Industrialised nations, who have historically been and continue to be the main drivers of anthropological climate change, pledged a mere pittance of $700 million to the Loss and Damage fund, less than 0.2% of the annual losses developing countries suffer due to global warming.

The initial pledges for the loss and damage fund fall woefully short of what is needed. While Germany, the United Arab Emirates, and the UK offered token contributions of $100 million, $100 million, and $75 million, respectively, the United States, a major climate polluter, pledged a mere $17.5 million, demonstrating a blatant disregard for its responsibility in causing climate-related harm.

Other pledges included $50 million from Denmark, $27 million from Ireland and the EU, less than $12 million from Canada, $25 million from Norway, and $1.5 million from Slovenia. Some $429 million was pledged by the end of the opening day at COP28.

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As the first week of this year's conference drew to a close, combined pledges amounted to just $700m - a negligible 0.2% of the estimated funding required and betraying a lack of genuine commitment from wealthy nations to address the devastating consequences of climate change faced by vulnerable communities around the world.

The late Bangladeshi scientist Dr Saleemul Huq, who tragically passed away in Dhaka in the weeks before COP28, was one of the great champions of setting up such a fund, that was announced at COP27 in Sharm El Sheikh. The International Centre for Climate Change and Development, or ICCCAD, which Dr Huq served as its director, is currently leading an effort to have the Loss and Damage fund named after him.  

Despite the initial announcement at COP27, the loss and damage fund only gained momentum in the weeks before COP28. Then in a historic move, the fund was agreed at the opening plenary of the first day of the COP28 summit in Dubai – a hard-won victory by developing countries that signalled a renewed commitment by the developed, polluting nations to finally provide financial support for some of the destruction already under way.

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But so far pledges have fallen far short of what is needed, with the loss and damage they would need in developing countries estimated by one non-governmental organisation to be greater than $400bn a year – and rising. Estimates for the annual cost of the damage have varied from $100bn-$580bn.

The UAE is likely to see the official introduction of the Loss and Damage fund as a major win for its presidency, but the underlying agreement's ambiguity and lack of concrete commitments have also drawn strong criticism from climate activists and vulnerable communities worldwide.

Mirza Shawkat, Director of the Department of Environment and also a member of the Bangladesh delegation, talked to UNB regarding the loss and damage fund agreement.

Even though the affected countries require between $100 billion and $580 billion annually to address loss and damage, current financing stands at less than a billion, he said.

“The World Bank has been entrusted with managing the Loss and Damage Fund on behalf of contributing countries. While not ideal, this decision was reached through consensus. The World Bank will serve as the trustee for the next four years,” he said.

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While the agreement marks a step forward, details regarding the fund's structure and operation are still being discussed within the Global Stocktake negotiations. The Global Stocktake negotiations now hold the burden of determining whether the world can overcome this collective inaction and secure the funding necessary to prevent further loss and damage.

Aminul Haque, Director of Coast Foundation, expressed concerns about the lack of substantial funding for the Loss and Damage Fund. He pointed out the absence of a timeline from developed countries regarding the utilization of these funds.

Haque further criticized the failure of wealthy nations to fulfill their financial commitments towards the Adaptation Fund, which supports countries vulnerable to climate change.

“Despite pledging $40 billion, only $21 billion has materialized at the current COP. It represents a 15-20% decrease compared to the previous year,” Haque said, noting that inadequate funding for the fund will exacerbate the vulnerabilities faced by at-risk nations.

Meanwhile, Bangladesh is still conducting a study to assess the loss and damage caused by climate change. Once completed, this study will provide insights into the extent of harm inflicted by climate change on various sectors in Bangladesh.

M. Hafizul Islam Khan, another member of the Bangladesh delegation and coordinator for the LDC group's loss and damage efforts, told UNB that at least eight more months are needed before the Loss and Damage Fund begins operation.

The board of directors managing the fund will convene its first meeting in January next year and ultimately decide on the disbursement of funds, he said.

Khan noted that Bangladesh has not yet been able to access the Global Climate Fund due to insufficient preparation. Therefore, he added that it is imperative to begin building the necessary capacity and structures immediately to utilize the Loss and Damage Fund effectively.

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The most vulnerable nations to the adverse impacts of climate change- have lost approximately $525 billion because of climate change’s temperature and precipitation patterns. These nations make up 22% of the global population and only 5% of global emissions combined.

The climate crisis has shattered lives, disrupted livelihoods, destroyed biodiversity, and uprooted cultural traditions and identities.

The loss and damage fund aims to hold rich countries responsible for repairing the damage inflicted on vulnerable nations by climate change. These nations must provide financial compensation to poorer nations bearing the brunt of rising sea levels, devastating floods, crippling droughts, and intense cyclones, among other extreme weather events.