Discussion paper on Operationalization of the Loss and Damage Fund: Challenges and Opportunities

29 Nov 2023
Amlan Mishra

At the 27th Conference of the Parties (COP27) of the United Nations Framework Convention on Climate Change (UNFCCC), the participating states agreed on the broad modalities for the establishment of a historic Loss and Damage Fund. Furthermore, COP27 set up a transnational committee to “make recommendations for consideration and adoption by COP28” for the loss and damage fund, making the particulars and modalities of the fund a key topic for COP28 in December 2023.


The proposed aim of such a Loss and Damage fund is to ensure that developing countries have financial assistance as they contend with the negative impacts of climate change, either through sudden extreme events or through long-term damages through desertification and sea level rise. The loss and damage fund is the result of a years-long process by the developing countries to set up a mechanism to rebuild and further develop resilience in their physical and social infrastructure. However, while such an establishment is historic, there are several challenges that need to be overcome for the Loss and Damage fund to be functional and effective. This issue brief examines some of the crucial considerations that the Transitional Committee and COP members will need to come to an agreement on, from a governance, financial, and scientific viewpoint. Furthermore, it also seeks to examine the implications of the setting up of such a fund on India, as well as the role India can play in the establishment and functioning of such a loss and damage mechanism.

Climate change
Climate finance
Policy Makers