Wealthy nations are at risk of compromising the effectiveness of the Loss and Damage Fund (FRLD), which has committed to delivering $250 million in assistance next year to countries vulnerable to climate change, according to developing country representatives. Despite rich nations having pledged over $789 million, only $348 million has been transferred to date.
Elena Cristina Pereira Colindres, representing developing countries on the fund’s board, expressed concerns about the current lack of “transparency and predictability” regarding the timing of these funds. She pointed out that countries like Italy, the European Union, and Luxembourg have made pledges without specifying when their contributions will be made. Some nations, including the United Arab Emirates and Australia, are providing funds in staggered schedules, which complicates planning for the board.
Pereira emphasized that while the board has agreed to spend $250 million next year, this amount should not be seen as indicative of future funding requirements. She highlighted that the actual needs can reach into the “hundreds of billions,” stressing the urgency for developed nations to commit to providing $100 billion annually by 2030 for loss and damage financing.
A study published in 2024 revealed that climate change results in losses and damages amounting to approximately $395 billion each year. In light of these findings, boards representing developing countries intend to craft a resource mobilization strategy by the end of 2025 to secure additional funding.
During a recent board meeting in the Philippines, members discussed the necessary steps to ensure that the fund adequately meets the immediate and long-term needs of climate-affected communities. Richard Sherman, co-chair of the board, indicated plans for early project approvals by next year, including calls for proposals.
The discourse surrounding the fund has become increasingly critical, particularly regarding the inclusion of leveraging private-sector finance in funding projects. Some members of the board and advocacy groups have raised concerns that this approach might transform the fund into an investment entity rather than a solidarity fund meant to assist those affected by climate crises.
Philippine President Ferdinand Marcos, in remarks before the board meeting, stressed the urgency of disbursement, indicating that delays exacerbate the plight of vulnerable families facing the dire impacts of extreme weather.
This ongoing dialogue highlights the dynamic and complex landscape of climate funding, emphasizing both the commitments made by wealthy nations and the pressing need for tangible financial support. As developing countries continue to advocate for robust and accessible financing, there remains hope that these discussions will lead to increased resources and a more robust response to the challenges posed by climate change.
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