UPSC Prelims Marathon Quiz

Statement 1 is correct. The United Nation’s COP27 climate summit recently approved the creation of the “Loss and Damage” Fund.

The Loss and Damage Fund is a special fund established to provide compensation to vulnerable countries for the damages they suffered because of global warming. Its aim is to unlock a greater ambition to mitigate and adapt to climate change.

“Loss and Damage” is the term that is used to refer to the cost being incurred from climate-induced weather extremes or impacts like rising sea levels.

Till date, climate funding mostly focused on reducing carbon dioxide emissions and addressing global warming. A third of this funding supported communities to adapt to climate change consequences.

The “Loss and Damage” funding is different since it covers the cost of damages caused by climate crisis that the countries cannot escape from or adapt to.

“Loss and Damage” is the term that is used to refer to the cost being incurred from climate-induced weather extremes or impacts like rising sea levels.

According to reports by 55 vulnerable countries, their combined climate-linked losses over the past 20 years is 525 billion USD or 20 per cent of their collective GDP. According to several studies, these losses are expected to reach 580 billion per annum by 2030.

At the COP27, an agreement was signed to help developing countries that are “particularly vulnerable” to the effects of climate change. It is not managed and backed by the World Bank. Hence, statement 2 is incorrect.