‘We don’t want to pit adaptation and loss and damage funds against each other’: veteran COP observer

Although the timeline was pushed five years beyond the preferred target, and the pledge did not specify a concrete funding amount, adaptation finance jumped the agenda at this year’s talks, sidelining the fund for responding to loss and damage (FRLD), said Lidy Nacpil, coordinator of the Asian Peoples’ Movement on Debt and Development (APMDD), a regional alliance for people-centered development and economic and climate justice.

“The adaptation and the loss and damage funds are both equally urgent,” Nacpil said in the Eco-Business Podcast. “But there’s far less financial flow going to loss and damage. Part of that is an avoidance of any recognition of responsibility on the part of the Global North, that will make them legally liable [for loss and damage]. It’s a game we’ve been seeing for years.”

The adaptation fund, which was created in 2001 and began approving financing for projects in 2009, is aimed at supporting ways to prevent worsening storms, floods, droughts and fires. It has received almost US$1.7 billion in cumulative pledges mostly from European countries, as of the end of 2024.

The FRLD was borne out of decades of prolonged and difficult negotiations, with developing countries pushing for a dedicated mechanism to address climate impacts as they happen, and developed countries resisting binding commitments. The breakthrough came when the mechanism was established at COP27 and governments formally establishing the fund on the first day of COP28 in 2023.

Lidy Nacpil, coordinator of the Asian Peoples’ Movement on Debt and Development (APMDD). Image: Lidy Nacpil LinkedIn page 

Although seen as a major political and moral victory, the fund remains to face challenges in specifying sources and scale, with only US$768.4 million in pledges as of March this year.

COP30 opened with the FRLD board announcing that it would begin accepting applications starting 15 December this year, with the goal of disbursing funds by end-June 2026. While vulnerable nations and civil society groups welcomed the FRLD’s call for applications, they said the fund size remains woefully inadequate.

In this podcast, we spoke with Nacpil, a Filipino social justice activist who has attended 16 COPs, on what was supposed to be the last day of the conference, before it went into overtime.

She shared with us her assessment of this year’s conference, as well as what  the long road ahead will look like in accessing climate finance.

This transcript has been edited for clarity.

Tune in as we discuss:

• The need for a “quick release” fund for FRLD
• Why it’s more difficult to raise money for loss and damage than adaptation
• Why the Philippines doesn’t fall under priority group for disbursement
• How a public campaign must be launched to fill the funding gap
• Her hope for future COPs

What is your assessment of the COP30 so far, on its last day?

There were not many surprises. We have been monitoring and engaging in COPs for many years, and the usual issues that bog down negotiations were there, like the dynamics of the Global North on discussions that involve climate finance; talks around the fossil fuel phase out from adaptation; and other issues that involve markets being presented as one of the primary sources of finance. It was not surprising, but we had higher hopes that we would have a little bit more positive outcome, seeing that the presidency is with Brazil.

In the first day of COP 30, the board announced straight away that affected countries may begin applying for the initial US$250 million allocation for the FRLD. What is your view on this development, given that it’s really woefully underfunded as we know?

We really value the FRLD. It was finally created after many years of fighting and campaigning on our part to have such a fund. We are starting from a point that we really wanted to succeed but we have very serious concerns and critique about how it’s unfolding right now. It’s good that they’re at the point that they have announced that countries can start applying, but we have two major issues regarding this launching of what they call the BIM, the Barbados Implementation Modality.

As you mentioned, we’re starting with a very miserable situation of the fund, having such a small amount of money. Even though it had more than US$700 million in pledges, which again is already very small, only half has been delivered so far. Therefore, the funds available for this pilot phase is just a little over US$200 million, and that is already not even enough.

If one medium-sized country undergoes a major climate related disaster, the range of amounts needed for one project is already about US$5 million to US$20 million. Coming from our lived experience in the Philippines, that is really outrageous. 

The other issue, which is also equally as serious, is the modality of accessing the funds. We already expressed very strong resistance and opposition to this at the last board meeting in Manila when they made the final decision about it. This modality calls for you to apply for funding by submitting a project proposal, which will take at least several weeks, if not months, to get it through and acted on if it’s approved. That is really not the kind of response we need for loss and damage.

That may be possible for loss and damage from slow onset impacts. But what the world is experiencing today that is most dramatic is very sudden extreme weather events related to climate change. Anyone knows that the longer you deliver help, the worse the situation gets.

 We have been pushing for a more rapid response mechanism from the board. We know that several developing country board members felt very strongly about this but at the end of the day, that is the main modality for the pilot programme. The only thing that was added as colatilla to that decision was that, this may be the nature of the pilot programme, but the future longer term modality should not be limited to this kind of response.

Meanwhile, the Adaptation Fund had received almost US$1.7 billion in cumulative pledges as of end of 2024, and the Brazilian presidency is pushing hard for a tripling of adaptation finance by 2030. Do you think FRLD is getting sidelined by adaptation finance at this year’s COP?

I think it is remaining in this sideline situation not just because there’s a big call for adaptation finance, which we’re also supporting. We don’t want to pit adaptation and loss and damage against each other because these two key aspects of climate action are very urgent, especially since one debate around is about whether keeping the 1.5 °C ceiling is still a viable goal.

Scientists and civil society are discussing it. Even the UN Secretary-General himself has reminded just a few weeks ago in October that we are breaching it already.

In this situation, adaptation and addressing loss and damage are so urgent. We’re going to anticipate much more escalated impacts. We’re saying both are equally urgent, but as figures show, there’s very far less financial flows going to the loss and damage. Part of that is an avoidance of any recognition of responsibility that will make the Global North legally liable. It’s a game we’ve been seeing for years, this evasion of responsibility. They want to promote this notion of burden-sharing as a way of diffusing attention from the accountability that they should be subjected to the developed country parties.

Yes, it has been sidelined. I don’t think it’s because adaptation finance is receiving more attention because it should have more attention than before. [Loss and damage] is just simply a rather difficult area of debate on climate finance.

You’re saying that the funds aren’t going as much as it should for FRLD because developed nations don’t want to be liable for loss and damage. Isn’t it the same for adaptation? Won’t that also stop them from putting in more money into adaptation?

It’s a little harder for them to avoid that completely because adaptation is clearly mentioned as a responsibility in the framework convention on climate change.

During that time the framework convention was formulated, the idea of loss and damage was somehow subsumed into this call for adapting and building resilience. But now that the situation has gotten worse, it was very more difficult not to acknowledge that there will be unavoidable loss and damage no matter how much adaptation and building of resilience you do.

So that this concept that eventually emerged as a distinct climate response area. Because it’s in the framework convention, both mitigation and adaptation are a little bit difficult to outrightly, refuse accountability and responsibility. But for loss and damage, that was the big fight in the Paris negotiations.

For instance, in 2015 when the United States conditioned their endorsement of the Paris Agreement on a decision that no notion of compensation or liability is acknowledged.

This has been a big push on their part and also among other rich country governments’ parts since then. That’s why it took us so many years to even get a fund set up. 

Lidy Nacpil (front row, center) and other representatives of civil society organisations with UN Secretary-General António Guterres at COP30 on 19 November. Image: Kiara Worth/UN Climate Change

Now that we have that go-signal for developing countries to begin applying for the initial amount, what are the steps that the Philippines and other typhoon-battered countries in Asia should take to access it?

You have to prepare a proposal, then the guidelines for the proposals are going to come out, then you submit it to the secretariat. One area of contention was how big a role the secretariat would be playing in reviewing the proposals. We wanted a more democratic process for that. Then after the secretariat processes the proposal, they will endorse to the board.

Project proposals that will be taken into account for decision making, whether they will be approved or not, will have a whittling down or a short listing at the secretariat level before it comes to the board.

It would be quick if they can do it in a month. The board meets only three to four times a year so then that’s when the board will discuss and approve. How much time will that take? No one knows at this point before the money is disbursed.

The amounts are so small and there’s so much need in terms of many countries, so how do you prioritise? There was also another area of discussion when the priority being given to the most vulnerable countries was being discussed.  

Vulnerability usually refers to certain categories of countries, which the Philippines is not included in. [We’re not part of ] the small island developing states, the Africa group, and the least developed countries. [The Philippines] is always in the “others” [category], even though it’s been established empirically that we’re one of the top 10 countries that are highly vulnerable to climate-related disasters.

The Philippines is not even a priority because we are not in any of the three categories?

 Yes, we’re not in the category of countries that are usually referred to [as climate-vulnerable]. In the COP, not just in FRLD, there’s always that debate when some would interpret that the vulnerable countries are only limited to these three categories. We would counter it, saying these three categories need to be mentioned, but the wording in the convention is not black and white in terms of saying it’s only limited to them.

Unfortunately that’s one way that developing countries are sometimes divided. It’s understandable that each country would like to seek to protect and promote their interests in this kind of international processes. But it’s the fact that there’s so little funds and there’s need for it everywhere. I don’t think we should blame developing countries though, for this kind of dynamic.

 We’re forced into this situation because the response is so inadequate, so it is doubly tragic. We’re the ones suffering, we’re the victims of the climate change impacts [but] the resources are so small, and then we’re put into a situation where we have to compete with each other over these resources.

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[Developing countries] are the victims of the climate change impacts [but] the resources are so small, then we’re put into a situation where we have to compete with each other over these resources, so it is doubly tragic.

What will be the basis of decision-making by the board?

There are several requirements for projects. One of the things that we are going to continue to ensure, because we won that fight in the Green Climate Fund (GCF), is that projects should show very clearly that there has been civil society consultation and participation, especially among the affected groups and communities.

Secondly, there has to be some inclusion of how gender and women are addressed. There are no standing policy documents yet on this particular area, so it’s still a procedure that needs to be done.

A third concern we have is community access. How will the projects ensure that communities really participate not just in receiving funds, but in signing and so on? There would be also financial requirements, like risk assessment, categories of risk.

 There are initial discussions how the FRLD would include in their documents and policy frameworks those that have already been worked out by other funds.

There’s also this practice of having accredited entities, like the GCF. This means not anyone can apply, not even  national governments. They have to go through an entity that will be accredited.

It’s going to be a situation of competition across accredited entities, aside from the competition across countries. To fast track the process, automatic accreditation is given to those already accredited by the GCF, the World Bank, Asian Development Bank, other similar funds and banks.

The situation is that there is proliferation of international, both public and private institutions, that are already accredited by the other institutions. If you’re a smaller national entity, you’re going to be competing against these big international entities that can be argued to be more institutionally robust in terms of fiduciary mechanisms and implementation capacities.

This will all figure in this process of considering the proposals – which entities and country beneficiaries will be prioritised, and then of course the quality of the proposals. 

What we’re afraid of is that the fund will adopt the kind of approach of other kinds of funds that are not tailored to meet loss and damage. [We are afraid] that it is going to be bogged down by all these requirements, which may be arguably justified and reasonable for other types of projects and programmes, but not for a fund to quickly respond to loss and damage. It can become a nightmare.

 We don’t want to give up because this is such an important fund for our people. So we will continue to engage with the board and campaign publicly. I think we need a public campaign to fill the fund and then to make sure the fund is efficient and effective given its purpose.

 When you say accredited entity, these are entities where the money will come in, or are these entities the ones who will create the proposals?

These are the entities that are eligible for submitting proposals. A national agency may develop a proposal, but it needs to have an accredited entity to submit it for you, but they’re gonna charge you money too.

Examples of accredited entities in the Philippines include the  Development Bank of the Philippines, which is an accredited entity of the Green Climate Fund, so is the Land Bank of the Philippines. If they’re accredited entities of the Green Climate Fund, under the current policies, it is expected that they can be automatically accredited for the FRLD.

What are examples of entities which can create these proposals?

Under the GCF, they’re called implementing entities, which work with the accredited entity. In the Philippines any agency or NGO can be an implementing entity, but they have to work with an accredited entity.

 Would you know of any implementing entities that are already working on their proposals to access the FRLD?

I don’t think they’re that prepared. But for loss and damage, we would really encourage communities, NGOs or civil society groups working with local governments [to submit proposals]. The closer you are to the ground, the more effective you are in responding to loss and damage.

Has the project financing-based mode of disbursement for the loss and damage fund been resolved? 

 The project-based approach doesn’t automatically mean that the transfers will be in the form of loans. That is one fight we did and we are still doing is to insist that the form of disbursement should be grants-based. You can’t penalise a country twice who has already suffered loss and damage. You can’t help them and tell them to pay you back.  

That debate will come in – whether the payment would be throughout the project cycle or extended over a longer term period, because usually the terms of repayment is if the loans are considered highly concessional. For instance, in the practice of the World Bank, highly concessional loans can be repaid in 30 years, even if you use up all of the money right away. But we are not getting into that yet because we’re insisting it should not be loans for the loss and damage fund.

You mentioned earlier about how you would like to publicly campaign to fill up the inadequate FRLD fund size. What can the board do and what can the Philippines, as the host of FRLD, do about this?

At the end of the day, it’s a decision made by those who have the money. Even if there is an international agreement that they are supposed to provide funds, there’s no way of enforcing them legally because they’re so powerful. It’s up to them what they’re going to give. For us, the recourse is we need to ramp up pressure.

 Even a ruling by the International Court of Justice, and it’s very clear there in their latest advisory opinion, is not a guarantee it will move them.That’s why we have been focusing on ramping up citizen pressure so that governments will be responsive.

What are your hopes for FRLD in this COP and beyond?

Unfortunately, the only decision the COP can make on FRLD is to receive the report. The draft decision takes the report to welcome the progress and commend the board for the progress made and so on, because policy making on FRLD is now basically on the board of FRLD.

The COP can provide guidance, can point to directions, can make strong calls, but for the those to be effective or operational, they have to be translated into policies by the board. It doesn’t mean it’s not meaningful to be discussing FRLD in the COP because it raises attention. It is also delivers a strong message to governments, especially those sitting in the board. We might want to make use of this space to deliver messages on FRLD, but we still need to work and challenge and engage the board.

What is your hope for COP30 in its last few hours?

We have been hoping that this COP would deliver a decision on the creation of a global just transition mechanism.

As the world is pushing for transitioning away from fossil fuels, from land-based mitigation problems and transitioning away from a system that is creating this climate crisis, we need to emphasise that transition must be just. 

In terms of other aspects of the negotiations, our hope was even more quashed by how these last two weeks have been unfolding. Again, that’s not surprising. We went through this with eyes wide open that it’s going to be really difficult fights, especially on climate finance because there’s no room to review the decision made in Baku.

It’s just an arena now to deliver messages and make sure that finance is advanced in the various areas for negotiations. But I think we know that this fight, we do it in different battlegrounds. COP is only one of them. Another battleground is with our own governments, and then with the governments of countries like the US, the European Union, and so on. For that, we need to link hands with our counterparts in these countries.