In the aftermath of devastating landslides in Wayanad, Kerala, discussions have emerged about whether subnational entities can seek compensation through the UNFCCC’s Loss and Damage Fund (LDF).
While the demand for climate compensation is justifiable, accessing funds from international mechanisms like the LDF is complex.
What is the Loss and Damage Fund (LDF)?
The LDF was set up at the 2022 UNFCCC Conference (COP27) in Egypt
To financially support regions experiencing losses from climate change, including both economic and non-economic impacts.
It covers extreme weather events and slow-onset processes, such as rising sea levels.
A Governing Board oversees the fund’s operations, with the World Bank serving as the interim trustee.
Current Challenges:
The Board is developing mechanisms for resource access, including direct access, small grants, and rapid disbursement options.
Climate funds, including the LDF, are often slow to be disbursed, especially for local communities, which poses significant challenges.
India's Role and Approach to Climate Finance
Between 2019 and 2023, India experienced over $56 billion in damages from weather-related disasters.
India's National Climate Action Policy has focused more on mitigation activities than adaptation or loss and damage, leading to limited participation in related dialogues at COP meetings.
India lacks a clear framework to streamline climate finance for adaptation and loss and damage, particularly at the community level.
The introduction of a climate finance taxonomy in the Union Budget 2024 has raised hopes for increased international climate finance, but without specific guidelines, accessing these funds remains challenging.
India should advocate for decentralised methods of fund disbursement from the LDF to ensure that vulnerable communities benefit directly.
At the ground level, state governments often bear the financial burden of disaster recovery, as seen in Kerala.
After the 2018 floods, the Kerala government launched the Rebuild Kerala Development Programme, which was funded by international loans from the World Bank and KfW Development Bank.
This highlights the importance of international climate finance in recovery efforts.
Challenges in Damage Assessment:
There is no standardised method for assessing disaster-related damages, particularly from slow-onset events.
This lack of assessment processes could prevent India from accessing the LDF, as significant loss and damage might go unreported.
Way Forward:
Strengthening India's Climate Finance Framework
India needs a more explicit policy framework focusing on locally led adaptation and clearer guidelines for accessing loss and damage funds.
By improving these frameworks, India can better manage and access climate finance, ultimately protecting its communities from the growing impacts of climate change.
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