Legal Response International (LRI) has prepared an important piece of legal advice that makes crystal clear the COP 29 decision on the New Collective Quantified Goal on Climate Finance (NCQG) includes a tripling of annual outflows for Fund for Responding to Loss and Damage (FRLD) and support to implement Loss and Damage contributions in Nationally Determined Contributions (NDCs).

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What questions does the advice address? 

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Not long after the gavel fell on at COP 29 we, alongside others, asked LRI to provide legal advice on two key questions: 

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1. Can paragraph 5 of the NCQG Decision be interpreted as meaning that “Loss and Damage” contributions in NDCs will be supported? For example, Vanuatu has costed their Loss and Damage contributions in their NDC.

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2. The FRLD is an operating entity of the Financial Mechanism of the UNFCCC. What implications does paragraph 16 of the NCQG decision have for the provision of public resources to the FRLD? Paragraph 16 also decides to at least triple annual outflows from those Funds listed from 2022. The FRLD did not receive pledges until 2023. What implication does this have for the FRLD?

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On the first question, key points from LRI’s legal advice include: 

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The NCQG can be put towards funding for Loss and Damage contributions in NDCs. Although there is no express reference to Loss and Damage in paragraph 5 of the Decision to include it, the same paragraph clearly states that the NCQG will… “reflect the evolving needs and priorities of developing country Parties”. It can be assumed that by establishing the FRLD in 2022 Parties recognised that responding to Loss and Damage was an evolving need for particularly vulnerable developing country Parties. Therefore, Vanuatu could seek funding from the NCQG to support their Loss and Damage NDC commitments. It is also worth noting that almost half of the countries on the last NDC cycle had Loss and Damage components in their NDCs, a percentage that is likely to increase in the new NDC cycle.

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On the second question, key points from LRI’s legal advice include:

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Paragraph 16 expressly mentions “the operating entities of the Financial Mechanism” among the entities to which public resources should be provided. The FRLD is one of such operating entities and therefore would benefit from the tripling goal. If Parties (countries) were aiming to exclude any of the entities of the financial mechanism they would have chosen wording such as “some operating entities” or “an operating entity.” The reference to year 2022 is only a baseline to determine the tripling of contribution to all funds named (collectively, and not individually signaled funds). 

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The cross-referencing in paragraph 16 to the goal in paragraph 8 does not imply an exclusion of Loss and Damage or the FRLD. Paragraph 8 states that the “at least USD 300 billion per year” is “for developing country Parties for climate action”. LRI believes that the use of the terms “climate action” is intentional as including other thematic areas beyond mitigation and adaptation. 

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Why is this new advice important? 

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On Monday the 2025 Bonn Climate Conference starts in Germany and on Monday the 16th of June from 14:00⁠–⁠17:00 CEST (Parties) and Thursday the 19th of June from 10:00⁠–⁠12:00 CEST (Non-Party Stakeholders) we will see  consultations by the Presidencies (Azerbaijan and Brazil) of the sixth and seventh meeting of Conference of the Parties serving as the meeting of the Parties to the Paris Agreement (CMA) on the work plan for the Baku to Belém Roadmap to 1.3T (Roadmap) —a process which was launched as part of  the NCQG decision.

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The consultations will be an important opportunity for Parties and non-Party stakeholders (e.g. civil society) to stress the need for the Roadmap to  put in place a clear plan for developed countries to provide Loss and Damage finance as grants from public sources at a scale of hundreds of billions a year. Our calculations suggest that the Loss and Damage needs of developing countries are at least 724.43 billion USD per year and that the FRLD needs to disburse at least 400 billion USD a year. Scientists also tell us the quantified midpoint average for the expected Loss and Damage funding needs of developing countries in 2025 is a staggering 395 [128–937] billion USD.

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Legal Response International (LRI) provides a range of services aimed at creating a more level playing field in the negotiations on the United Nations Framework Convention on Climate Change (UNFCCC). You can find out more about these services and how to access them here.

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