When the Fund for Responding to Loss and Damage (FRLD) was formally announced at COP28, with about $700 million pledged, there was hope that a tangible lifeline had finally emerged for vulnerable countries. As we waited for COP29 and the fourth meeting of the Board of FRLD to bring action, the outcome was nothing short of dismal for Least Developed Countries (LDCs), Small Island Developing States (SIDS), and other vulnerable developing nations.
Over $700 million sitting idle while people suffer
In 2024, devastating climate-related disasters made the urgency for this support distressingly clear. West and Central Africa faced catastrophic floods, affecting nearly 2.1 million people and resulting in 513 deaths. Southern Africa experienced prolonged droughts, with millions of people facing food insecurity, driven by a harsh El Niño – Zambia, Malawi, and Zimbabwe declared national disaster due to falling crop harvests, water shortages and an ongoing cholera outbreak. In South Asia, record-breaking heatwaves pushed temperatures in New Delhi went beyond 50°C, escalating mortality and creating widespread health crises with over 700 deaths and 40,000 heatstroke cases in India alone. Brazil endured its worst floods in history, displacing 580,000 people and impacting over 2 million people.
The heartbreaking truth is that over $700 million was sitting in FRLD, pledged to help people like those who faced these disasters. And yet, not a dollar of it has been used. People lost lives, homes, livelihoods waiting for action that never came.
Where is the perfect model? It doesn’t exist
Why hasn’t the money been deployed? The FRLD Board appears to be sitting on the funds, focused on finding the perfect delivery model. But here is the reality: there is no one-size-fits-all perfect model. What we need is to test multiple good models that work under different circumstances, different country contexts, and that evolve over time as situations shift with rising global temperatures. We need rapid transparent experimentation giving funds directly to communities, allowing them to decide how best to protect themselves. We must bypass lengthy processes and avoid international intermediary organisations like the United Nations and international NGOs that delay the support from reaching those in need.
No significant new pledges
This year, contributions to the Fund for Responding to Loss and Damage (FRLD) have been disappointingly limited. Sweden’s pledge of approximately $19 million and Australia’s $50 million are among the few additions to a fund that stood at around $700 million last year. These minimal contributions are a stark reminder of the lack of urgency from developed nations, especially when the need for responding to loss and damage is estimated at a staggering $1.3 trillion. In comparison, the current funding levels appear utterly dismal, falling woefully short of what is required to support vulnerable communities grappling with the devastating impacts of climate change.
Optical illusion of progress
There has been some movement in setting up the FRLD structure. We now have a FRLD Board and an Executive Director. But beyond that, none of the pressing issues have been addressed. There is no clarity on how funds will be transferred, the delivery modalities, or the criteria for prioritising countries. The optics may suggest progress, but the reality remains an illusion.
No target for Loss and Damage in NCQG discussions
The New Collective Quantified Goal (NCQG) discussions have not set a separate target for Loss and Damage. This means that there will be uncertainty around whether, and to what extent, the FRLD will be capitalised in future years.
Current models are ‘not fit for purpose’
The existing models for financing Loss and Damage that are currently being discussed are not fit for purpose:
- We need a balanced approach that supports communities exposed to disasters immediately, but also invest in long-term resilience. Vulnerable communities are left to experience the same disaster again and again- without investing in protection from future crisis. No community should face repeated devastation without the means to build back better, as seen in Germany’s response to their floods in 2021.
- Focusing only on high-intensity disasters risks neglecting high-frequency but low-intensity events, which cumulatively cause the same level of damage for communities.
- Slow onset events like sea level rise, salination, desertification need equal attention in support strategies, otherwise we risk undermining the biggest existential crisis faced by SIDS.
- Insurance has often been put forward as a magic solution. While it may work well in certain cases, it is worth noting that majority of the people in V20 countries do not have financial protection and have lost a total of US$525 billion to climate impacts since 2000. The systems that make insurance viable in LDCs and SIDS, such as early warning systems, proper risk modelling, and established triggers for payouts do not exist in most of the countries – they need to be put in place first. Moreover, insurance is primarily designed to cover high-intensity disasters, leaving slow onset disasters entirely unsupported.
Communities deserve better
The current approach is not working and without a radical shift in how the FRLD operates, we risk failing those who need it the most – again and again. Communities on the frontline of the climate crisis deserve better than bureaucracy and empty promises. They deserve meaningful action, and they need it now.
With more than 20 years of senior policy development, research and management experience in government, funding agencies and international NGOs, Ritu has worked extensively on social protection, climate resilience (policy, planning and finance), forest and watershed management, resource conservation (water and energy efficiency, renewables and circular economy), livelihood and gender issues. Read more about Ritu and follow her @ https://www.linkedin.com/in/ritu-bharadwaj-410130156/