Counting on … day 137

5th September 2025

Loss and Damage Fund

Mitigation and adaption funds may help countries minimise the impact of climate change but they do not per se cover the cost of making good damage caused by climate change. Mitigation and adaption funds may be used to limit flooding for example, but do not pay for replacing buildings and infrastructure damaged by floods, nor pay compensation for loss of income and livelihoods.

For many years poorer, vulnerable countries have been campaigning for the establishment of a Loss and Damage fund whereby the richer countries would contribute towards the cost of climate induced disasters. Finally at in 2022 at COP 27, there was agreement to set up such a Loss and Damage Fund.

What has not yet been agreed is: 

• Who will be able to access the Fund: richer nations want this limited to the most vulnerable nations
• What costs will be covered
• Who will pay into the Fund and how much.

As of April 2025 a total of USD $768.40 million has been pledged to the Fund by 27 contributors including the UK who contributed $52 million (1)

A study by the World Economic Forum in 2023 found that over the previous 20 years, extreme weather events globally, like hurricanes, floods and heat waves, had cost the global economy an estimated $2.8 trillion. (2) Whilst that sum would include developed and developing countries alike, it does point to the pitiful size of the Loss and Damage Fund. 

(1) https://unfccc.int/topics/climate-finance/funds-entities-bodies/fund-for-responding-to-loss-and-damage/pledges-to-the-fund-for-responding-to-loss-and-damage

(2) https://www.weforum.org/stories/2023/10/climate-loss-and-damage-cost-16-million-per-hour/

Further reading:-

Loss and damage: who foots the bill for climate destruction?

https://www.weforum.org/stories/2022/11/loss-and-damage-climate-change-harms-poorest-countries/

Green Tau issue 79: Loss and Damage