Paragraph 9 of decision 4/CMA.4 states that “the 2nd Dialogue shall focus on the operationalization of the new funding arrangements established in paragraph 2 above and the fund established in paragraph 3 above as well as on maximizing support from existing funding arrangements relevant for, inter alia, responding to economic and non-economic losses, slow onset events and extreme weather events, and that they will inform the work of the Transitional Committee.” From this mandate, the Group believes that both the workshops and the Glasgow Dialogue should be organized to complement and inform the work of the Transitional Committee and support the development of a common understanding among Parties on the way forward.

The Glasgow Dialogue should then serve as an additional space for discussions on how best to fulfil the mandate outlined in the COP27/CMA4 decision on loss and damage finance, and in doing so, facilitate the development of a common understanding among Parties on the way forward. It is in this context that we suggest the topics below.

The G77 and China welcomes the historic decision at COP27 to establish the Loss and Damage Fund and call for advancing its full operationalization at COP28. We hope that discussions during the 2nd Glasgow Dialogue, taking place during this SBs session, will provide useful information to the work of the Transitional Committee.

We expect that the LDF will provide new, additional, adequate, and predictable grant-based funding for ongoing and ex-post actions that developing countries are and will have to take to address impacts of slow onset and extreme events, including rehabilitation, recovery, and reconstruction. We look forward to have the Loss and Damage Fund as a stand-alone operating entity of the Financial Mechanism of the Convention and its Paris Agreement and be guided by and accountable to both the COP and CMA. In that regard, the outcomes of the Loss and Damage Funding Arrangements and Fund must be designed in line with the provisions and principles of the Convention and its Paris Agreement, including the principles of equity and common but differentiated responsibilities and respective capabilities in the light of different national circumstances. We see the Loss and Damage Fund as the centerpiece of the new loss and damage funding arrangements. As developing countries, we stress the need for an inclusive, effective, and accessible Fund in view of our needs and the impacts that already are visible in all developing countries as a consequence of climate change.

More specifically, as already indicated in previous G77 submissions and statements on loss and damage finance, there are three key areas of work in relation to the Loss and Damage Fund and the discussions in relation to it that we wish to highlight:

One is with respect to the principles that should be applicable to loss and damage funding arrangements and the Loss and Damage Fund. As these will support the achievement of the objective of the UNFCCC and the goals of the Paris Agreement, the principles of equity and common but differentiated responsibilities and respective capabilities in the light of different national circumstances would be foundational principles that need to be reflected in the design and modalities of the funding arrangements and the Fund, including with respect to sources of and eligibility for funding and the governance of the Fund.

Second is that there are certain operational characteristics that should be reflected to address the challenges that developing countries have raised with respect to existing loss and damage financing. These include, for example, accountability to the COP/CMA; making sure that loss and damage funding is new, additional, predictable, and adequate; importance of grant-based financing and not increase the debt burdens of developing countries; be simple and easy to access directly; provide direct budgetary support to developing country governments and targeted financing for the directly affected communities and subnational governments; be needs-based and appropriate to different national contexts and not one size fits all; be integrated and consistent with the national sustainable development priorities of developing countries; and have planning and implementation timescales that range from short- to long-term decadal timescales to address the different timescales of climate events and development processes affecting developing countries on the ground.
Third is the need for loss and damage financing governance and operational modalities to be looked at in a systemic manner, such that while the Loss and Damage Fund would play a central role for the channeling of loss and damage-related funding to developing countries under the Convention and the Paris Agreement, other channels and sources should complement the Fund and be supportive of funding approaches that integrate loss and damage financing on the ground with developing countries’ broader national development and climate change actions.

For the Group of 77 and China, a decision that will make operational the establishment of the Loss and Damage Fund that all Parties achieved together at COP27 will be a key benchmark of success at COP28. Achievement of this success relies in large part on the focused deliberations of the Transitional Committee over the next five months to produce recommendations that we can adopt at COP28.