What is Loss and damage fund?

About Loss and Damage Fund (LDF):

• LDF was established at the 2022 UNFCCC Conference (COP27) in Egypt.
• Purpose: To provide financial support to regions suffering both economic and non-economic losses caused by climate change.
• Economic loss and damage are negative impacts that one can assign a monetary value to. These are things such as the costs of rebuilding infrastructure that has been damaged due to a flood, or the loss of revenue from agricultural crops that were destroyed due to drought.
• Non-economic loss and damage are negative impacts where it is difficult or infeasible to assign a monetary value. These are things such as trauma from experiencing a tropical cyclone, loss of community due to displacement of people, or loss of biodiversity,”
• It was designed to provide crucial support to vulnerable nations facing the brunt of climate-related challenges. 
• The LDF is overseen by a Governing Board that determines how the fund’s resources are disbursed, with the World Bank serving as the interim trustee tasked with hosting the fund for four years.
• Financial support will be provided in the form of grants, concessional financing that can be utilized by any eligible country. 
• The fund encourages voluntary contributions from developed countries but invites developing countries to contribute to it too.

Q1: What is the United Nations Framework Convention on Climate Change (UNFCCC)?

The United Nations Framework Convention on Climate Change (UNFCCC) is a treaty that establishes the legal framework for international cooperation on climate change. The UNFCCC's goal is to stabilize greenhouse gas concentrations in the atmosphere to prevent dangerous human interference with the climate system.

Source: Can Kerala access funds from the Loss and Damage Fund? | Explained