THE concept of loss and damage originated in the early 1990s due to the recognition that existing frameworks were inadequate in addressing the full impacts of climate change, especially for vulnerable countries.
The idea was first proposed in 1991 by Vanuatu on behalf of the Alliance of Small Island States. It emphasized the need for an international insurance pool to compensate small island and low-lying coastal developing countries for loss and damage caused by sea-level rise.
Over time, loss and damage became incorporated into the frameworks of the United Nations Framework Convention on Climate Change (UNFCCC). This ultimately led to the establishment of the Warsaw International Mechanism for Loss and Damage in 2013, and its inclusion in the Paris Agreement in 2015.
After 30 years of advocating for dedicated finance mechanisms to address loss and damage, a significant decision was made at the UN Climate Change Conference (COP27) in 2022 in Sharm el-Sheikh, Egypt. This decision marked the official establishment of a Loss and Damage Fund within the UNFCCC framework for the first time.
The fund became operational at COP28 in Dubai, United Arab Emirates, in December 2023. Then, on July 9, 2024, during the second meeting of the Loss and Damage Fund Board, now renamed the Board of the Fund for Responding to Loss and Damage, it was decided that the Philippines would be the host country.
This decision demonstrates the proactive stance of the Philippines in climate negotiations and its role as a leader among climate-vulnerable nations. President Ferdinand Marcos Jr. himself emphasized that, “Hosting the Loss and Damage Fund reinforces our dedication to inclusivity and our leadership role in ensuring that the voices of those most affected by climate change shape the future of international climate policies.”
The Philippines has consistently experienced the severe impacts of climate change, from frequent typhoons to rising sea levels. The People’s Climate Vote 2024 revealed that 76 percent of Filipinos think about climate change daily or weekly. By hosting the Loss and Damage Fund, the country symbolizes its commitment to fighting climate change and supporting other vulnerable nations.
Hosting the fund also provides the Philippines with an opportunity to enhance its influence in international climate negotiations. It can advocate for more robust financial mechanisms to support countries dealing with loss and damage, aligning with its long-standing advocacy for climate justice and equity.
In addition, hosting the fund will attract international expertise, resources and technical support to the Philippines. This will help build the country’s capacity to effectively manage and utilize funds, promoting sustainable development and resilience. The presence of the fund’s secretariat and related activities can stimulate local economies, create jobs and foster development in sectors such as research, consultancy and project management.
Challenges
A statement published by Aksyon Klima, the country’s largest civil society organization network for climate action, on their website states, “It (the Philippines) must provide effective coordination and timely leadership for the Board to make the proper decisions and set the course for the Fund’s operationalization, ensuring that the needs of those most affected by economic and noneconomic loss and damage are urgently, fairly and effectively addressed.”
While hosting the Loss and Damage Fund Board has the potential to elevate the country’s status in the climate map and bring various benefits, it also poses significant challenges.
The Philippines will need to establish robust administrative and governance frameworks to effectively manage the fund. This includes ensuring transparency, accountability and efficient disbursement of funds to those in need.
Building local capacity to handle the technical and administrative demands of the fund is crucial. This includes training local experts and creating systems to monitor and evaluate the impact of funded projects.
Successful management of the fund will require close collaboration with international bodies, donor countries and other stakeholders. The Philippines will need to foster strong partnerships and maintain effective communication channels.
Engaging both the public and private sectors in fund-related activities is essential. This includes encouraging investments in climate-resilient infrastructure and fostering innovation in climate adaptation and mitigation strategies.
Hosting the Loss and Damage Fund is a significant opportunity for the Philippines to strengthen its leadership in climate action and support global efforts to address the impacts of climate change. While it presents challenges, with the right strategies and collaboration, it can enhance the country’s resilience and contribute to sustainable development for vulnerable communities worldwide.
The author is the founder and chief strategic adviser of the Young Environmental Forum and a director of Climate Tracker Asia Inc. He completed a climate change and development course at the University of East Anglia (United Kingdom) and an executive program on sustainability leadership at Yale University (USA). You can email at
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