Ten years have elapsed since the adoption of the landmark Paris Agreement, yet the escalating climate crisis relentlessly exacerbates hardships for the world’s most vulnerable nations. In recognition of this profound inequity, the international community, most notably at COP27 in 2022, agreed to establish the Loss and Damage Fund—an initiative designed to provide financial redress to countries disproportionately bearing the brunt of climate-induced disasters. Nevertheless, as the fund enters its formative years, critical questions persist regarding its operational effectiveness, equitable distribution of resources, and the meaningful participation of affected countries in shaping its ongoing trajectory.
The genesis of the Loss and Damage Fund is rooted in decades of persistent advocacy chiefly led by developing nations whose very existence hangs in the balance of climate change’s devastating effects. COP27, convened in Sharm El Sheikh, Egypt, marked a pivotal moment when negotiators brokered a historic agreement to formalise this fund. For many, it symbolizes a milestone towards climate justice, acknowledging that beyond mitigation and adaptation, vulnerable countries suffer irreversible losses from the relentless onslaught of extreme weather events and slow-onset challenges such as sea-level rise, glacial melt, and desertification.
By mid-2025, the Loss and Damage Fund had attracted pledges totaling approximately $768.4 million from a coalition of nation-states and international entities. While this represents a commendable initial commitment, the real test lies in the accessibility and disbursement of these funds. Reports have increasingly highlighted bureaucratic and procedural impediments that undermine the fund’s operational promise, disproportionately affecting smaller, less resourced countries such as island states and the least developed countries (LDCs). Despite the fund’s establishment, nations at the climate crisis’s frontline, exemplified by Bangladesh, have yet to receive meaningful financial assistance proportional to the scale of their climate-induced damages.
Bangladesh stands as a poignant example of the challenges confronting countries within the Climate Vulnerable Forum (CVF). Subjected to frequent and increasingly severe cyclones, floods, and riverbank erosion, the nation bears a heavy human and economic toll. Entire communities have been displaced, agricultural productivity has plummeted, and social fabrics have frayed. International organizations and non-governmental bodies have offered some relief, yet these efforts remain fragmented and insufficient. For example, a recent modest deployment of $893,420 targeted the non-economic losses in Bangladeshi communities—addressing intangible damages such as the erosion of cultural heritage and the destruction of communal cohesion—underscoring the complexity and nuance of climate losses that exceed mere financial accounting.
Other members of the Climate Vulnerable Forum, including the Philippines, Maldives, and Mozambique, have voiced comparable frustrations in accessing funds swiftly and at scale. These countries continue to grapple with catastrophe remnants, from typhoons to rising seas, and the protracted recovery efforts highlight profound gaps in the speed and adequacy of support. Many communities are still awaiting compensation, even as their vulnerability deepens with every passing year.
The Loss and Damage Fund is intended to be a vital mechanism for providing both immediate and long-term relief. It aims to offer financial assistance to cover costs associated with irreversible environmental and societal damage caused by climate change—damage that falls outside the scope of adaptation efforts. The fund’s resources will primarily assist developing countries that have contributed least to global greenhouse gas emissions but suffer disproportionately from the consequences. These funds are expected to be utilized for a range of purposes, including rehabilitation of affected communities, restoration of livelihoods lost to climate disasters, and recovery of cultural and societal heritage damaged by the impacts. Furthermore, it will provide compensation for losses that cannot be easily quantified financially, such as displacement, loss of biodiversity, and the mental health burdens borne by affected populations. The principal recipients of this fund include small island developing states, least developed countries, and other low-income nations within the CVF that are exceptionally vulnerable to climate-induced disruptions. These regions often lack the financial resources and institutional capacities to cope adequately with recurrent disasters and chronic environmental degradation. Consequently, the fund is envisioned not merely as a financial instrument but as a form of climate reparations, designed to empower affected countries to rebuild and adapt within their specific contexts whilst recognizing their unique vulnerabilities.
Bangladesh, in particular, stands to derive significant benefits from the Loss and Damage Fund due to its chronic exposure to climate hazards. Financial support from the fund could help the country undertake large-scale rehabilitation projects in severely affected coastal and riverine areas that experience frequent flooding and erosion. It would facilitate the strengthening of local infrastructure to withstand cyclones and rising tides, thereby reducing displacement and loss of life. Moreover, the fund could enable Bangladesh to invest in community-level resilience strategies that incorporate traditional knowledge and address cultural and social losses alongside economic damages. Compared to some smaller island nations like the Maldives, which face existential threats from sea-level rise, Bangladesh’s challenges are characterized by both rapid-onset disasters and slow-onset environmental degradation, necessitating a versatile and nuanced approach to fund utilization. Bangladesh’s comparatively larger population also means that funds must be judiciously managed to reach diverse and widespread communities, from urban slums to remote rural areas. Lessons from the Maldives’ efforts in managing climate relocation and ecosystem restoration may offer valuable frameworks for Bangladesh to optimize its use of financial resources. Thus, the fund’s flexibility must encompass diverse national contexts within the Climate Vulnerable Forum, allowing Bangladesh and others to tailor interventions in accordance with their unique vulnerabilities and capacities.
With COP30 scheduled to convene in Belém, Brazil, it is incumbent upon these affected countries to take concerted, strategic action ensuring that the Loss and Damage Fund not only survives but thrives as an instrument of justice and restoration. In this critical next phase, several key measures are paramount.
Affected nations must insist upon explicit, transparent guidelines for fund management. This entails developing rigorous protocols for allocation, rigorous monitoring frameworks, and accountability mechanisms that curb delays, ensure rapid deployment, and guarantee that funds reach the individuals and communities most in need without excessive bureaucratic barriers. By fostering deeper collaboration amongst neighboring states confronting similar climate threats, countries can pool knowledge, share best practices on fund utilization, and amplify their collective voice on the global stage. Regional alliances present a formidable platform from which to campaign for fairer, needs-based distribution policies that recognize shared vulnerabilities and priorities. Active and ongoing participation in global climate negotiations and multilateral forums remains vital. Defining narratives, voicing lived realities, and influencing procedural decisions around the Loss and Damage Fund form the bedrock of shaping its mandate, scope, and future financing architecture. Empowered diplomatic presence is crucial for maintaining the fund’s momentum and relevance. Investing in strengthening local institutions, governance frameworks, and community-based mechanisms enhances the fund’s overall effectiveness. Tailoring interventions to local contexts ensures that support is sustainable, culturally sensitive, and capable of addressing both immediate damages and long-term resilience building.
The establishment of the Loss and Damage Fund signifies an unprecedented advancement in international climate policy, recognizing the profound responsibilities owed to those bearing the consequences of global emissions they did little to cause. Yet this achievement is merely the initial step; the future success of the fund is inexorably linked to the unwavering commitment and proactive engagement of climate vulnerable countries themselves. As COP30 approaches in Brazil, the imperative for united advocacy by Bangladesh and fellow CVF members cannot be overstated. Only through resolute, transparent, and equitable fund management can the global community begin to redress the losses endured by those most affected and chart a more just, resilient path forward amid the escalating climate emergency.
- Asaduzzaman Shamrat, Senior Journalist and climate Activist
