Climate & environment, explained.
Crossing a river through Tuin, a traditional, manually operated river-crossing system used in rural Nepal, to reach from one part of the municipality to another after the bridge was swept away by the flood (Srijana Bhatta/UN Women)
Faster disbursement, not a bigger fund, is the fix that loss and damage finance actually needs.
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COP31: Rebuilding the Loss and Damage Fund for speedCOP31: Rebuilding the Loss and Damage Fund for speed
On 22 October, the world’s Fund for Responding to Loss and Damage took its most decisive step yet. At its first extraordinary virtual meeting, the board of the Fund set aside US$21.6 million for Nepal (Opens in new window), where a glacial flood in the Bhotekoshi valley on 26 August killed more than 1,500 people and left over 5,000 missing. After four years in which the Fund had approved nothing, this was a breakthrough.
But it took 57 days, and the money has still not moved. Nepal’s proposal is only now being drafted (Opens in new window), with a first version due this month. No implementing organisation has been chosen because Nepal cannot apply directly. By the time the board next meets, in Manila on 15 December, the flood will be 111 days old and the set-aside may still be only a set-aside.
That is the Fund at its best. Its normal pace is slower.
Since its creation at COP27 in 2022, it has spent years building governance arrangements, opening a funding window and debating how support should reach recipient countries. In July, the Board deferred its first package of four grants, worth US$77.4 million, until December. Its target for disbursing start-up finance slipped from mid-2026 to year’s end.
Those who did least to heat the planet should not bear the cost of the damage, and the Fund is far too small.
The Fund is short of money, but it also has a delivery problem. It has US$822 million pledged (Opens in new window) and about US$450 million paid in, against 176 requests worth about US$2.8 billion (Opens in new window). The US$342 million reserved for the first round covers roughly one-eighth of what countries requested. A peer-reviewed estimate puts annual needs near US$400 billion (Opens in new window). Yet the body allocating this scarce finance has 26 members, meets about three times a year, decides by consensus and appraises requests one at a time.
The campaign to replenish the Fund is essential, but insufficient. Those who did least to heat the planet should not bear the cost of the damage, and the Fund is far too small. But more money alone will not remove governance bottlenecks created by board schedules, consensus and project-by-project appraisal. A fund ten times larger, built this way, could still make a flood wait for a quorum.
Faster models already exist. Jamaica’s regional risk pool and catastrophe bond were due to pay US$242 million within 16 days (Opens in new window) of Hurricane Melissa. Vanuatu’s regional insurer paid within 14 days (Opens in new window) of its 2024 earthquake. Neither decision was improvised after disaster struck. The rules, triggers and payment channels had been agreed in advance.
The Fund should learn from them. It does not need to manage every payment itself. Its role should be to pool finance, set common rules for triggers, tracking and audit, strengthen weaker national systems, and hold delivery partners to account. Different losses then require different responses. Pre-agreed triggers could release cash within days through risk pools, social protection systems and bodies such as the Pacific Resilience Facility (Opens in new window). Larger grants could support recovery and reconstruction over months. Multi-year programmes could address losses with no single disaster date, from prolonged drought to displacement and the gradual loss of a place. Our research in four countries (Opens in new window) suggests this longer-term work is where the Fund could add its most distinctive value.
Demonstrations calling for support to a loss and damage fund during COP28 in Dubai, United Arab Emirates (COP28/Christopher Pike)
Deadlines matter. Without them, speed remains an aspiration rather than a requirement. Rapid finance should reach countries within 14 days of a declared sudden-onset disaster, a pace regional pools already achieve, while recovery grants should be decided within about 90 days of a request. The Fund does not currently publish a clear measure of how long support takes to reach affected communities. That absence of accountability is part of the problem.
The problem is not the mandate. It can be read broadly, covering economic and non-economic losses from extreme events and slow-onset change, with a focus on residual needs that humanitarian assistance, adaptation finance and other arrangements do not adequately meet. The bigger question is whether the Fund is willing to work through channels that can move money quickly.
Australia and Canada matter here not as donors seeking credit, but as partners with long-standing obligations to climate-vulnerable countries in the Pacific and Caribbean. Their regional relationships offer practical examples for reform. Australia’s support for the island-owned Pacific Resilience Facility (Opens in new window) and the Canada-CARICOM Climate Adaptation Fund (Opens in new window) show how regional institutions can pool risk, subsidise access and release finance quickly. The lesson is not that these mechanisms should replace the Fund, but that it should capitalise, connect and scale up the bodies that already know how to deliver.
COP31 in Antalya is where that shift could begin. The immediate task is to accelerate FRLD delivery through pre-approved triggers, firm timelines and institutions that have already shown they can move money quickly. But a faster Fund is only half the answer. Australia, Canada and other partners should also press for a wider system in which the FRLD works with regional funds, risk pools, social protection programmes and national institutions under shared standards for access, accountability and results. The goal is not simply to make the FRLD faster, but to reposition it from a project fund into the coordinating hub of a broader loss and damage finance system.
The debate over loss and damage finance has focused on scale. The next phase must also focus on delivery. Accelerating the FRLD is essential, but no single fund can meet the full spectrum of climate losses. The larger task is to build a system in which global, regional and national institutions each do what they do best. Otherwise, the world may succeed in creating a loss and damage fund while failing to create a loss and damage finance system.
Disclosure: IDRC funded the research cited here, and Bhim Adhikari works there. The views are the authors’ own.
About the authors
Hemant Ojha
Hemant Ojha is an Associate Professor at the Australian National University, and also advises climate and development projects at the Institute for Study and Development Worldwide, Sydney.
Bhim Adhikari
Bhim Adhikari is a Senior Program Specialist at Canada’s International Development Research Centre.
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