At COP27, parties decided to set up and establish a new Loss and Damage Fund and tasked a Transitional Committee with the technical work to develop the Fund’s modalities and also to address broader funding arrangements to respond to loss and damage. 

The Fund, once established, should become the central player in an emerging loss and damage finance landscape to support developing countries on the front lines of the climate crisis already facing loss and damage. But what is required to deliver a fit-for-purpose Loss and Damage Fund?

This mapping study, a collaboration between the Loss and Damage Collaboration and the Heinrich-Böll-Stiftung Washington, DC, lays out the core principles that should guide the development of the new Loss and Damage Fund and its operational modalities. It also looks at the scale of the resources needed; analyses potential alternative sources of finance —including taxes and levies imposed on polluting industries— and provides recommendations to guide the work of the Transitional Committee throughout 2023.