Organisers: MCII, ICSC, FFC, SLYCAN Trust, CPDC

Moderator:

• Sönke Kreft, Executive Director, Munich Climate Insurance Initiative

Panellists: 

• Kairos Dela Cruz, Executive Director, Institute for Climate and Sustainable Cities
• Hamza Haroon, Country Director, Pakistan, Financial Futures Center
• Kavindu Ediriweera, Director of Youth Programmes, SLYCAN Trust
• Geneva Oliverie, Development Specialist, Caribbean Policy Development Center

Video of the event is available on the World Bank’s website.

Moderator: Last year was the most expensive year in terms of climate disasters. An organized global response is needed for Loss and Damage. At the UNFCCC last year, a Loss and Damage Fund was created, aimed at a paradigm change at various levels. This will require civil society engagement at different bodies and levels. Why is it a paradigm shift? Firstly, it initiates the Loss and Damage Fund, hosted at the World Bank as a financial intermediary fund, raising questions about concrete steps needed to benefit countries. Secondly, it acknowledges that climate impacts necessitate a change of various actors, leading to a loss and damage fund arrangement in UNFCCC, with the Board of Loss and Damage playing a central role. Thirdly, it calls for collaboration from local and international levels, requiring significant scoping and change across countries. In terms of the process of Loss and Damage, this year focuses on further operationalising the Fund, with the Board meeting at the end of April in the UAE. The relationship with the World Bank is established with 11 criteria, and the Bank must respond whether these criteria can be fulfilled. What do they mean, and are they helpful in pushing for broader financial architecture change? At COP29, it will be decided whether the Bank can fulfil these criteria. All actors need to come together to ensure the success of Loss and Damage.

Geneva: From a Caribbean perspective, we are already lagging behind, and any storms or hurricanes will set us back even further. In Trinidad, intense rainfall is affecting agriculture, tourism, and much more. We have a vested interest in the Fund, highlighting the critical need to ensure that civil society is at the table. Whatever emerges from the Board must represent everyone who will benefit from it. Civil societies play an essential role in this entire process. We need this Fund to materialize as soon as possible. Delaying another year would push back the benefits that could arise from this Fund.

Kairos: In terms of what CSOs can contribute and do for the Loss and Damage Fund:

1)Advocate for space within Loss and Damage initiatives, national climate funds, other Multilateral Development Banks (MDBs), and the World Bank. Access windows would benefit from a strong observer network.

2) Allocate resources effectively: The monetary pledges made are more than just numbers; they need to have a real impact. The world has already failed developing countries in limiting loss and damage, so it’s crucial to ensure that funds are used efficiently and effectively.

3)Enhance readiness: Despite how climate impacts are disproportionately affecting the most vulnerable, there needs to be more emphasis on exploring how support can be extended to developing countries.

Hamza: Context: According to the V20 communiqué, countries have suffered over half a trillion dollars in Loss and Damage over the past 20 years. These nations are spending more on debt services than on essential services like education and health. Despite facing fiscal constraints, they continue to experience catastrophic events. For instance, in Pakistan in 2022, 30 million people were impacted, with 8 million displaced and one-third of the country submerged under water. This is the harsh reality.

Recommendations: Bureaucracy must be tamed to ensure speed and simplicity in the Loss and Damage fund. Countries cannot afford to wait 8 to 26 months for aid to arrive. The operational costs of these funds should be minimised to ensure that the majority of aid reaches the affected countries. Conditionalities attached to these funds need to be reduced. There is a need for trigger financing or anticipatory financing, rather than only reacting to disasters. Additionally, finding a way to scale up this fund is imperative.

Kavindu: Identifying gaps and needs to address loss and damage in Sri Lanka involves reacting to climate impacts and investing in resilient infrastructure. Through funding mechanisms, legal considerations, data, financial proposals, transparency, accountability, and climate justice must all be considered. We need to address all these processes, alongside wider financial architecture reforms, including debt restructuring, to effectively tackle loss and damage in Sri Lanka.

Questions and answers: 

1st round of questions: At the national level, processes and arrangements to  vulnerable populations in addressing loss and damage require a comprehensive approach. What can we learn from existing national-level processes and arrangements to support vulnerable populations in addressing loss and damage, and where is more imagination needed?

Representative from the Heinrich-Böll Foundation: How will country ownership be operationalised in addressing L and D? In the Green Climate Fund (GCF), there is typically a national authority representative, or in cases requiring quick action, a competent entity within the country is designated. Does it make sense to consider leveraging existing focal points for the GCF to streamline this process? Have discussions regarding this matter taken place at the national level?

CSO from Central Asian countries: We need to simplify the processes involved in accessing the Fund and reduce the lengthy timelines from 18 to 24 months to shorter durations, which is equally important. How can we make this possible? For those involved in implementing these processes on the ground, we also need to demonstrate well-managed, transparent, and efficient practices. Therefore, to simplify access, we need to establish institutions that will ensure transparency throughout the process. What kind of mechanisms could we create to accompany decision-making processes and also shorten the lengthy procedures?

Moderator: We want to delve deeper into national-level processes. Additionally, I would highlight that the governing instrument of the L&D enables direct access to front-line communities, with funds going directly to CSOs on the ground. Are there national processes that could collaborate effectively with sub-national levels? How can accountability to national stakeholders be maintained? We also need to examine the question of policy coherence.

Geneva: We need to ‘tame the bureaucracy’ at all levels to expedite the disbursement of funds. In many countries, ministries operate in isolation, which is a significant obstacle that needs to be addressed. Regarding the governance of fund distribution, one solution could involve utilizing Central Banks to establish a fund where governments can access USD liquidity, not only for emergency situations but also for non-emergency needs. Country-ownership is paramount, and having a national directive is essential, although the Green Climate Fund (GCF) has its own challenges that need improvement. While we could adopt aspects of the GCF’s framework, it must be enhanced to ensure maximum efficiency. Transparency is crucial, especially in the Caribbean, where issues with fund utilization exist. Holding entities accountable for fund usage is vital. Furthermore, funds should be provided in the form of grants rather than debt, as many countries are burdened by debt. Exploring creative methods to generate funding is also imperative.

Kairos: In 2012, the Philippine government passed the People Survival Fund, demonstrating how a direct access fund can effectively operate for a vulnerable country like the Philippines. However, challenges persist in enabling local communities and governments to access these funds. The People Survival Fund has often been used as a buzzword, raising concerns that the same may occur with L and D funds. In the Philippines, climate catastrophes are severe, yet there’s insufficient pressure on governments to ensure accountability.

We should leverage existing in-country processes, such as the People Survival Fund in the Philippines, and prioritise institutionalisation. Beyond individual projects, we must focus on sustaining our gains. Finance and insurance are somewhat more institutionalised in the Philippines, largely due to the efforts of CSOs. However, significant work remains in terms of readiness, including addressing misunderstandings about climate risks and ensuring understanding of the scientific basis behind risk distribution.

Non-economic losses also require attention, challenging us to broaden our understanding of climate risks and impacts. While there has been a fixation on damages to agriculture and metropolitan areas, we need to expand our horizon to encompass a wider range of climate risks and impacts.

Hamza: We need transparency and accountability. How do vulnerable countries begin working now? Country-wide platforms are attempting to facilitate economy-wide planning, such as the Climate Prosperity Plan (CPP). What steps are needed to achieve resilience in Bangladesh, also involving private sector engagement? This is to establish clear pathways to move us in that direction. The vicious cycle of debt is evolving into a climate-debt trap: the hope is that the L&D fund will alleviate some of these burdens.

Kavindu: We need to consider effective connections between global and local levels, local-level planning, and mechanisms for stakeholder engagement. Transparency is crucial in these deliberations. Integrating into national processes, such as NEPs and NDCs, is already underway in Sri Lanka. However, there is still much to be accomplished. Additionally, there are numerous non-economic losses that require attention. A comprehensive study is needed to identify these challenges, followed by evidence-based research to determine the necessary actions. Only then can we grasp the big picture and anticipate innovative approaches.

2nd round of questions: Now, let’s focus on the international level. What are your priorities for decision-making in 2024, and what are the necessary next steps?

CSO from the Philippines and Rosa Luxembourg foundation: This can’t be trickle-down but needs to be at scale – and how can we ensure that developed countries contribute funds? We’re not here to propose innovative approaches, but we need accountability.

Representative from the World Economic Forum: To what extent do you see the private sector getting involved with the Fund, and more largely the L&D issue? If profit maximisation is taken into account, it doesn’t quite fit into the L&D question. By what mechanism do you see private sector contributions being compelled or mobilised?

CSO: How do you perceive the relationship between climate and health? Additionally, where do you think evidence should come from? There needs to be evidence gathered from local communities, not just from the Global North.

Geneva: Developed countries are pushing back, arguing that emerging economies like China should also contribute to the Fund. There should be a move towards ensuring a minimum contribution. Bureaucracy is often criticized for its numerous layers, so vertical arrangements could help streamline processes and reduce costs. The role of the private sector is significant, as seen in initiatives like the Bridgetown Initiative, which includes a component focusing on private sector involvement. Climate Prosperity Plans (CPPs) could aid in this regard, with each country specifying the assistance required. If we aim to attract private financing, it’s essential to define our needs clearly.

Regarding mental health issues, the Central Bank could establish an L&D account within its framework, ensuring funds are quickly disbursed to communities in need. Streamlining the process into a single step for efficiency is crucial.

Kairos: We need to continue holding developed countries accountable. In mechanisms like the GCF, and the World Bank CAT DDOs, accountability at the ground level often ceases once funds transfer from the Bank to national governments. Stand-by loans are considered adaptation finance because they could be used for adaptation. However, having financing available but not reaching its intended destination is not the best approach. The GCF provides valuable insights and experiences to learn from and build upon.

Hamza: Redefining the processes to simplify, expedite, and ensure accessibility and manageability is crucial. The scale of L&D funding, currently at 651 million for the entire world, is nothing in comparison to the trillions needed. Initiatives like the Global Shield platform, focusing on anticipatory financing, aim to address gaps in vulnerable countries and enable effective damage control. Organisations within countries play a vital role in this regard. Establishing linkages between these organisations and the L&D fund is essential.

Kavindu: Local evidence that can feed into macro-level processes is crucial. There is much to consider in terms of climate justice, accountability, and legal considerations. Multi-stakeholder engagement is essential in identifying these areas, leading to a better approach to accessing funds.