Umbrella Group

Loss and Damage Funds are financial mechanisms designed to help developing countries cope with the economic and non-economic impacts of climate change that cannot be prevented through mitigation or adaptation. These funds are vital for nations most vulnerable to climate disasters, such as small island states, which experience the worst effects of rising sea levels, extreme weather, and ecosystem degradation.

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At COP27 and COP28, Umbrella Group nations supported discussions on the Loss and Damage Fund but stressed the importance of clearly defining financial responsibilities and ensuring robust management structures. The group advocates for expanding the donor base to include emerging economies, rather than solely relying on developed nations for contributions. This reflects their broader concern about maintaining economic stability while addressing climate challenges through market-based solutions like carbon pricing. While some Umbrella Group members have made voluntary contributions, they remain cautious about the potential long-term financial and legal commitments tied to the fund.

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The position on the Loss and Damage Funds reflects the Umbrella group’s realist approach as they prioritize their economic interest. Yet, it also incorporates principles of neoliberal institutionalism by emphasizing the need for international cooperation, particularly through expanding the donor base to include more countries.

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