The United Nations Conference of Parties (COP27) in Sharm El-Sheikh, Egypt, closed on November 20, 2022, with a breakthrough agreement to provide loss and damage (L&D) funding for vulnerable countries hit hard by climate disasters. COP27 also made progress on adaptation, improving resilience among the most vulnerable populations to the adverse impacts of climate change. During COP27, L&D was negotiated separately from adaptation since the role of developed countries is limited to serving as donors and capacity builders, while developing countries are responsible for minimizing their vulnerability.
UN Climate Change reported that new pledges and contributions, totaling more than USD 243 million, were made to the Adaptation Fund. Since 2010, the Adaptation Fund has committed nearly USD 1 billion to adaptation and resilience programs. However, there remains a severe gap between raised funding and demand costs. The projected economic cost of L&D by 2030 alone is estimated to be USD 400 billion a year. According to the 2022 United Nations Environment Programme Adaptation Gap Report, the estimated annual adaptation needs/costs are USD 160-340 billion by 2030 and USD 315-565 billion by 2050. If we consider L&D and adaptation costs together, developed countries need to be prepared to contribute at least USD 560 billion every year by 2030. This is over five times more than these countries’ climate finance pledge of USD 100 billion.
How to Finance L&D in Divested Communities
No one can deny the necessity of compensating for L&D. However, the reality is a limited commitment to paying for it at the required scale. Therefore, the immediate and urgent task is to find practical and additive ways to finance L&D in disinvested communities. Let us momentarily set aside the need for additional international negotiations to close the cost gap identified in the contributions of developed countries.
We must then examine this critical scenario: With limited governmental funding sources, how do we effectively reduce L&D and save millions of lives and properties immediately? There are underlying questions we need to answer and address that can help us address the larger cost gap issue. Some of these include:
- Can we build houses that are affordable and resistant to flooding?
- Can we create decentralized reserve freshwater sources buffering the risk of seawater levels rising and intruding in upstream drinking water sources?
- Can we create a community-based quick response and rescue system that enables people to evacuate from lowland flooding or wildfires?
- Can we grow food through better agriculture practices to increase food security?
- Can we upgrade critical infrastructure to be resilient enough to maintain essential functionality to support people’s basic needs during climate disasters?
If we have the capability to proactively take action in areas such as these, we only need to ask if the solutions are affordable and sustainable.
Creating Resilient Communities
At the Institute for Sustainable Communities (ISC), we believe adaptation work can reduce a large portion of avoidable L&D, thereby leaving unavoidable L&D, that which could not be mitigated by any preventive actions, to insurance and compensation. Community-based approaches are becoming increasingly widespread in climate adaptation initiatives globally. In 2022, creating climate-resilient communities was a big theme, highlighted at COP27 through the Resilience Hub. Race to Resilience, a global campaign to accelerate the investment and implementation of adaptation solutions, has increased actions and investments to support 4 billion vulnerable people and communities. Resilient community programs are dealing with natural disasters, promoting sustainable agriculture, ensuring water and food security, developing resilient livelihood solutions in climate-vulnerable communities, and empowering innovation in developing climate-equitable, resource-efficient, cost-effective, and sustainable responses to climate risks through better coordination of the actors and enablers.
Motivated by the urgency for accelerating climate action on the ground, ISC strives to mobilize resources and scale actions at the subnational and local levels. We work in the US, India, China, and Southeast Asia to empower local leaders and communities to take action to mitigate the effects of climate change to save future costs and lives.
- In the US, the Partnership for Resilient Communities (PRC) works with 14 community-based organizations (CBOs) to transform the national, urban climate resilience field by increasing the number of leaders of color in the urban field of practice, advancing approaches that build the resilience of people and places through influence-building and policy approaches, community education, and engagement, and the installation of clean energy and green infrastructure.
- In India, the Women + Water Alliance program engaged over 3000 cotton farmers in Maharashtra and Madhya Pradesh, reducing the environmental footprint of cotton cultivation, enhancing the sustainability of water resources, and empowering women to enhance their role in sustainable farming.
- In China, we partnered with three cities, Guangzhou, Changsha, and Tianjin, to implement the Deep Decarbonization and Equitable Long-Term Strategies Alliance program (China DELTA). China DELTA provides local governing bodies and community leaders with the skills and experience to identify, prioritize, plan for, and implement decarbonization strategies over the short- and long-term, as well as conduct social impact analysis to help more cities multiply climate benefits by increasing their social well-being.
- In 2020, ISC established the Mekong Sustainable Manufacturing Alliance (The Alliance), which employs a multi-pronged strategy to engage with local factories in Cambodia, Thailand, and Vietnam to support continuous improvement and sustainability. The Alliance engages with multinational brands to support ESG improvements that unlock sustainable financing, economic growth, and self-reliance, which leads to worker health and safety and more stable and resilient communities.
ISC leads the way in creating a bottom-up approach by empowering CBOs to build resilient communities and ensure that everyone benefits from carbon-neutral transformation, reducing the risk of climate L&D.
The long-term goal is clear: make a 1.5º world possible and reduce climate vulnerability for 4 billion people. We continue to expand our grassroots work to demonstrate what is possible when we support hundreds of resilient communities that implement affordable, sustainable, and collective solutions, leading to a significant reduction in L&D and saving the future of our planet.
 UN Climate Change Press Release on Nov. 20, 2022: COP27 Reaches Breakthrough Agreement on New “Loss and a Damage” Fund for Vulnerable Countries.
 Understanding Loss and Damage. EU Parliament. 2022.
 Adaptation Fund press release on Nov. 15, 2022: Adaptation Fund Receives Over US $243 Million Mobilized in 2022 for the Most Climate-Vulnerable at COP27 in Egypt.
 UNEP: Adaptation Gap Report 2022. https://www.unep.org/resources/adaptation-gap-report-2022
 Shammin, M.R., Haque, A.K.E., Faisal, I.M. (2022). A Framework for Climate Resilient Community-Based Adaptation. In: Haque, A.K.E., Mukhopadhyay, P., Nepal, M., Shammin, M.R. (eds) Climate Change and Community Resilience. Springer, Singapore. https://doi.org/10.1007/978-981-16-0680-9_2