Climate expert Dipak Dasgupta guest at Explained Live today

To be meaningful, the loss and damage fund would need large amounts of money flowing in. The financial needs of developing countries to fund reconstruction activities after being hit by climate disasters runs into tens of billions of dollars every year.

The developed countries have not yet delivered on their promise to mobilise $100 billion every year from 2020.

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The decision to create a loss and damage fund is being seen as a landmark outcome from the COP27 climate change meeting that ended in Sharm el-Sheikh last month. While the creation of the new fund certainly addressed the long-pending demand of the developing countries, it is, as of now, nothing more than getting a foot in the door to keep it open.

To be meaningful, the loss and damage fund would need large amounts of money flowing in. The financial needs of developing countries to fund reconstruction activities after being hit by climate disasters runs into tens of billions of dollars every year. As of now, the loss and damage fund is an empty box. There isn’t even a commitment to provide money. And even commitments have not been kept.

The developed countries have not yet delivered on their promise to mobilise $100 billion every year from 2020.

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In a way, a more consequential outcome of COP27 could be the call to reform and restructure global financial institutions to align their priorities with the climate goal of keeping temperature rise below 2 degrees Celsius from pre-industrial times. The gap between demand and supply of climate finance is so huge that without the greening of entire financial flows, it would be impossible to meet the climate goals.

The final agreement from Sharm-el Sheikh, for the first time, quantified the financial requirements for climate action. About $4 trillion was needed only for the renewable energy sector until 2030 if the 2050 global net zero target was to be achieved. An additional $4-6 trillion was required every year for global transformation to a low-carbon economy. About $5.9 trillion was needed by developing countries in the pre-2030 period to implement their climate action plans.

Some of these figures first appeared in a chapter in the 2022 Emissions Gap Report. This chapter was co-authored by Dipak Dasgupta, a Distinguished Fellow at Delhi-based The Energy and Resources Institute, and our guest at the Explained Live event on Wednesday evening. He will be in conversation with Amitabh Sinha.

A former principal economic adviser to the Government of India, Dasgupta has been a climate negotiator and one of the main authors of the investment and finance chapter in IPCC’s sixth assessment report. Dasgupta will talk about the ways to bridge the finance gap, where the money will come from, and importantly, whether the burden would eventually fall on the common citizens in the form of carbon taxes.