LOSS AND DAMAGE FINANCE
UNDERSTANDING ITS SCOPE
Michai Robertson
Senior Advisor (Finance), Alliance of Small Island States
March 2023

Scope of Loss & Damage Finance
Quality & Quantity: ‘new, additional, predictable and adequate financial resources’
Recipients: ‘to assist developing countries that are particularly vulnerable to the adverse effects of
climate change’
Focus / Use of Funds: ‘in responding to economic and non-economic loss and damage’
Link to Climate Change: ‘associated with the adverse effects of climate change, including extreme
weather events and slow onset events,’
Temporal Scope: ‘especially in the context of ongoing and ex post (including rehabilitation, recovery
and reconstruction) action’
COP 27 & CMA 4 Decisions: Paragraph 1

Scope of New Funding Arrangements
Primary focus of the new funding arrangements is on addressing actual loss and damage (i.e. ex-
post and ongoing response) while acknowledging that the support it provides for addressing must also
seek to:
1. minimize expected loss and damage to the greatest extent possible (i.e. adaptation co-benefits /
resilience building), and safeguard against maladaptation; and
2. pursue efforts to contribute to the overall averting of future loss and damage (i.e. mitigation co-
benefits).
NOTE: Increase in co-benefits typically correlates to an increase in cost for said activities
Mitigation
(Averting Future Loss
& Damage)
Adaptation
(Minimizing Expected
Loss & Damage)
Loss and Damage
Response
(Addressing Actual
Loss & Damage)
The point at which the event (extreme weather or slow onset) occurs
(i.e. response in the ex-post or ongoing context)
ANTICIPATION
(THE BEFORE)
REACTION
(THE AFTER)

Placing the Fund in the
International Public Finance Landscape
The point at
which the event
occurs
(extreme
weather or slow
onset)
Development Finance
(Baseline funding for development)
Adaptation Finance
(New and additional
funding for the
incremental costs of
preparing for anticipated
loss and damage)
Humanitarian Assistance
(Altruistic funding for saving lives,
alleviating suffering and maintaining
human dignity after conflict, shocks
and natural disasters)
For EWEs primarily
Loss and Damage
Response Finance
(New and additional
funding for addressing
actual loss and damage)
• World Bank (WB)
• Regional development
banks
• International Monetary
Fund (IMF)
• Global Environment
Facility SCCF & LDCF
• Adaptation Fund
• Green Climate Fund
• WB’s Global Facility for
Disaster Reduction and
Recovery (GFDRR)
• IMFs Resilience and
Sustinable Trust
• UN Central Emergency Response
Fund (CERF) & Country-Based
Pooled Fund (CBPF)
• International Red Cross & Red
Crescent (IFRC) Disaster Response
Emergency Fund (DERF)
• UNSECO Rapid Response Facility
(RRF)
• WHO Contigency Fund for
Emergencies (CFE)
• UNICEF Global Humanitarian
Thematic Funding (GHTF)
• Loss and Damage Fund

AOSIS Guiding Principles
Guiding principles for the Fund and other new funding arrangements:
• Focus on addressing loss and damage and acknowledgement of importance of minimizing & averting
• Recognition of the connection to climate inaction
• Provision of support on cooperative and facilitative basis
• Adoption of a high risk appetite in programming by the Fund
• Provision of support in a manner that is:
• timely for a response that can actually supplement any other existing finance types (e.g. humanitarian
assistance), especially for addressing any type of loss and damage from extreme weather events; and
• programmatic, especially for addressing any type of loss and damage from slow onset events
• Balanced and equitable enhanced direct access to funding, especially through existing regional and national
entities, and local non-State actor
• Active involvement of civil society in Fund operations
As agreed in late 2022

AOSIS Non-Exhaustive List of Activities Eligible for Support
As agreed in late 2022
Economic Non-Economic Enabling Activities
(Potential Linkage to SNLD)
Social protection support Memorialization Long term systematic observation and data
collection
Terrestrial area elevation Health rehabilitation services and relief (mental
and physical)
Long term capacity building
Debris clean-up and decontamination services Education relief
Infrastructure rehabilitation Displacement coordination and response
Culture and heritage restoration Land transfer as land territory (inclusive of
corresponding citizen rights for any displaced
people)
Ecosystem restoration Culture and heritage restoration
Public budget support Ecosystem restoration
Monetary funding support
Debt relief support
Catastrophe bonds support
Insurance support

Thank You!
Michai Robertson (michai.robertson@aosis.org)