM), which establish who can access the funds, what damages are covered, the procedures for applying for them, and the criteria for transparency and accountability.

A first series of interventions is planned for the calendar years 2025 and 2026, for which a total of $250 million has been allocated, and funding requests may be submitted to the Fund’s secretariat in a six-month window from mid-December 2025 to mid-June 2026.

The attention given to loss and damage stems, among other factors, from the understanding that adaptation actions alone cannot prevent the impacts of ongoing climate change, which will inevitably result in losses and damages—particularly in the most vulnerable countries. This makes the topic especially significant, even more so considering that loss and damage were excluded from the mandate of decision 1/CMA.6 on the New Collective Quantified Goal (NCQG) adopted in 2024.

In the first session, the contact group operating under the COP (the Conference of the Parties to the UNFCCC) and the CMA (the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement) discussed the draft text presented by the Standing Committee on Finance (SCF), the permanent committee responsible for providing analysis and recommendations on climate finance.

The G77 + China group emphasized the need to significantly increase financial resources, to ensure that the Fund can start successfully by receiving its first contributions immediately, and to guarantee that the financial mechanism operates in a predictable and timely manner, with transparent disbursement procedures that are applied equitably to all Parties.

The delegation of the Philippines, the host country of the Fund, also emphasized the need for timely and adequate resources to address the needs of the most vulnerable countries. They stressed that clear and concise guidelines are required, with explicit specifications on project funding windows, as well as locally driven approaches to capacity-building and both economic and non-economic development. From the perspective of the Philippines, capacity-building and development should also be paired with social protection measures, and the Fund should consider establishing a “gender window” to ensure targeted support for women.

The Least Developed Countries (LDCs), aligning themselves with the G77 and China, called, among other requests, for contributors to make commitments and to honor new pledges that are ambitious and proportionate to countries’ needs, while prioritizing the establishment of modalities for rapid disbursement. The Alliance of Small Island States (AOSIS) further described the replenishment of the Loss and Damage Fund as a priority and highlighted the need to accelerate the establishment of direct access modalities.

The Arab Group, together with the Least Developed Countries and in opposition to the EU, then requested the inclusion of a direct reference to the paragraph of the NCQG decision that mentions the continuation of efforts to triple public finance, including through the operating entities of the Financial Mechanism.

The European Union reiterated that the Fund’s Board is responsible for preparing the long-term fundraising strategy and for mobilizing resources.

The African Group, the EU, Canada, Australia, and the United Kingdom called for a quick decision that would give the Fund’s Board the time necessary to carry out its mandate.

The dialogue resumed on Friday with the draft decision prepared by the session co-chairs, acting on the mandate given by the delegations.

The negotiating text is identical for both conferences, the COP and the CMA, with the exception of one point under the CMA — paragraph 13 — which makes a direct reference to paragraph 16 of decision 1/CMA.6 of the NCQG, thereby accommodating the request made by the Arab Group and the Least Developed Countries (LDCs), despite the EU’s opposition.

The co-chair of the negotiating table then briefly outlined the key points of the draft text.

• The first paragraph refers to the report on the Loss and Damage Fund.
• Paragraphs 2 to 7 focus on acknowledging the rapid progress of the Board, as highlighted by the Parties in the contact group, with particular reference to the BIM and those who have supported the Fund in various ways.
• Paragraph 8 aims to capture the various priorities mentioned by the Parties in the context of the Board’s work plan, also addressing issues related to risk management, resource mobilization, strategy, coherence and complementarity, as well as rapid disbursements and small grants, in addition to access modalities and observer-related aspects, implicitly referring to specific stakeholders and groups.
• Paragraph 9 addresses the appropriateness of the decision-making process of the Board.
• Paragraph 10 looks at the future work plan, recognizing that further work remains to be done.
• Paragraphs 11 and 12 address issues related to the replenishment of resources following the conversion of commitments made by various Parties.
• Paragraphs 13 to 15 are the standard on proposed temporary guidelines on the SCF and the Board’s next report.

The room was generally supportive of the simplification being implemented in the document.

The Alliance of Small Island States (AOSIS) and the Least Developed Countries (LDCs) once again emphasized the need to prioritize direct access and the speed of disbursement. The LDCs additionally expressed their support for paragraph 8, while maintaining their position that the COP and CMA should provide guidance to the Board, and reiterated, together with the G77, that only paragraph 16 should be referenced when citing the NCQG.

The Arab Group highlighted that all developing countries have direct access to the Fund’s resources, requesting that this be explicitly stated in paragraph 8 (referring to Decision 1/CP.28, paragraph 20e), and supported the G77 and LDCs regarding the specific NCQG reference.

The European Union and Australia raised concerns about focusing on individual elements. They also mentioned that they wish to remove parts considered redundant (such as references to guidance already provided to the Fund), with the aim of producing a more concise and immediate document. Regarding paragraph 8, the EU stated that it did not want to reopen the discussion on the work plan, thus receiving support from Japan, and expressed the same approach for paragraph 9, emphasizing the importance of working on modalities without imposing a single approach.

Canada, on the other hand, requested the inclusion of a specific reference to women, youth, and Indigenous peoples in relation to observer engagement, while Japan reiterated its proposal for a process based on lessons learned from the implementation modalities of the Barbados Programme of Action for risk reduction. Additionally, together with the EU, Australia, and the United Kingdom, Tokyo continues to oppose referencing only paragraph 16 of the NCQG, arguing that other paragraphs should also be mentioned. On this point, the United Kingdom emphasized that the NCQG is not only about financial mobilization but also concerns the functioning of the funds and other related aspects.

The draft decision therefore enters the second week as a fairly streamlined text, in terms of the number of paragraphs, with brackets limited to two paragraphs.

Regarding other negotiating tracks related to Loss and Damage, it is worth noting the adoption of the conclusion on the report of the Executive Committee of the Warsaw Mechanism and the Santiago Network. Meanwhile, for the review of the same Mechanism, the subsidiary bodies have agreed to forward it to the governing bodies for consideration during the November 2025 sessions, taking into account the informal note prepared at SB63.

In the upcoming week, which will be decisive and more political, we will continue to monitor developments on this topic.

Article by Giada Fenocchio, delegate of the Italian Climate Network.

Cover image: UN Climate Change – Kiara Worth