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US Withdrawn from Loss and Damage Fund

Last updated on March 8th, 2025 Posted on March 8, 2025 by NEXT IAS Current Affairs Team  228

Syllabus: GS 3/Environment 

In News

  • The US has withdrawn from the board of the Loss and Damage Fund.
Trump Administration’s Climate Disengagement
– The decision reflects the Trump administration’s ongoing disengagement from international climate agreements, including pulling out of the Paris Agreement, halting US scientists’ participation in the IPCC, and cancelling funds for the Green Climate Fund.

Loss and Damage Fund (LDF)

  • It was established at the 2022 UNFCCC Conference (COP27) in Egypt to provide financial support to regions suffering both economic and non-economic losses caused by climate change. 
  • These include extreme weather events and slow-onset processes, such as rising sea levels. 
  • The LDF is overseen by a Governing Board that determines how the Fund’s resources are disbursed, with the World Bank serving as the interim trustee. 

Objectives 

  • The purpose of the Fund is 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.

Concerns 

  • Climate funds are often too slow to be accessible immediately after a disaster, particularly for local communities at the sub-national level.
    • It is anticipated that the LDF may face similar challenges.
  • Without drastic emissions reductions, more countries will suffer from climate change’s devastating effects, making additional resources for mitigation, adaptation, and loss and damage critical to achieving the Sustainable Development Goals.
  • The US withdrawal undermines global climate justice and must be held accountable for its role in climate damage and reparations.
India’s Approach 
– Despite suffering over $56 billion in damages from weather-related disasters between 2019 and 2023, India has focused more on mitigation efforts rather than adaptation, leading to limited participation in Loss and Damage dialogues at COP meetings.
– The introduction of a climate finance taxonomy in India’s Union Budget 2024 has raised hopes for increased international climate finance. However, without clear guidelines on accessing LDF funds, vulnerable communities will remain exposed.

Conclusion and Way Forward 

  • The effectiveness of the Loss and Damage Fund depends on addressing gaps left by existing climate finance institutions like the Green Climate Fund.
  • However, for the fund to truly be effective, the root cause of climate change—emissions—must be tackled.
  • India needs a clear legal and policy framework to streamline climate finance for adaptation and loss and damage, in line with locally led adaptation principles crucial for vulnerable communities.

Source:IE

 
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