The Fund for Responding to Loss and Damage, established by the United Nations, has for the first time allocated funding to a country, agreeing to provide 20 million USD to Nepal following severe flooding. The move marks an important step in global efforts to tackle climate change and offers some proof of the fund’s credibility.
However, alongside this positive development, concerns persist over delays in climate action. Agreed at COP27 in 2022, the fund was widely hailed as a historic achievement and a victory for developing countries, which had long called for compensation as victims of climate change while having contributed very little to global emissions.
Four years after it was agreed, the fund still faces concerns over its funding.
The first issue is the limited scale of pledges to the fund. To date, total pledges amount to just 822 million USD, a drop in the ocean compared with the goal of at least 300 billion USD a year by 2035 set by developed countries at COP29.
The second issue is that critics say the disbursement process is too slow to meet urgent needs after disasters. So far, the fund has not disbursed any assistance. Even the 20 million USD allocated to Nepal has only been earmarked, not disbursed. To receive the funding, Nepal must submit a detailed project proposal for consideration and approval by the fund’s board.
These realities highlight the wide gap between pledges to share the financial burden of climate action and their implementation.
The green transition and climate adaptation are like a machine, and finance is the fuel that keeps it running. For developing countries, every kind of climate action, from building climate-resilient infrastructure and protecting communities from climate risks to pursuing the green transition, requires substantial investment. Meanwhile, developed countries face difficult choices between their national economic interests and their responsibilities to the international community.
Global climate diplomacy has also been hit by the US withdrawal from the Paris Agreement. The absence of major players and delays in climate finance disbursement have eroded trust and weakened multilateral climate negotiations.
Another issue attracting attention at COP31 is the acceleration of electrification. Turkey has put forward a “35x35” electrification goal, which aims to raise electricity’s share of global energy demand to 35% by 2035. This would be achieved by replacing equipment that directly burns fossil fuels, such as gas heating systems and diesel vehicles, with electric alternatives.
However, the fundamental challenge is that electrification cuts emissions only if the electricity comes from renewable sources. Meanwhile, the path to phasing out fossil fuels remains long and difficult, as economic and geopolitical interests continue to hold back the green transition.
The United Nations Environment Programme (UNEP) has warned that limiting global warming to 1.5°C is no longer achievable, owing to decades of insufficient climate action.
Global climate commitments are already in place, but turning words into action requires political will and adequate funding. Concrete action and measurable results will be the true test of whether countries take their responsibility to humanity’s shared future seriously.
