The 27th Conference of the Parties (COP27) to the United Nations Framework Convention on Climate Change (UNFCCC) established a fund to respond to loss and damage (L&D), with the goal of supporting particularly vulnerable developing countries. Parties agreed that the Fund for Responding to L&D (FRLD) would be housed within the World Bank for at least four years, upon the approval of its governing instrument. Additionally, the COP28 decision created a Board (the Board) and an independent secretariat for the FRLD. At COP29, the World Bank signed a hosted agreement to fully operationalize the FRLD.

The Paris Agreement addresses L&D in Article 8, outlining various areas for cooperation and facilitation that, among others, include: early warning systems (EWS); emergency preparedness; slow-onset events (e.g., sea level rise); non-economic losses; and resilience of livelihoods. However, L&D is not explicitly defined—nor is there a universally accepted definition of equity—within international law or the UNFCCC.

The FRLD will begin dispersing funds for addressing L&D in 2025. The Board and Parties will need to consider equity in calling for donors and distributing L&D finance to recipients. This paper explores how the Board and Parties can ensure equitable L&D finance distribution. Options could include: a proposed equity framework; support mechanisms or a constituted body for Least Developed Countries (LDCs) and/or Small Island Developing States (SIDS); an informal process under the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement (CMA), such as a workshop; or an expert group under the Warsaw International Mechanism (WIM).

Questions for Consideration

• How can Parties be guided in assessing equity as it relates to both stating needs and determining the level of support for L&D?
• Should Parties support the development of additional guidance regarding donors and recipients for L&D finance to facilitate Board decisions?
• Would an equity framework benefit the FRLD?