As Abraham Lincoln once said “You cannot escape the responsibility of tomorrow by evading it today”. Big, rich countries are currently evading the responsibility of tomorrow. The Loss and Damage Fund prevents the evasion of responsibility from bigger countries, preventing them from trashing our planet. The Loss and damage Fund is a fund that was setup at COP27 as a climate “compensation” program. It creates a meeting with 24 representatives from 24 different countries. At the meeting, the representatives decide which countries will receive money and which countries will pay the money. The countries are decided by who has the biggest impact on climate change and who gets harmed by climate change the most. Some people say that the Fund will not benefit the environment, while others believe it will benefit the environment. The new Loss and Damage Fund passed during COP27, illustrates a sign of promise, but countries must do more.

Some argue the Loss and Damage Fund is useless

During the week of December 12th, 2022, Teodoro Obiang Nguema Mbasogo was reelected as president of Equatorial Guinea. Why is that important? Equatorial Guinea is the 3rd richest country in Africa, with a Gross Domestic Product (GDP) of $8,000 per capita (per person), most of that money coming from oil production. In addition, Equatorial Guinea is one of the most corrupt countries in the world (Country Perception Index). Speaking of corruption, that same week, a huge mining corporation called Glencore had to pay the Democratic Republic of the Congo $180 million dollars because of corruption. Glencore admitted to paying third parties, some of which were bribes. This was also not the first time that had happened. Glencore has had eight countries accuse them of corruption and money laundering, six of them being in Africa. None of them rank as a “free” country (a country where the government does not control what their citizens are doing or saying) on the Freedom House global freedom status map, and only one of the six Glencore countries ranks in the top half of the Country Perception Index.

As you can see, there is a lot of mismanagement of money going on within African countries, most of which are dealing with climate issues. Many government officials have developed a habit of taking bribes from other places and using it for their own gain. If given money, they could use the money for a wrong cause, such as not using the money received appropriately. 6 of 8 Glencore countries are in Africa, but also 6 of 20 V20 countries are in Africa. V20 is a group of the 20 countries most vulnerable to climate change. Why is V20 so important? Because it is a likely group of countries that will benefit from the Loss and Damage Fund. Only one (Ghana) of the six African V20 countries is considered a free country, and 2 (Rwanda & Ghana) of the 6 African V20 countries are in the top half of the Country Perception Index. That is very concerning, posing the threat of corruption, or fraud (Lazar, Financial Post, 2022).

You can see a correlation between Glencore African corruption countries, and V20 African countries. Most of them are not free and officials in these countries misuse money received for personal gain, which is called embezzlement.What is the point of giving these government officials money? The COP27 Fund would only give developing countries $200 million in US dollars a year. That is 1/5000 of the agreed upon numbers in the famous Paris climate agreement of $100 billion USD a year, which was set a little over six years ago. The countries did not even meet those standards, falling short of the $100 billion a year goal. Some estimates suggest the Loss and Damage Fund should be $400 billion USD, and “Nicholas Stern, a well respected climate economist, has estimated the developing world might need as much as US$2.4 trillion per year from 2030 onwards (Lazar, 2022).”

Most African countries would be receiving the money from the Loss and Damage Fund, where “Of Africa’s 54 countries, 21 have GDP per capita less than US$1,000, 41 rank in the bottom half of the corruption perception index and 24 are ‘Not Free’ (Lazar, 2022).” The agreed upon number that came out of COP27 is so low that it will barely make an impact. This number is going to get higher and higher, and if the bigger greenhouse gas emitting countries do not reduce that, then it will get out of control. Additionally, most of the countries benefiting from the Loss and Damage Fund are poor, and their governments are corrupt and embezzle the money for themselves, so the US and other big countries are thinking, “It is useless to give money to poor countries when there is a possibility for the country to use my money irresponsibly.” There are many reasons why the Loss and Damage Fund is unbeneficial, to the environment and to the people spending time and effort to create this Fund.

Others argue the Loss and Damage Fund is beneficial to our planet

While some argue that the Loss and Damage Fund is hardly going to have an effect, others recognize that the Fund has many positive qualities. It provides resources to developing countries to properly develop like the US and other countries have, helps people in those poor countries, and creates a sense of responsibility . Over the summer, Pakistan had one of the worst floods ever. It caused ⅓ of Pakistan to be submerged in water, 1500+ deaths, and caused over $30 billion in damage. It turns out, Pakistan emits about 1 ton of CO2 per capita, which is far less than big countries such as the US, where the CO2 per capita is 15 tons per capita. So why are small, developing countries being impacted? the ones suffering? The US has extremely high CO2 and greenhouse gas emissions, as well as “Global carbon dioxide emissions from fossil fuels and cement [that] have increased by 1.0% in 2022, new estimates suggest, hitting a new record high of 36.6bn tonnes of CO2” (Hausfather et al, Carbon Brief. 2022). The world is supposed to be trying to solve climate change, but why are CO2 emissions going up every single year? The Loss and Damage Fund creates responsibility for bigger countries, making them pay money to other countries if they are acting irresponsibly. According to The Commonwealth, “Since Vanuatu and the Association of Small Island States (AOSIS) first called for an international insurance pool for sea level rise in 1991, Loss and Damage issues gained momentum within the UNFCCC dialogue and subsequent COPs” (Kattumuri et al. 2022) not only, but 2022 had some of the worst climate disasters. Whether it was the Pakistan flood that was mentioned earlier, droughts in Africa which led to famines, Hurricane Ian, or extreme heat waves in Europe, they were all devastating.“Since 1991, an average of 189 million people in developing countries have been affected by extreme weather events each year, and 29 climate disasters were recorded in 2022, with Loss and Damage estimated at over USD 1 billion” (Kattumuri et al. 2022). To reiterate the statistic, an average of 189 million people in developing countries have been affected by extreme weather events each year since 1991. That 189 million people combined would make the world’s 8th biggest country. Think about that. Implementing the Loss and Damage Fund would make bigger countries take responsibility for their actions, and support developing countries and the citizens of those countries.

As we can see, the Loss and Damage Fund has both pros and cons, but ultimately, we need to put our planet first. Meena Raman, head of programs at Third World Network, describes “‘The loss and damage Fund as “a response to climate injustice and climate debt, owed by the rich countries to the poor.’” Additionally, Teresa Anderson,the global lead on Climate Justice for ActionAid International, explains “‘A fund to help governments rebuild homes, hospitals and roads, avoid new debt burdens, and provide social protection to help communities bridge crises will be vital to help people avoid the poverty spiral after climate disasters’” (Wyns, The Lancet, 2022). This fund will give bigger countries a sense of urgency and responsibility.

The Loss and Damage Fund puts pressure on wealthy countries to contribute money to smaller, developing countries. Corruption and misuse of funds can be an issue, but the United Nations has shown signs of slowing these types of countries from mismanagement of money. Venezuela (177/180 on Transparency International ranking for corruption) lost its power to vote in the UN general assembly because of corruption. If a country tries to be corrupt with the money received from the Loss and Damage Fund, the UN can impose similar restrictions if those countries try to commit fraud or corruption.

What experts believe is right

All in all, the pros outweigh the cons, and the Loss and Damage Fund, if tweaked slightly to include more money (which can be done by the 24 representatives from those 24 different countries), will be extremely beneficial to various different countries and people. Such as, the people of our world (more specifically the ones in developing countries), the environment of our planet (help bringing down CO2 emissions in developing countries that heavily rely on fossil fuels), responsibility (big, rich countries have a history of not taking responsibility, the Loss and Damage Fund creates a cushion in a good way for countries to pay the money that they rightfully owe to developing countries), and the environment of the developing countries (creating climate resistant infrastructure such as cleaner water etc).

Now, you may be thinking “Oh, you said the Loss and Damage Fund needs to be tweaked slightly so, therefore it must be bad”. It is quite the contrary. To reiterate Lazar’s point,

The initial target for this ‘loss and damage’ fund is US$200 million…At the COP21 meeting in Paris, an agreement supposedly was reached whereby rich nations committed to providing up to US$100 billion per year to help poor countries reduce their carbon footprints and adapt to climate change…And the annual contributions were expected to be scaled up over time. Some studies project the cost of adaptation alone will be closer to US$400 billion a year.

This point is totally valid. The Loss and Damage Fund is only allocating $200 million a year to developing countries. There are so many countries that are considered “developing”, and $200 million is not going to cut it. That does not mean it cannot be fixed though. At the meeting with 24 different countries, they can decide to raise this number and allow developing countries to develop like they did, reaching a point where they can fend for themselves. Having the option to raise the number is yet another thing that makes the Loss and Damage Fund so unique; we must take advantage of it before it is too late.

The Fund creates opportunities for developing countries to properly develop, not develop with climate change from bigger countries affecting them. The fund shows promise for the future, but the UN as well as bigger countries must do more. This is a sign of promise. In a time where there is so much public outcry to do things that are right, such as Black Lives Matter, but lawmakers hardly listen, this is showing the light at the end of the tunnel. When you hear about this headline, you might not think much about it, but it is showing how we as a society can actually get things done. Many of us are complaining about various different issues, how the US is getting nothing done for Republican or Democratic issues. That is all due to political polarization. Political polarization is the opposite of what happened during COP27, with no unity and complete selfishness. This fund is a sign. A sign of change. Changing our environment, our planet, and our attitude.

Work Cited

Beltaji, Dana, Peter Prengaman. “How will the new UN climate deal on a ‘loss and damage’ fund work?” Public Broadcasting Service, 20 Nov. 2022, pbs.org/newshour/world/how-will-the-new-un-climate-deal-on-a-loss-and-damage-fund-work

Hausfather, Zeke, Pierre Friedlingstein. “Analysis: Global CO2 emissions from fossil fuels hit record high in 2022”, Carbon Brief, 11 Nov. 2022, carbonbrief.org/analysis-global-co2-emissions-from-fossil-fuels-hit-record-high-in-2022

Kattumuri, Ruth, Unnikrishnan Nair, Labanya Jena, Alexander Lee-Emery. “Blog: Loss and Damage Fund — Size, design and agility are essential.” The Commonwealth, 5 Dec. 2022, thecommonwealth.org/news/blog-loss-and-damage-fund-size-design-and-agility-are-essential

Lazar, Fred. “Opinion: A climate loss-and-damage fund? What could possibly go wrong?” Financial Post, 14 Dec. 2022, financialpost.com/opinion/opinion-a-climate-loss-and-damage-fund-what-could-possibly-go-wrong

Plumer, Brad, Lisa Friedman, Max Bearak, Jenny Gross. “In a First, Rich Countries Agree to Pay for Climate Damages in Poor Nations.” The New York Times, 19 Nov. 2022, nytimes.com/2022/11/19/climate/un-climate-damage-cop27.html

Wyns, Arthur. “COP27 establishes loss and damage fund to respond to human cost of climate change.” The Lancet, 8 Dec. 2022, thelancet.com/journals/lanplh/article/PIIS2542-5196(22)00331-X/fulltext#articleInformation