Loss and Damage refers to the economic and non-economic consequences of climate change that can no longer be avoided through mitigation or fully managed through adaptation. The Fund for Responding to Loss and Damage (Fund) was established at the 27th Conference of the Parties (COP27) to the United Nations Framework Convention on Climate Change (UNFCCC). The Fund was operationalized at COP28 the following year. Its purpose is to assist developing countries particularly vulnerable to climate change to respond to Loss and Damage from extreme events and slow-onset processes. Beyond mere disaster relief, the Fund can finance recovery, reconstruction, relocation, livelihood restoration, national response systems, and responses to losses that ordinary development finance was not built to recognize.

From July 8 to 10, 2026, the Board of the Fund for Responding to Loss and Damage (Board) held its ninth meeting in Manila. The meeting faced an overwhelming first pipeline of 176 requests from 119 developing countries, totaling USD 2.8 billion. The Board raised the Fund’s start-up allocation under the Barbados Implementation Modalities, which served as its pilot framework, from USD 250 million to approximately USD 350 million. As of March 2026,  27 Parties pledged a total of approximately USD 822 million, but signed contribution agreements cover a smaller amount. Estimates synthesized during the Fund’s design process placed residual economic Loss and Damage in developing countries at USD 290 to 580 billion annually by 2030, demonstrating a glaring gap between available funding and demand. Echoing what former Environment Secretary Maria Antonia Yulo-Loyzaga said after the Philippines signed the Host Country Agreement with the Board at COP29, the Fund “may never be enough.”

In the same month, Metro Manila experienced unusually heavy rains and local flooding, which later resulted in consecutive suspensions of on-site work and classes. Different parts of the country also faced continuous heavy rainfall, flooding, landslides, evacuations, damaged homes, disrupted livelihoods, and cancelled travel due to the enhanced southwest monsoon and Tropical Cyclone Kiyapo. The government’s report recorded flooding in Zamboanga City, Iloilo, Guimaras, Cagayan, and Davao City, among others. For the Philippines, like many climate-vulnerable countries, Loss and Damage is more than an abstract workstream negotiated in air-conditioned and comfortable conference rooms.

Common But Differentiated Responsibilities and Respective Capabilities (CBDR-RC)

Climate change is a common problem that all countries confront. However, countries differ in their contribution to the problem, the scale of the impact they are expected to face, and their capacity to respond to its ravaging effects. In broad terms, this is the principle of CBDR-RC. CBDR-RC is foundational in international environmental law and is deeply embedded in the UN climate regime. And while it does not operationalize the Fund to the extent of producing a line-by-line invoice for States, it provides an equitable basis for cooperation. As stated in Birnie, Boyle, and Redgwell’s International Law and the Environment, CBDR-RC “has significant normative value in setting parameters within which responsibilities are to be allocated between developed and developing states in the subsequent negotiation of further implementing agreements or in the interpretation of existing agreements.”

Its roots are usually traced to Principle 7 of the 1992 Rio Declaration. In view of States’ different contributions to environmental degradation, it declares that “States have common but differentiated responsibilities.” As participating states that adopted the Rio Declaration, developed countries acknowledge a special responsibility because of the “pressures their societies place on the global environment and of the technologies and financial resources they command.”

The “RC” in CBDR-RC is important because the globe did not stop warming when the UNFCCC was signed. States should not be barred by the rigid divide between developed and developing States made in 1992, when present capacities and emissions have changed. Some States that once placed comfortably within the political Global South now possess vast financial resources, sophisticated technology, and a significant share of current greenhouse gas emissions (GHGs).

Article 3(1) of the UNFCCC provides that “[t]he Parties should protect the climate system for the benefit of present and future generations of humankind, on the basis of equity and in accordance with their common but differentiated responsibilities and respective capabilities. Accordingly, the developed country Parties should take the lead in combating climate change and the adverse effects thereof.”

Article 2(2) of the Paris Agreement provides that the “Agreement will be implemented to reflect equity and the principle of common but differentiated responsibilities and respective capabilities, in the light of different national circumstances.” Relatedly, Article 9(1) states that developed country Parties shall provide financial resources to assist developing countries with mitigation and adaptation. Article 9(3) further requires them to continue taking the lead in mobilizing climate finance.

At paragraph 148 of the International Court of Justice’s July 2025 Climate Advisory Opinion, the Court explained that CBDR-RC takes account of States’ “historical and current contributions to cumulative GHG emissions” and their “different current capabilities and national circumstances.” In other words, “RC” looks at what a State can do now, instead of focusing on its historic contribution to the climate problem.

When the fund is not enough, what exactly is missing?

The UNFCCC already includes concrete financial commitments for developed country Parties, and advocates argue that their contribution to the Fund should be in addition to existing commitments rather than a replacement. It is also important to note that the decision adopting the Paris Agreement also states that Article 8—the article on Loss and Damage—does not involve or provide a basis for any liability or compensation.

For years, climate-vulnerable countries have had to argue that mitigation and adaptation did not tell the full climate story. Even if the world reduced emissions tomorrow and adapted as far as money and technology allowed, harm would already have occurred, and more would become inevitable. Granted, the Fund answers to an amalgamation of calls made over decades.

The Fund’s insufficiency cannot be measured only by subtracting pledges from needs. The underlying question is how the money enters the Fund and what the payment is understood to mean. Unfortunately, the Fund was not built to address the accountability problem. The Fund is designed to operate on pledges from developed and capable countries rather than hold responsible states liable—for example—for their GHG emissions and historic contribution to climate change.

Is CBDR-RC applied to the Fund? On the receiving side, the Fund is expressly directed toward developing countries particularly vulnerable to climate change. Its start-up arrangements reserve at least half of the resources for least developed countries and small island developing States. On the other hand, no State is legally bound to make a contribution. Nonetheless, the COP28/CMA5 decision urges developed countries to continue providing support, encourages other Parties to do so voluntarily, and invites contributions, with developed countries taking the lead. The Governing Instrument of the Fund allows funding from public, private, philanthropic, and innovative sources; provides for periodic replenishment; and directs the Board to prepare a long-term resource-mobilization plan.

If it were to fulfill its purpose and faithfully apply CBDR-RC, the Fund would benefit from an assessed contribution schedule. As of August 2026, no formula dictates which country should contribute, how much it should contribute, or how its share should change based on historical emissions and current capability. More fundamentally, the operationalization decision recalls the Parties’ understanding that the arrangements are “based on cooperation and facilitation and do not involve liability or compensation.”

The Fund does not have to be “polluter pays” in disguise. Under this principle, the polluter pays the cost of pollution. In contrast, a contribution to the Fund does not necessarily represent payment for the contributor’s share of climate pollution because the Fund’s arrangements do not involve liability or compensation.

Still, conceding that the Fund was not created to conduct years of attribution proceedings against individual States does not mean a more principled allocation of the burden is unnecessary. This is actually an issue which the ICJ’s dynamic reading of CBDR-RC might help resolve. Developed countries must continue to lead, but other high-capacity States with significant current emissions cannot rely forever on categories identified in 1992.

The issue of the Fund’s insufficiency becomes even more pressing as it moves toward the expected first replenishment in 2027. At the Board’s July 2026 meeting in Manila, it decided to strengthen resource mobilization, fast-track the conversion of pledges, encourage new contributions, and begin preparing the first replenishment cycle. Calls for a more ambitious and predictable replenishment were also made during the high-level side event “Expanding the Finance Base: The Urgent Case for Scaling Up Loss and Damage Finance” co-hosted by the Fund Secretariat and the Philippine Government last September 25, 2026, in the 81st session of the United Nations General Assembly (UNGA 81). This round of replenishment may require the Board and the Parties to decide whether the Fund will continue passing a hat around or begin developing a fairer formula for deciding who should fill it.

The Philippines as host country

The Philippines brings a certain credibility to this discussion because its people understand that climate losses are not solely economic. A flooded school is an educational loss; a destroyed fishing boat is a livelihood loss; repeated evacuation is a loss of health, housing, and dignity; and a community forced away from the coast may lose memory and culture along with land.

The host country can facilitate dialogues and help insist that access be direct, timely, grant-based, locally responsive, and attentive to non-economic loss. It can also insist that the Fund’s future replenishment embody the equity already embedded in international environmental law. Perhaps the host country can make the Board understand that predictable finance cannot depend indefinitely on goodwill.

The Fund is indispensable because Loss and Damage are simultaneously already here and still coming. However, just because it is indispensable does not mean we should settle when it is clearly not yet enough. At present, the Fund succeeds more clearly at identifying whom it seeks to assist than at determining who must sustain that assistance and in what proportion. It reflects CBDR-RC asymmetrically wherein vulnerability structures access to its resources, while responsibility and capability have not yet been translated into assessed contributions.

The Fund may never be enough. No fund can reverse a death, restore a drowned homeland, or return a climate-stolen future exactly to the status quo ante. For now, the Fund gives climate-vulnerable countries a place to seek support and operates on voluntary leadership and solidarity—a bridge under which countries can temporarily seek refuge amidst torrential rain. Perhaps it can next move toward more predictable burden-sharing for the cost of Loss and Damage it was created to address—a more stable and reliable institution in which countries can truly rest and rebuild.