Will the new loss and damage fund replicate the same old exclusion of local voices and organisations?

Lyndsay Walsh Climate Change, Events, Power Shifts

How can a community-based organisation with three staff compete with the World Bank or an INGO for resources to address climate damage? Lyndsay Walsh on why this week’s crucial pre-COP meeting on recommendations to establish the loss and damage fund must create more space, money and support for local organisations.

Climate activists, volunteers and community members from the Mushin community during a climate protest in Mushin, Lagos State, Nigeria. (picture: Taiwo Aina/Oxfam)

With just four weeks to go till COP28, communities and campaigners are waiting to see if promises to pay for climate-fuelled loss and damage will be kept.

A critical moment will be this week’s fifth and (hopefully) final meeting of the group of countries tasked with recommending what the new loss and damage fund will look like.  This “Transitional Committee” was supposed to finalise recommendations at its fourth meeting but points of disagreement, mainly about who would pay into the fund and where it will be hosted, has created need for this extra meeting.

So, what will the new fund look like and how should it work? When I speak with colleagues, particularly those living in countries bearing witness to loss and damage, they often speak about how they hope the new loss and damage fund will be different. Different in truly involving and being centred around affected communities and groups who have traditionally been excluded and marginalized due to gender, age, disability, race and ethnicity, among other reasons. Different in that it will offer a way for communities, who know their needs best, to access funding to meet those needs themselves.

But there has been little discussion of how to do this in meetings to set up the fund.

Why it will be vital to centre, and fund, affected communities

Communities and representatives of marginalized groups know their needs better than anyone and community access to finance and ownership of programmes is positive for many reasons: it can lead to more sustainable and long-lasting changes; it accelerates the move away from neo-colonial donor-driven systems; and it can lead to stronger results and lower risk of poor programming.

From floods in Pakistan and Libya, to storms in the Philippines and Mozambique, to sea level rise in the Pacific: local actors are the first to arrive in a climate-fuelled crisis and the last to leave (often never leaving). Yet they are hugely underfunded. This is largely due to them not being properly resourced to undertake the detailed and lengthy applications for money that climate funds (and many other types of funds) involve. How can a local organisation of less than three full time staff compete with the World Bank or an INGO for resources? They can’t – unless the fund has specific policies and processes in place to make them more accessible.

As one Oxfam colleague told me: “Local communities know best what they need to recover from climate change. The loss and damage fund must not replicate failed models that give all the power to wealthy countries and international financial institutions who don’t and can’t understand the divergent needs and approaches required in different contexts.”

Once a system is set up, it is hard to change

Loss and damage negotiators must learn from the slow progress of localisation of humanitarian funding, where the need to shift power and decision making to the local level has been long accepted. From the Grand Bargain (with over 63 signatories, including 25 donor States), which has a target of 25% of humanitarian funding getting to local responders as directly as possible, to the Pledge for Change, which aims to reimagine the aid system on principles of self-determination and equitable partnerships – there has been a lot of positive talk. But talk has sadly not been matched by action (for example, the Grand Bargain has been repeatedly judged as failing on meeting its aforementioned target).

One reason why is that these old systems are incredibly difficult to change once established, and funds set up within them often just fall into the same pattern of sending finance to big, international actors such as UN agencies and multilateral development banks (MDBs). It is simpler, quicker and deemed to be less risky. The loss and damage fund can either repeat this same pattern, entrenching inequality in who gets to access finance to respond to climate-driven devastation, or it can seek to reduce inequality in the finance system – and shift power and funds to organisations and people living through these escalating climate impacts.

Worrying signs of a top-down approach

Proposals to have the fund hosted by the World Bank, which would seemingly make access for communities extremely difficult, are disappointing and more of the same, old, top-down solutions that play to the preferences of donors rather than affected communities. And narrow definitions of ‘country ownership’ in the negotiations, mainly referring to central governments, must be widened to include communities and local actors.

As another colleague said to me: “The fund must not become an instrument under the World Bank to serve rich countries’ continued dominance in international politics.”

Much work will remain after COP28 to establish a loss and damage fund which best serves affected communities and marginalized groups, and protects and fulfils their rights. But in Dubai we need to see agreement on a Governing Instrument for a loss and damage fund that recognises the importance of affected communities and groups as agents of change in addressing loss and damage.

How to make loss and damage funding work for communities

Firstly, the process needs to better ensure communities have meaningful ways to feed into the set-up and running of the loss and damage fund. The Dedicated Grant Mechanism under the Forest Investment Program and the Global Environment Facility’s Small Grants Programme offer examples for how to do this. As a colleague from the Pacific Islands told me: “This is the sad reality for us as Pacific Islanders. Despite having to deal with climate induced disasters, loss of agricultural land, communal spaces and livelihoods, we are distanced from conversations around things like climate finance and a loss and damage fund – and yet we have some of the most acute experiences of climate-induced loss and damage.”

That needs to change and dedicated access to all discussions for community-based organisations and representatives of affected groups would be a good way to start.

Secondly, COP28 must establish a window under the loss and damage fund that is dedicated to facilitating community access to grant-based finance.

These would be important steps to delivering inclusive, just and, crucially, effective action on loss and damage from climate change. As a colleague based in Africa told me: “Our plea to the rich nations is to make the L&D fund a reality. They cannot further delay and they must make sure it gets grant-based finance to impacted communities quickly. Do not take us back to the colonial era.”


Lyndsay Walsh

Lyndsay Walsh is a climate policy adviser at Oxfam GB