Can we make the Loss and Damage fund work? | The Business Standard
Skip to main content
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
The Business Standard

Friday
June 13, 2025

Sign In
Subscribe
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
FRIDAY, JUNE 13, 2025
Can we make the Loss and Damage fund work?

Supplement

Dr Fazle Rabbi Sadeque Ahmed
29 January, 2024, 10:35 am
Last modified: 29 January, 2024, 11:54 am

Related News

  • Saber calls for immediate disbursement of loss and damage fund
  • Private airlines struggling to survive due to poor policy support
  • Leather industry: A call for revival and sustainability
  • Access to food and energy
  • Renewable energy: A nature-based sustainable solution for Smart Bangladesh

Can we make the Loss and Damage fund work?

It may be hard to be optimistic on the quantity and quality of loss and damage financing, but vulnerable developing countries should work together to ensure adequate, predictable, new and additional funds

Dr Fazle Rabbi Sadeque Ahmed
29 January, 2024, 10:35 am
Last modified: 29 January, 2024, 11:54 am
Photo: TBS
Photo: TBS

In the United Nations Framework Convention on Climate Change (UNFCCC), loss and damage has emerged as a third key pillar of climate policy, together with mitigation and adaptation, to address increasing climate change impacts in developing countries that are particularly vulnerable to the adverse effects of climate change. 

While there is no commonly agreed definition, 'loss and damage' is most commonly understood as the adverse effects of climate change that are not or cannot be avoided by mitigation and adaptation efforts. 

This definition implies that there are two types of loss and damage: those that exceed adaptation limits and those that can be minimised by taking adaptation efforts and finance. The limits to adaptation are the points at which adaptation fails to avert intolerable climate impacts.

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

Opportunities for averting, minimising and addressing loss and damage can be found across a spectrum ranging from reducing GHG emissions to disaster risk management, climate change adaptation, and addressing residual loss and damage. 

Reducing global warming can help to avert losses and damages while disaster risk management and climate change adaptation actions can help minimise them. 

Adaptation limits and loss and damage 

Loss and damage from climate change arises when efforts to avert or minimise climate impacts through mitigation and adaptation fail. The points at which adaptation fails to avert climate impacts are called the 'limits' to adaptation. 

Research on adaptation limits commonly refers to hard and soft limits. 

Hard limits are those that arise in physical systems, and which cannot be averted through adaptation action but rather only through mitigation of GHGs. 

Soft limits are those that can be avoided or minimised through more concerted adaptation efforts. Thus, the more the adaptation gap is reduced, the fewer soft limits will be crossed and the less loss and damage there will be.

Hard limits to adaptation 

Even if the temperature goal of the Paris Agreement is achieved, there will still be between 1.5°C and 2°C of warming above pre-industrial levels. At 1.5°C of warming, widespread changes in highly climate-sensitive ecosystems such as coral reefs and tropical glaciers are likely. 

It is in natural systems such as these where limits to adaptation seem hard in the sense that there are few options available to humans to avoid the points at which they are fundamentally damaged and some or all their unique and valued characteristics are lost, according to the Intergovernmental Panel on Climate Change [IPCC] 2022.

Many studies indicate the risks of changes in ecosystems resulting from climate change. For example, the coral reefs of the Indian Ocean are threatened with collapse due to marine heating (Obura et a. 2022); beaches and wetlands in California may be lost due to rising sea levels (Barnard et al 2021); the West Antarctic ice sheet may progressively melt due to warming (Pattyn and Morlighem 2020); many mountain glaciers may tip into irreversible melting beyond 2°C of warming (Hock et al 2019); parts of the Amazon rainforest are at risk of turning into savannahs because of drying, heat and fire; and changes in the West African monsoon may lead to shifts in vegetation cover in the Sahel (McKay et al 2022).

Climate-sensitive ecosystems facing hard limits have both intrinsic and extrinsic value to people. Extrinsic (or instrumental) values are those that arise from the goods and services provided by ecosystems to peoples whose livelihoods depend on them. 

The loss of the goods and services provided by ecosystems that exceed their limits to adaptation often flows on to loss and damage in social systems. For example, migration and mobility in response to water insecurity can enhance conflict and disrupt the cohesion of families and communities; the loss of reefs undermines the livelihoods of fishers, human health, and in extreme cases the sovereignty of whole countries; and changes in vegetation cover can increase hunger and malnutrition.

Soft limits to adaptation 

In some cases, loss and damage to climate-sensitive ecosystems can be avoided or at least greatly delayed through reductions in non-climate stressors. 

For example, human diversions of water are often a larger driver of change in wetlands than climate; poorly sited and designed structures can have a bigger impact on coastal erosion than sea level rise; and logging and habitat fragmentation can have a bigger impact on biodiversity losses in forests than climate drivers. 

In these cases, there are actions that humans can take to avert and minimise loss and damage, and so the limits to adaptation may be called soft in the sense that known practices and technologies can be effective, even if they are not immediately available and their application seems unlikely. 

The risk that adaptation fails increases with GHG emissions. The more warming there is, the less time there will be for adaptation to take effect. Slowing the rate of warming allows more time for soft limits to adaptation to be overcome. 

Given enough time, adaptation action may indeed overcome some soft adaptation limits in ways that avoid and minimise some loss and damage. Nevertheless, climate extremes are already causing significant loss and damage, and this trend will continue despite even the most effective adaptation and well before anticipated limits to adaptation have been reached.

Finance to address loss and damage 

The decision to establish a dedicated fund to assist developing countries in responding to loss and damage associated with climate change was a historic move agreed at COP 27 in 2022. In COP 28 at Dubai, the host and the modalities of its governance were finalised. 

So far, around $792 million has been pledged by some countries for this proposed loss and damage fund. For the first four years, the World Bank will be the interim host for this fund and it will be governed by a board of 24 members both from developed and developing countries.

As we know, overall climate finance is very limited compared to the needs. Financial need per year is $215 billion to $387 billion only for adaptation and currently we are getting around $20 billion. More than 50% of that funding are loans. 

There is no universally accepted definition of climate finance and accounting of climate finance is not transparent. According to a report by Oxfam, financing for adaptation is 7.92% and access to adaptation finance is very slow and complicated compared to mitigation financing. 

In most cases, adaptation (also applicable for loss and damage financing) financing does not generate any revenue and grant is the suitable option (if not the only option) for adaptation financing. 

Furthermore, only 1-2% money flows through the UNFCCC channel and that is the most suitable for the vulnerable countries as all the groups have the representation on governance of the channel. 

Maximum money flows through bilateral channels and there are big questions on the quality of that bilateral climate financing. The Oxfam study observed that vulnerable countries, particularly African countries, might fall in a new debt trap due to loan-based adaptation financing. 

Considering the previous experience on adaptation financing, we may not be very optimistic on the quantity and quality of loss and damage financing. 

However, vulnerable developing countries should work together with the common goal to get commitment from the developed countries to ensure adequate, predictable, new and additional loss and damage financing and that funding should be easily and quickly accessible.


Dr Fazle Rabbi Sadeque Ahmed. Sketch: TBS
Dr Fazle Rabbi Sadeque Ahmed. Sketch: TBS

The author is Deputy Managing Director (Environment and Climate Change) at PKSF and was a member of the official delegation of Bangladesh for COP 28.

Loss and Damage funding / TBS anniversary / Food energy and environment

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Infographics: TBS
    Lengthy legal road ahead to repatriate Saifuzzaman's wealth from UK
  • From fact-checker to fact-checked: CA Press Wing’s turn in the hot seat
    From fact-checker to fact-checked: CA Press Wing’s turn in the hot seat
  • Wreckage of a Boeing 787 Dreamliner showing part of its registration "VT-ANB" in Ahmedabad, India, June 12, 2025. REUTERS/Amit Dave
    Air India Dreamliner crashes into Ahmedabad college hostel, kills over 290

MOST VIEWED

  • Keir Starmer declines to meet CA Yunus: FT report
    Keir Starmer declines to meet CA Yunus: FT report
  • Wreckage of a Boeing 787 Dreamliner showing part of its registration "VT-ANB" in Ahmedabad, India, June 12, 2025. REUTERS/Amit Dave
    Air India Dreamliner crashes into Ahmedabad college hostel, kills over 290
  • Saifuzzaman Chowdhury. Photo: Collected
    UK crime agency now freezes assets of ex-land minister Saifuzzaman: AJ
  • File Photo of Chief Adviser Muhammad Yunus: UNB
    Prof Yunus to receive Harmony Award from King Charles today
  • Infofgraphics: TBS
    DGHS issues 11-point directive to prevent spread of Covid-19 in Bangladesh
  • Bangladesh Bank Governor Ahsan H Mansur. TBS Sketch
    Bangladesh mulls settlements with tycoons over offshore wealth: BB governor tells FT

Related News

  • Saber calls for immediate disbursement of loss and damage fund
  • Private airlines struggling to survive due to poor policy support
  • Leather industry: A call for revival and sustainability
  • Access to food and energy
  • Renewable energy: A nature-based sustainable solution for Smart Bangladesh

Features

Among pet birds in the country, lovebirds are the most common, and they are also the most numerous in the haat. Photo: Junayet Rashel

Where feathers meet fortune: How a small pigeon stall became Dhaka’s premiere bird market

1d | Panorama
Illustration: Duniya Jahan/ TBS

Forget Katy Perry, here’s Bangladesh’s Ruthba Yasmin shooting for the moon

2d | Features
File photo of Eid holidaymakers returning to the capital from their country homes/Rajib Dhar

Dhaka: The city we never want to return to, but always do

3d | Features
Photo collage shows political posters in Bagerhat. Photos: Jannatul Naym Pieal

From Sheikh Dynasty to sibling rivalry: Bagerhat signals a turning tide in local politics

5d | Bangladesh

More Videos from TBS

Banks' estimates were wrong: Bangladesh Bank spokesperson

Banks' estimates were wrong: Bangladesh Bank spokesperson

4h | Podcast
What exactly happened to the ill-fated Boeing aircraft?

What exactly happened to the ill-fated Boeing aircraft?

5h | TBS World
Govt to set up Debt Office as loan burden to hit Tk29 lakh cr by FY28

Govt to set up Debt Office as loan burden to hit Tk29 lakh cr by FY28

5h | TBS Insight
Curfew imposed for second night in Los Angeles

Curfew imposed for second night in Los Angeles

6h | TBS World
EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Advertisement
  • Privacy Policy
  • Comment Policy
Copyright © 2025
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net