The establishment of the Loss and Damage Fund (LDF) during the 2022 UN Climate Change Conference (COP27) in Egypt marked a significant diplomatic achievement for Pakistan, further solidified at COP28 in the United Arab Emirates. Over the past two years, the concept of Loss and Damage (L&D)—referring to the irreversible impacts of climate change that exceed ecosystems’ adaptive capacities—has emerged as a critical focus within climate finance discussions. However, the allocated funding remains alarmingly insufficient, currently standing at approximately USD 700 million, which is a far cry from the estimated USD 290-580 billion needed by 2030.
For nations like Pakistan to effectively harness the potential of L&D financing, it is essential to understand the two foundational mechanisms that preceded the LDF: the Warsaw International Mechanism (WIM) and the Santiago Network. Collectively, these three frameworks create a vital architecture that empowers developing countries to address Loss and Damage. While WIM and the Santiago Network are not financial entities, they play crucial roles in coordinating technical support and capacity building. Their interconnectedness will be pivotal in shaping the conversations at COP29 in Baku, Azerbaijan.
Established in 2013, WIM serves as an overarching framework from which both the Santiago Network and the Loss and Damage Fund were developed. Its role as a conceptual umbrella has driven technical studies in five essential L&D areas: slow-onset climate events, non-economic losses, comprehensive risk management, displacement, and action and support. These studies have facilitated the development of various methodologies and guidelines, allowing the implementation of community-led projects across diverse ecosystems.
These technical studies have significantly enhanced the capacities of participating countries, helping to differentiate L&D from adaptation and demonstrating how current climate science can inform relevant policymaking. This body of research has also initiated a process of distinguishing L&D from adaptation to create a dedicated financing stream under the UN Framework Convention on Climate Change.
However, Pakistan’s weak technical capacity and insufficient coordination between the Ministry of Foreign Affairs, which represents Pakistan in the WIM Executive Committee, and the Ministry of Climate Change (MOCC), which represents the country in the Santiago Network, have hampered effective engagement. Consequently, climate and other sectoral policies, such as the Nationally Determined Contributions and National Adaptation Plan, lack integration with these five critical areas of L&D action. Pakistan’s absence from technical discussions has resulted in missed opportunities to strengthen national capacity.
The Santiago Network, launched under the WIM in 2019, aims to provide essential technical assistance to vulnerable countries, including Pakistan. Its mission is to connect nations with relevant organizations, networks, and experts for comprehensive support. Although it is still working to scale up its operations since becoming operational in 2022, the network plays a crucial role in aiding countries to cope with adverse climate impacts through targeted technical assistance and capacity building. As these efforts evolve, the network’s importance will grow, enabling countries to effectively access and utilize financial support from the LDF.
The review process for WIM has been contentious since COP24, with ongoing debates regarding governance structures, hindering significant advancements toward a long-term vision. The discussions at COP28 in Dubai represented a pivotal moment for climate finance mechanisms. During this summit, conversations revolved around the need for greater integration between the Santiago Network and the LDF to ensure seamless transitions from technical to financial support. Notably, Pakistan secured representation on the governance structures for both the LDF and the Santiago Network, represented by the author at the LDF and the secretary of the climate ministry at the Santiago Network. However, frequent officer postings and transfers within the MOCC have further complicated Pakistan’s participation in the Santiago Network.
The tripartite structure encompassing the WIM, Santiago Network, and LDF provides a comprehensive approach to addressing climate vulnerabilities. This synergy fosters policy coherence at both national and international levels, allowing countries to align their climate strategies and maximize support across all three mechanisms. As these frameworks mature, they have the potential to connect those most affected by climate change with the resources they urgently need.
As COP29 approaches, discussions regarding the interplay between these three mechanisms will take center stage. Anticipated topics include establishing clear criteria for accessing support and ensuring transparency in decision-making processes. A strong emphasis on integrating these mechanisms will be essential for enhancing the WIM’s capacity to offer strategic guidance to the other two, maximizing their collective impact. This integration could entail creating streamlined processes for nations to access technical assistance via the Santiago Network in tandem with financial aid from the LDF.
Additionally, discussions are likely to focus on expanding the Santiago Network’s partnerships and diversifying funding sources for the LDF. Attention may also turn to addressing non-economic losses and damages, including cultural and biodiversity losses. Furthermore, ensuring that L&D finance is incorporated into the New Collective Quantified Goals (NCQGs) will be a critical aspect of these discussions, although developed countries have so far resisted including specific L&D financing targets in the NCQG framework.
As the impacts of climate change intensify, the global community’s ability to operationalize and harmonize these mechanisms will be vital. The upcoming discussions at COP29 in Baku will be crucial in determining the future of climate finance for Loss and Damage. The effectiveness of these frameworks in delivering timely, efficient, and comprehensive support to those on the frontlines of climate change will serve as a litmus test for global solidarity and commitment.
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