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The Loss and Damage Finance Facility: Why and How


We are in the era of Loss and Damage (L&D). The hard limits to adaptation are being realised and the scale of the challenge ahead is significant as impacts of climate change are greater than previously expected. At the climate change conference, COP26, the negotiating bloc G77 & China proposed a solution to the gap in finance available to address their needs in the form of a L&D Finance Facility (LDFF). However, agreement could not be secured for the LDFF’s establishment or a process to do so. Instead, the Glasgow Dialogue (GD) was established which presently remains to be defined with clear milestones and outcomes. The objective of this paper is to contribute to achieving the establishment and operationalization of an LDFF that delivers on the needs of developing countries at speed and scale by explaining the why and how. The paper explains why the LDFF is necessary before turning to an analysis of the governing arrangements and core operational functions for the LDFF. Scenarios that elucidate the potential transformative value of the LDFF are described before the paper concludes with recommendations and a way forward to COP27 and beyond with the GD delivering concrete actions.

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