Why civil society is crucial for the success of the loss and damage fund

Photo caption: Global Director of the BudgIT, Oluseun Onigbinde

By Oluseun Onigbinde

The conclusion of COP28 marked a significant milestone in global climate action, with the formal establishment of the Loss and Damage Fund (LDF). This fund, designed to assist developing countries in addressing the adverse effects of climate change, has gained momentum, especially with the World Bank stepping in as the interim trustee. While a step forward, the commitment of $661 million at COP28 remains a mere fraction of the resources needed to combat the vast and growing challenges faced by vulnerable nations.

This underfunding raises concerns about the effectiveness and reach of the LDF. The real risk is that much of this funding will not reach those most in need. Moreover, while the distribution of these funds are expected to begin later this year, there is critical need for inclusive monitoring and accountability mechanisms. Historically, funds intended for climate resilience and disaster recovery have often failed to reach the people who need them most. The integration of social accountability and the active involvement of civil society could ensure that the most vulnerable and affected populations truly benefit from these funds.

Civil society is crucial in bridging the gap between fund allocation and actual impact. These organisations are often closest to the communities affected by climate change and possess a deep understanding of local needs and challenges. By involving civil society in the LDF framework, we can enhance the fund's responsiveness and ensure that resources are directed towards the most vulnerable populations. Civil society organisations (CSOs) can provide valuable insights into the ground realities, advocate for the rights of affected communities, and hold authorities accountable for the proper utilisation of funds. Their involvement can help build trust among local populations and ensure that the LDF is not just another bureaucratic exercise but a genuine tool for climate justice.

Building Trust Among Local Populations

There are significant opportunities in building a more inclusive, transparent, and accountable framework for the LDF. One such opportunity lies in fostering wider conversations about the Fund's utilisation particularly in defining who qualifies as the most vulnerable and how they can be directly supported. This requires a participatory approach where the voices of affected communities and civil society are integral to decision-making processes. Additionally, the framework should ensure that states do not perceive the LDF as merely another income line but as a crucial resource for aiding impacted populations. This can be achieved by establishing clear guidelines and accountability measures that prioritise the needs of those most affected by climate change.

Another opportunity lies in advancing localisation by incorporating local organisations into the funding framework. Local CSOs, being in proximity to the crisis, are often best positioned to respond quickly and effectively. By ensuring that local organisations have access to technical and financial resources to demand equity and accountability, the LDF can ensure that aid reaches affected populations faster and address specific needs of communities. This approach not only enhances the efficiency of fund utilisation but also empowers local entities, fostering resilience and self-sufficiency in the long run.

Integrating Voices of National Stakeholders

The World Bank and the LDF have a unique chance to demonstrate a nimble and inclusive approach that integrates the voices of multiple stakeholders in their operations. This is a critical moment for them to set a precedent in climate fund management by ensuring that social accountability is at the core of their strategy. They should actively engage civil society in the monitoring and evaluation processes, create transparent reporting mechanisms, and encourage feedback from affected communities. This will not only enhance the legitimacy and effectiveness of LDF but also build a robust model for future climate finance initiatives.

Ultimately, the integration of social accountability and the involvement of civil society is paramount for the success of the Loss and Damage Fund. The World Bank and other stakeholders must seize this opportunity to create an inclusive, transparent, and accountable framework that genuinely serves the needs of the most vulnerable. By doing so, they can transform the LDF into a powerful instrument of climate justice, ensuring that the voices of those most affected by climate change are heard and that they receive the support they urgently need. This paradigm shift in climate fund management is not just desirable but essential for building a resilient and equitable future for all.

The Author is the Global Director of the BudgIT, a civic organisation focused on citizen participation, transparency, and institutional accountability.