The Fund for Responding to Loss and Damage Must Listen to Affected Communities

By Jocelyn Perry | July 9, 2024

As the second meeting of the UN Climate Change (UNFCCC) Board of the Fund for responding to loss and damage begins this week, Refugees International urges inclusion of affected communities in both decision-making processes and direct access to funds.

To support these goals, the Climate, Migration & Displacement Platform Steering Group and Refugees International hosted two virtual conversations with members of communities affected by loss and damage in the context of displacement and other forms of mobility to share their experiences, challenges, and best practices with members of the Board of the Fund for responding to loss and damage on June 26 and 27, 2024, under Chatham House rules. We organized these discussions in response to requests from Board members to hear from communities affected by displacement and other forms of mobility—as most members of these communities are unable to travel to an event such as a Board meeting due to financial and documentation challenges.

Displaced communities are often some of the most marginalized, whether living within their country of origin as internally displaced people or having crossed borders as refugees or through other pathways. Their access to political processes—including climate adaptation—as well as international financing mechanisms are exceedingly limited, though they are often more exposed and more vulnerable to climate hazards than other groups. For these reasons, many civil society organizations and members of affected communities are advocating to ensure their consultation in spaces of decision-making, such as the Board of the Fund, as well as their ability to directly access small grants from the Fund.

These conversations should open the door to future and ongoing consultations with affected communities that are more in-depth, allow for greater representation, and are organized by the Fund for responding to loss and damage.

Key Takeaways

Context matters. As regions and communities each experience the climate crisis and related loss and damage differently, the Fund must be both fit for purpose and flexible enough to offer a wide array of solutions to adequately tackle the crisis in each context. While specifics look different in each regional context that we heard from, across Latin America, Africa, Asia, and the Pacific, communities have already experienced and are continuing to face loss of lives, homes, and livelihoods; loss of biodiversity, cultural heritage, languages, and practices; loss of access to ancestral homelands and community cohesion; and are experiencing psychological trauma. In light of this, both economic and non-economic loss and damage must be considered and addressed. We also heard about the importance of livelihood support to avoid the burden of debt, and the need to proactively include and support women and youth.

To understand and engage with these local contexts, participation by civil society and affected communities at each step will be key to improving on the experiences of other funds and developing a mechanism that is consultative and meaningfully engages with the experiences and expertise of those facing loss and damage to whom the Fund is meant to be responsive.

On civil society inclusion and consultation, the Board should:

Ensure outreach and communication with communities through civil society and national governments, in local and accessible language, and support climate education to facilitate meaningful dialogue and engagement with its processes.
Conduct ongoing consultations with civil society in between Board meetings.
Allow interventions by civil society representatives throughout Board meetings to foster true dialogue and permit constituencies to table agenda items as well.
Support participation by members of groups, such as migrants and displaced people, who are not represented by traditional UNFCCC constituencies.
Fund travel support to Board meetings for civil society participants from affected communities.

Direct access to grants through the fund will be key for many local communities, particularly displaced communities, to receive support from the Loss and Damage Fund. Simplicity is key for communities to be able to access funds in practice, not just in theory. Affected communities stressed that the primary barriers to accessing funds are accessibility (of information, procedures, banking systems), organizational capacity, and time. Mechanisms must be simplified to respond to these challenges.

On direct access to small grants, the Board should:

Establish a small grants window within the Loss and Damage Fund that is directly accessible for communities, local CSOs, Indigenous people, and groups facing marginalization, such as refugees and other displaced communities.
Ensure that a substantial and progressively growing part of the Fund’s resources is allocated to the small grants window.
Ensure the small grants window has simplified procedures and systems to ensure easy access, transparency and accountability, based on community-led and human rights-based approaches.

Finally, funding must be available at the scale necessary to meet the needs of affected communities and operationalized urgently as communities have been facing loss and damage for years already. Grants should prioritize nature-based solutions and ecosystem restoration to maintain connections between traditional environmental practices and communities, respect Indigenous knowledge, support biodiversity and environmental health, and continue to build local resilience to climate change.

Background: What is the Fund for Responding to Loss and Damage?

Loss and damage is an evolving term within international climate negotiations and policymaking, largely meaning the negative impacts of climate change—those that cannot be mitigated by emissions reduction nor adapted to. After decades of advocacy by civil society and many of the countries most affected by climate change across the Global South, the Fund for responding to loss and damage was agreed to during COP27, negotiated by a transitional committee over the next year, and operationalized at COP28 in Dubai in 2023. The Fund is a World Bank hosted financial intermediary fund, through which the Bank serves as interim trustee and host of the Fund’s secretariat; the Board was appointed by respective Parties in early 2024 and first met in April and May.

The Fund’s stated mandate “includes a focus on addressing loss and damage to assist developing countries that are particularly vulnerable to the adverse effects of climate change in responding to economic and non-economic loss and damage associated with the adverse effects of climate change, including extreme weather events and slow onset events.” A key point for many community-based organizations from the COP28 decision that operationalized the Fund is that the World Bank must allow “all developing countries to directly access resources from the Fund, including through subnational, national and regional entities and through small grant funding for communities.” A more detailed discussion of many of the key issues that the Fund must address and their implications is available from the Heinrich Böll Foundation here.

What Will the Second Board Meeting Address?

Key issues during this Board meeting include selection of the Fund’s Executive Director and Board’s host country, additional rules of procedure and 2024 workplan of the Board, access modalities, small grant funding modalities, and triggers/thresholds for the Fund (more on financial instruments here), and participation of active observers in Board meetings and other proceedings. The full provisional agenda for the meeting is available here.

Civil society organizations have been urging the Fund to learn from and improve on other funds, in terms of both participation by civil society and access to small grants directly by communities. While they appear quite bureaucratic, the decisions that the Board makes with respect to the above issues will determine to what extent the Fund is able to achieve these goals.

The Heinrich Böll Foundation provides more details on these key issues, and La Ruta del Clima has developed a more detailed look at effective participation in Board meetings. Throughout the week, the Loss and Damage Collaboration network will provide daily updates of the discussions and analysis.

What Other Issues are Relevant to Loss and Damage?

While the modalities for Fund access are critical to communities’ ability to benefit from it, the larger issue remains ‘filling the Fund’—that is, ensuring that countries increase their pledges of support to it and that they ultimately deliver on these pledges. As of COP28, the total amount of pledges equaled just 0.2 percent of the climate-induced losses faced by developing countries each year.

The Santiago Network on Loss and Damage is another recently established entity within the Warsaw International Mechanism for Loss and Damage, intended to catalyze technical assistance to avert, minimize and address loss and damage as well. More broadly, appropriate funding and action for adaptation to minimize loss and damage will also be essential, through work on the Global Goal on Adaptation, sufficient funding, and technology and capacity-building support for countries in their national and local adaptation planning processes. Finally, one of the top issues on the agenda for COP29 this year is the New Collective Quantified Goal on Climate finance (NCQG). To continue to build to the necessary scale of climate finance for loss and damage, the NCQG must include loss and damage and prioritize grants and highly concessional loans.