On the opening day of COP28 in Dubai, the United Arab Emirates COP Presidency orchestrated quite the coup in delivering a Loss and Damage Fund.
Thirty years in overall gestation, the last twelve months were a whirlwind. It was agreed there would be a Loss and Damage Fund in November 2022, the details were negotiated by a Transitional Committee throughout 2023, and the Fund was delivered in record time on 30 November 2023. Countries immediately pledged more than $700 million USD to Loss and Damage, the majority to the Fund. This could be characterised as something of a UNFCCC miracle.
At the risk of taking some of the shine off that miracle, let’s examine the details.
First of all, it is really clear that developing countries need at least $400 billion USD a year to address loss and damage.1 In 2022 the quantifiable economic cost in developing countries of extreme events like cyclones and floods was greater than $100 billion.2 That number does not include more difficult to quantify extreme events like heat waves, nor slow onset events like rising sea levels or non economic loss and damage like loss of education during a climate disaster or loss of culture. Developing countries identified that they expect the Fund to be able to program $100 billion USD a year.3
$700 million USD starts to look a little paltry. Even if it was all allocated in a year and new pledges received next year, it would count for less than 1% of developing country expectations of $100 billion USD and only 0.2% of actual needs of $400 billion USD.
Perhaps where we are going amiss is comparing these pledges to the wrong thing. Let’s try something more relatable.
Cristiano Ronaldo, Lionel Messi, Neymar Jr, Kylian Mbappe, Karim Benzema and Erling Haaland together make as much as the pledges to the Loss and Damage Fund in a year. The top 10 football players in the world will be making $961 million USD altogether in 2023.
Whilst $700 million USD is definitely more than Bey and Jay paid for their new house at $200 million. It is roughly equivalent to Forbes valuation of Trump’s golf clubs and resorts at $870 million. But significantly less than the $7 billion it cost to build Dubai Expo City. On the subject of “real” estate, there are three luxury super yachts which are each worth more than the combined total of Loss and Damage pledges.
Elon Musk has lost 32 times more money in one year of running X/Twitter – $25 billion USD – than has been pledged to the Loss and Damage Fund. Let’s definitely not put him in charge of the Fund! On the other hand, the Loss and Damage pledges would pay for five King Charles’ based on his annual stipend (£126 million a year).
Loss and Damage pledges would buy you roughly 15 seats to orbit the planet. You haven’t been yet? But dahling you should, zero gravity is divine this time of year.
Perhaps more pertinently, the combined profits of the world’s biggest oil companies – ExxonMobil, BP, Shell, TotalEnergies and Chevron – amounted to around $200 billion USD in 2022. The windfall profits of the fossil fuel companies causing the climate crisis would cover the needs of the Loss and Damage Fund many times over.
In fact, simply redirecting the subsidies paid to these already mega profitable companies would pay for the Loss and Damage Fund. G20 member states (the 19 of them that are individual states) gave $446 billion USD to fossil fuel producers last year, despite their record profits, which was actually an increase from the previous year. Such generosity to already rich fossil fuel barons really puts $700 million USD – a mere 0.2% of those G20 fossil fuel subsidies – in perspective.
A more specific comparison: Australia’s pledge to the Pacific Resilience Facility (which will go towards both loss and damage and adaptation) of $100 million AUD ($85.6 million USD) pales into insignificance at less than 1% of the $57 billion AUD ($37.5 billion USD) subsidies that national and regional Australian governments will provide fossil fuel producers and big users over the next four years.
The money is there - we just need to stop using it to cause climate change and instead spent it on climate action including the Loss and Damage Fund. As Mia Mottley said on the second day of COP28, “When you take $200bn from oil and gas, $70bn from international shipping, another $40-50bn from international air travellers and a financial transaction tax, we have a dedicated source of funds, not just for loss and damage but to build resilience.”
For all these reasons, the Loss and Damage job at this COP is #notdoneyet. We really need the overall “package” of outcomes from the COP to ensure that Loss and Damage is enshrined alongside mitigation and adaptation, as the three pillars of the Paris Agreement, and we need to make sure it is clear that the scale of loss and damage is currently enormous and is falling on the shoulders of the people and communities on the frontline of the climate crisis, who can least afford it. When it is the rich and polluting countries who should be paying the cost.
See the Loss and Damage Collaboration’s live pledge tracker here.
1 See our discussion paper, The Loss and Damage Finance Landscape, Richards, J, Schalatek, L, Achampong, L, White, H. 16 May 2023
2 See our discussion paper, The Loss and Damage Finance Landscape, Richards, J, Schalatek, L, Achampong, L, White, H. 16 May 2023
3 Proposal from Developing Countries on the Launch of the Loss and Damage Fund and Funding Arrangements.
Julie-Anne Richards is the Loss and Damage Collaboration’s Strategy Lead. She has two decades of experience working on the climate crisis, has written extensively on loss and damage, and campaigned with civil society and in collaboration with vulnerable countries on the need for loss and damage finance.
Tariq Jowahir is a journalist by training and a designer by passion. He is a language-loving, info-hunting, design all-rounder who is all about transforming ideas into impactful, visually-compelling stories. Tariq has considerable experience in communication and design for the development sector.
This article has been Funded by the Rosa-Luxemburg-Stiftung New York Office with support from the German Ministry for Economic Cooperation and Development (BMZ). The publishers are solely responsible for the content of this publication; the opinions presented here do not reflect the position of the BMZ. We also note that views and any errors, are the authors alone and that the content of this brief does not necessarily represent the views of all the members of the Loss and Damage Collaboration (L&DC).