ASSESSING INNOVATIVE SOURCES FOR LOSS AND DAMAGE MECHANISM: THE ROLE AND PROSPECTIVE REGULATION OF CLIMATE FRIENDLY FOREIGN INVESTMENT

On the first day of the UN Framework Convention on Climate Change’s (UNFCCC) 28th Conference of the Parties (COP28), the participating States decided to operationalize the Loss and Damage Fund to support vulnerable countries, especially Small Island Developing States (SIDS), dealing with the effects of climate change, such as sea level rise. The decision comes after a long path to the establishment of the loss and damage mechanism within the UNFCCC. Many discussions have been carried on regarding, among other things, the potential sources of funding, including innovative sources. In this regard, the contribution of foreign investments has been part of the conversation. However, the current international legal framework for foreign investments is not well equipped in this respect. The discussion on the loss and damage mechanism has also addressed other interlinked issues, like gender and human rights. This chapter will offer the first overview of this topic, with the aim to answer the question of whether the current international legal (investment) framework is well equipped for promoting and regulating climate-friendly foreign investment (FDI) for the loss and damage mechanism, which would also reinforce human rights protection in the field.