Fund for Responding to Loss and Damage

The Fund for Responding to Loss and Damage provides financial support to developing countries that are particularly vulnerable to climate change impacts. It addresses economic and non-economic loss and damage associated with extreme weather events and slow-onset processes, especially impacts that cannot be fully avoided through mitigation or adaptation.

Creation and institutional basis

Parties established the fund at COP27 in 2022 and operationalized it at COP28 in 2023. It is an operating entity of the UNFCCC Financial Mechanism, serves both the Convention and the Paris Agreement, and functions under the guidance of and is accountable to their governing bodies.

Core mandate

• The fund assists particularly vulnerable developing countries in responding to loss and damage from extreme weather events, such as floods and cyclones, and slow-onset events, such as sea-level rise and desertification.
• It may support responses to economic losses involving infrastructure, property and livelihoods, as well as non-economic losses involving lives, health, ecosystems and cultural heritage.
• Support may cover emergency responses, recovery, reconstruction, rehabilitation and measures addressing displacement, relocation and human mobility.
• It complements existing climate finance arrangements by addressing priority gaps in the institutions and funding available for loss and damage.

Financing and access principles

The fund is intended to promote country ownership and provide resources through grants, concessional finance and other financial instruments. Its governing instrument permits access through national, regional and international entities, while also envisaging simplified access and support for communities, Indigenous Peoples and vulnerable groups.

• Financing should consider recipients' needs, priorities and national circumstances, including debt sustainability.
• Resources may come from developed countries and other public, private and innovative sources.