[OPINION] The anatomy of loss and damage finance, the Philippine perspective

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'Highly-vulnerable nations should not be deprived of their right to development by being even more indebted to big polluters.' Opinion COP27

Arguably the most critical issue heading into the November climate negotiations in Egypt is the establishment of a financial mechanism to avert or minimize loss and damage . Developing countries pushed for its creation in last year’s summit in Glasgow, yet this was rejected by developed nations that would be providing said funds.

What must be at the heart of its functions is the “polluter pays” principle, referring to developed countries and fossil fuel corporations compensating victims of extreme climate change impacts due to their greenhouse gas emissions that caused this crisis. This concept is an important part of climate justice as recognized in longstanding and recent policy frameworks at the global and national levels, such as the National Inquiry on Climate Change by the Philippine Commission on Human Rights.

This forms the basis for why a L&D facility must disburse financing in the form of grants instead of loans. This would prevent recipient developing nations from being burdened with higher economic costs from borrowing in the form of interests, among others. Lessons must be learned from the challenges vulnerable nations and communities faced with accessing available modes of climate finance.

At the same time, developing nations must be required to include in their proposals modalities that empower local stakeholders to make decisions on managing allotted funds for specific actions. This is to recognize the critical role of local actors in more efficiently addressing L&D, especially when it comes to non-economic losses.

 

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