Loss and Damage Fund: U.S. withdrawal a setback for climate change

The Fund for Responding to Loss and Damage (FRLD) is anchored on the principle of wealthy nations providing financial support to poor, underdeveloped, and developing climate-vulnerable countries. The money is meant to enable their communities to recover from the impacts of climate disasters. 

This arrangement is premised on the fact that wealthy nations in the global north bear historical responsibility for developing these countries on account of fossil fuel emissions destroying the planet. 

Science shows that dangerous emissions set off climate change, whose impacts disproportionately devastate poor countries. Whenever these impacts occur, floods, typhoons, cyclones, droughts, and heatwaves leave a trail of destruction; damaging infrastructure, killing livestock, and displacing people.

For instance, according to the World Meteorological Organisation (WMO), in 2024, climate change intensified 24 out of 29 (80 percent) weather events experienced globally. These extreme weather events, which include floods in East Africa and heatwaves in the Sahel region, claimed 3700 lives. 

Responding to weather extremities growing in intensity and frequency by the day demands ambitious financing, including funding for loss and damage. 

It is against this background that last year, at the United Nations Climate Change Conference (COP29) held in Baku, Azerbaijan, Africa led the global south in demanding at least USD$1.3 trillion in climate finance annually until 2035 to respond to the climate crisis. In the end, only USD$300 billion was agreed upon.  

Harjeet Singh, a global advocate for climate and social justice, describes the move by the Trump administration as a continuation of the longstanding pattern of obstruction by the U.S. government to securing the necessary finance to address climate impacts.

“The decision undermines global efforts to deliver climate justice. However, the absence of the U.S. from the Fund does not absolve it of its responsibilities,’’ he insists.

Following an executive order issued on President Donald Trump’s first day in office, the U.S. has also set in motion the one-year process to exit the Paris Agreement - the second time they are departing from the global commitment. 

In under 50 days of his presidency, Trump has initiated a major U.S. pullback from multiple multilateral climate initiatives. He has also signed orders to eviscerate or withdraw funding for foreign aid and climate action worldwide.

Nairobi-based climate think-tank, Power Shift Africa (PSA), says the regrettable decision antagonises ‘‘the spirit of multilateralism that underpins global efforts to combat climate change,’’ and that the U.S. must reconsider its position ‘‘in the interest of the planet and future.’’

Mohamed Adow, PSA’s director, argues that this development is particularly appalling considering the growing urgency of the global climate crisis. 

‘‘This move risks undermining collective progress and erodes the trust necessary for effective international cooperation,” he says.

It is unclear whether leaving the board signals the U.S.’s intention to cut funding for loss and damage. What is clear, though, is that the action sends the wrong message to the global community and those in dire need of assistance.

350 Asia, a climate justice movement, describes the U.S’s exit as a ‘‘gut punch’’ to Asia’s frontline communities. Asia, home to 60 percent of the world’s population, has some of the world’s most climate-vulnerable communities in Bangladesh, Myanmar, and Nepal, all listed by the United Nations as least developed countries. 

Chuck Baclagon, a campaigner with 350 Asia, says the U.S’s USD$17.5 million commitment to loss and damage made at COP28 is ‘‘less than the cost of a single F-35 fighter jet.’’

‘’There is always money for war but never enough for climate reparations. The (recent) move lays bare Washington’s priorities,’’ he says.

 
History of FRLD
The U.S. is the world’s largest economy, with immense financial muscle, giving it staggering headroom to commit vast resources in climate finance, including to the loss and damage facility. This wealth also hands the U.S. immense geopolitical influence in the climate negotiation process. 

Most importantly, the U.S. is the biggest historical polluter, with 509 giga tonnes of carbon dioxide emissions since 1850, an analysis by Carbon Brief, a database of scientists and experts in the fields of climate science, policy, and energy, shows. This, effectively, makes the superpower historically responsible for the climate mess. 

Today, the U.S. is the largest producer of oil and gas, accounting for 20 percent of the world’s emissions. To Antonio Guterres, the UN Secretary-General, the global outrage over the controversy surrounding the FRLD is justified. 

“Many of the poorest nations have every right to be angry; angry that they are suffering most from a climate crisis they did nothing to create, angry that promised finance has not materialised,’’ Guterres has said in the past.

The FRLD was created at COP27 in Sharm-el-Sheikh, Egypt, in 2022, after decades of intense pressure from poor nations and civil society groups. The Fund became operational a year later, at COP28, in Dubai, United Arab Emirates, with 200 nations approving the framework that establishes the facility. Some wealthy nations contributed money to the Fund, with others pledging support. 

About USD$700 million was pledged, including USD$17.5 million by the U.S., a figure considered by many to be a pittance for the world’s worst emitter of greenhouse gases. Some estimates show that countries in the global south will need at least USD$400 billion yearly by 2030 to sufficiently deal with the economic costs of climate change-related loss and damage. 

Poor countries bear brunt
Wealthier nations often have the financial means to put in place the appropriate safeguards to cushion their economies from the impacts of climate change. Their economies are also largely based on industrial activity and, therefore, less susceptible to damage from extreme weather events. 

With fewer or no such safeguards at all, poor and developing countries suffer the worst impacts. But even among the world’s poor countries, the level of exposure to climate risks differs. The impacts are heaviest in the Least Developed Countries (LDCs), owing to minimal adaptation and resilience-building measures. Of the 46 countries listed as LDCs, 33 are African, with Uganda, Burundi, Burkina Faso, Somalia and Djibouti featuring. 

Communities in these nations predominantly rely on agriculture and fishing for livelihoods, which take a direct hit when climate change-driven extreme weather events strike. In particular, the food system in Africa is deeply vulnerable to the crisis, with the agriculture landscape significantly altered. 

Ndivile Mokoena, who coordinates climate justice work for GenderCC in South Africa, says climate impacts are responsible for the inability of smallholder women farmers in southern Africa to feed their families.

‘‘These events can wipe out an entire crop season. This leaves smallholder farmers with nothing to sell to meet their families’ needs. When these women go shopping, they often have to choose between buying food, electricity, or hygiene products,” she says.

To Mokoena, financial support is needed to help these farmers recover from the losses suffered over the decades and to diversify their livelihoods. 

‘‘You cannot negotiate with a hungry stomach. You cannot tell a hungry family that they will feed next month when climate funding has been secured,’’ she adds.

Elsewhere on the continent in Cote d’Ivoire, Ghana, Nigeria, and Cameroon, which together produce about 75 percent of the world’s cocoa, rising temperatures and erratic rainfall, both due to climate change, have ravaged cocoa yields, leading to a 400 percent rise in global cocoa prices in recent years, as revealed by a recent report by the international development charity Christian Aid.

The report, ‘‘Cocoa crisis: How chocolate is feeling the bite of climate change,’’ coincides with new data from Climate Central showing that over the past decade, climate change added at least three weeks above 32°C (89.6°F) annually during the long cocoa crop season between October and March in Côte d’Ivoire and Ghana. 

The trend has immensely upended economies in the West African cocoa belt. This only worsens levels of poverty, hunger, and inequality, factors that Ibrahim Coulibaly, a farmer representative in West Africa, sees as a product of decades of underinvestment and growing exposure to climate change.

“Only support to farmers through finance can safeguard their livelihoods against such disruptions. If farmers have more direct access to climate finance, we can scale up nature-friendly practices such as planting trees to protect the cocoa pods. This is key to adaptation,” he says. 

The slightest reduction in financial aid - or total withdrawal of support - is a matter of life and death for millions in underdeveloped countries. This high dependence also creates extra pain points in the face of external factors such as global commodity price fluctuations, economic downturns, and climate change. 

As of 2022, Kenya, Uganda, and Tanzania, for instance, had a combined external debt of USD$57 billion, as revealed by estimates from the IMF World Bank Debt Sustainability Report. Ironically, the bulk of this debt is owed to wealthy and developed nations responsible for triggering the climate crisis. 

For the East African trio and their counterparts, this external debt burden only complicates their ability to set aside resources for development and investing in resilience-building efforts.

Way forward
Some experts, though, have a different view, arguing that Africa must look elsewhere for support. Some point to the East and others to the North. 

Ronald Osumba, a senior political advisor at the Tony Blair Institute for Global Change (TBI), says African leaders must embrace an ‘‘Africa first’’ agenda as an urgent priority - one that puts to the fore the continent’s interests and economic transformation.

“Africa’s help will come from within. This is the moment for bold leadership and a united commitment to self-reliance, ensuring Africa shapes its future on the global stage,’’ he notes.

In a recent report, TBI indicated that Africa’s relations with the U.S. had entered a ‘‘critical juncture’’ that will reshape how the latter engages with the former, with far-reaching implications for trade, aid, and geopolitics.

Osumba co-authored a recent paper by the TBI “Africa First”: A New Vision for Africa’s Growth and US Engagement’’ in which the authors emphasise that under the new administration, U.S.-Africa relations ‘‘will be explicitly pursued within the context of U.S. interests,’’ and not vice versa.

While the shift in U.S. foreign policy presents a challenge, Osumba says it also highlights the need for Africa to assert its agency. The changing geopolitics also underlines the need for Africa to foster partnerships that align with its vision for growth, development, and self-reliance.

‘‘By prioritising homegrown solutions and strengthening intra-African collaboration, the continent can define its developmental trajectory and reduce its vulnerability to external policy shifts,’’ he advises.

Some of the solutions proposed include strengthening intra-African trade, building local value chains, and developing the talent of Africa’s youth.

However, Singh and Adow take a different view of climate funding and reparations. Singh observes that climate justice can only be attained if, and when, those responsible pay for the climate damage. 

‘‘We must hold them accountable and ensure they contribute their fair share towards global climate reparations,” he explains.

Adow says, ‘‘Shirking your responsibility does not absolve you of your obligations, especially when you have the burden of historical responsibility on your back. Now, more than ever, the world must stand together to uphold its commitments and ensure that no nation is left behind in the fight for climate justice.’’

The U.S. has promised to continue with its relentless review of its past climate commitments, with more withdrawals expected in the future and, predictably, poor communities on the losing end. 

The TBI, however, observes that the response of global leaders toward the shifting geopolitical landscape could determine ‘‘whether this era enables progress or deepens existing inequalities.’’

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