By Jeremy Wetterwald, IMPACT Initiatives, Switzerland

In 2024, efforts to operationalize a Loss and Damage support architecture led to the establishment of the Santiago Network for Loss and Damage and the Fund for Responding to Loss and Damage. While there are ongoing discussions occurring on the modalities and priorities of these two bodies, the importance of grounding relevant discussions, decisions and action in science and evidence is critical, especially given the significant gap between estimated needs and available finance. As of December 2024, the Fund has mobilized a bit more than 700m USD, when yearly needs are estimated between 290bn and 580bn[1]. The allocation decisions of scarce resources against massive gaps will be complex and will have to be:

1. Transparent and open, to ensure funds are going where they are most needed and not where it is least challenging to disburse
2. Aligned with priorities defined by communities experiencing the most severe forms of economic and non-economic loss and damage
3. Grounded in evidence of interventions that result in the best outcomes for affected populations

Allocating scarce resources is something that the humanitarian sector is also confronted with. In 2023, the total amount of international humanitarian assistance reached around 50bn USD (46.3bn USD) with about 60% of humanitarian needs remaining unmet[2]. While the gap is not as large in comparison to the one between loss and damage faced by communities and relevant financial commitments, there are several elements of humanitarian assistance planning that can be applied to loss and damage funding operationalization.

In 2016, the Humanitarian System established the Grand Bargain to address growing financial gaps between humanitarian needs and available financing. One of its workstreams focused on improving ‘joint and impartial needs assessment’. Commitment to this objective allowed the humanitarian system to significantly increase its capacity to generate, analyse, use and store data. Today, the humanitarian planning cycle produces regular humanitarian needs overviews and response plans (HNORPs) based on coordinated needs assessments.

Since 2016, IMPACT Initiatives via its REACH initiative has been working closely with the United Nations Humanitarian Coordination to deploy Multi-Sectoral Needs Assessments (MSNAs): nationwide, statistically representative household surveys covering all crisis-affected groups, which allow to better understand what the critical needs are (shelter, water, food), where are those needs most salient, and who are the most severely affected populations.

There are several interesting similarities between humanitarian planning and emerging loss and damage planning. First, there is a complex country prioritisation decision. While there are increasing efforts to distribute resources based on the needs, allocations are decided based on geopolitical priorities. Loss and damage funding should focus on countries that are experiencing the most severe forms of climate change impacts. There are several global indexes that can be used to inform those discussions (JRC climate change INFORM, ND-Gain), allowing for a prioritisation based on country vulnerability. The second action is urgent and time-sensitive. The right support needs to reach the right people at the right time. One lesson learned from the humanitarian sector in the last ten years is that unconditional cash transfers tend to have high levels of impact as they enable decision-making at the lowest possible level: households or individuals. Organisations such as Give Directly are sharing principles for cash transfers for loss and damage action, and the humanitarian actors, with their experience in identifying needs and vulnerabilities, can support effective targeting of support to the right people. Finally, there is a need to invest in what works best based on priorities defined by affected people. Understanding the impact of loss and damage funding will be important to ensure that scarce resources are going towards solutions that meet the priorities of communities and help them effectively avert, minimise and address climate impacts.

In conclusion, as climate change threatens to multiply the needs of people affected by crises all over the world, the experience of the humanitarian system to generate and use data to inform resource allocation can be leveraged specifically to: i) understand the impacts of extreme events and slow-onset processes (using remote sensing and rapid needs assessments) ii) understand the recovery priorities of communities and iii) understand the result of loss and damage interventions. Fully leveraging this potential will be key to developing more solid and effective Loss and Damage responses.

[1] Unpacking finance for Loss and Damage | Heinrich Böll Stiftung | Washington, DC Office – USA, Canada, Global Dialogue

[2] Fighting Humanitarian Funding Gap 2024

Disclaimer: The views expressed in this piece are those of the author/s and do not necessarily reflect the views or policies of AIDMI.