The main objective of the United Nations Framework Convention on Climate Change (UNFCCC) is to stabilise greenhouse gas (GHG) concentration in Earth's atmosphere. Over the last three decades, it has achieved the opposite because of our indifference and disregard for the millions of climate-vulnerable people in Global South, now extended to the North as well, who are suffering the adverse impacts of climate change. The UNFCCC started with a focus on mitigation and gradually moved on to adaptation. It is evident that those are not enough, and tackling "loss and damage" is a must-do now.

The 19th climate conference, held in Warsaw, Poland in 2013, established the Warsaw International Mechanism (WIM), which works as a policy framework on the issue of loss and damage. Then the Santiago Network on Loss and Damage (SNLD) at COP25 started as a technical assistance provider in addition to knowledge and resources. However, the financial mechanism has remained a big question for a long time.

The good news came ahead of COP27 when issues related to funding arrangements to respond to loss and damage caused by human-induced climate change were incorporated as a sub-agenda under finance-related matters. After having different opinions, debates, and negotiations throughout the two-week-long climate conference in Egypt this year, the parties found a common ground and agreed on the finance mechanism for loss and damage during the extended period.

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The story behind the loss and damage fund at COP27

So COP27 decided to establish a new funding arrangement to assist developing countries regarding loss and damage, which is "new and additional." It also decided to establish a fund and a Transitional Committee to operationalise the new funding arrangement. The committee has been suggested to make recommendations to operationalise the funding arrangement at COP28 due to be held in Dubai next year, which will be a critical outline for how the funds are mobilised and utilised.

To make the fund operational, the parties also agreed to establish institutional arrangements, modalities, structure, governance, and terms of reference; define the elements of the new funding arrangements; identify and expand funding sources; and ensure coordination and complementarity with the existing arrangements.

There will be critical challenges for the Transitional Committee, such as who will provide the fund or how the new fund will be generated, and how it will be utilised. etc.

Beyond the UNFCCC process, there has been good news. The Scottish government, the pioneer in loss and damage funding, has come forward with its enhanced pledges. The Wallonia province of Belgium and Denmark were also there with their commitment; Austria and New Zealand also came forward, creating peer pressure on Global North to come out of their backsliding mindset.

They came forward with their actions on two fundamental principles. The first one is climate justice, challenging the unjust impact on climate-vulnerable nations who are not responsible for the crisis. The second one is moral obligations, and the responsibility of the developed countries.

The solidarity of the global community must be at the centre of the loss and damage finance facility. The Intergovernmental Panel on Climate Change (IPCC) has presented enormous scientific evidence, enough data and information on the table. The gravity, scope, and frequency of loss and damage are growing all over the world. Hence, the parties to the climate change convention must take an informed political position and enhanced pledges. The developed and developing countries' accountability now is to keep the positive spirit up so that the empty promise of USD 100 billion every year for adaptation is not repeated.

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Most importantly, climate-vulnerable nations and communities live amid the effects of climate change; they act, respond, and know how to address loss and damage on the ground. They do it with their best efforts and the least resources – they need support to do it right. And here comes the question of solidarity and empathy, which is more valuable than money.

As the loss and damage funding arrangement is already agreed upon, the fund mechanisms are critical as community needs are urgent and need to be grounded. For developing countries, this will work only if the fund is accessible, flexible, and fast to deliver to the affected communities, unlike other funding facilities such as the Green Climate Fund and Global Environment Facility. It is essential to determine how much funding is reaching the affected communities and, with this, how fast they can address the loss and damage issues in their lives and livelihoods.

Climate-vulnerable countries can take a proactive role in feeding the Transitional Committee with their actions on the ground so that the committee can go ahead with the right information and inputs. For example, Bangladesh has earmarked its fund from the Climate Change Trust Fund, which can put real-life learning to use. Helvetas Bangladesh, Young Power in Social Action, and the International Centre for Climate Change and Development (ICCCAD) are partnering with the Scottish government and Climate Justice Resilience Fund, which can help put actions forward in both economic and non-economic sectors of loss and damage.

Ashish Barua is programme manager for the Climate Change and Sustainable Development programme of Helvetas Swiss Intercooperation in Bangladesh.