Operationalizing Loss & Damage Financing For Marginalised Urban Communities

While the adverse impacts of the climate crisis intensify, global urbanisation is taking place at an unprecedented scale and pace. Today, one in three urban habitants in the Global South already lives in informal settlements, whose dwellers could rise to well over three billion in less than 30 years (UN 2023), including due to migration in the context of disasters and climate change. Marginalised urban communities have contributed little to the climate crisis, yet they are highly vulnerable due to their poor economic situation and exclusion from public services. As a consequence, they are most critically affected by its impacts, including on health, livelihoods and access to functioning basic services. The Loss & Damage Fund and Funding Arrangements established during COP28 offer immense opportunities to operationalise climate justice by developing more equitable development pathways for the most vulnerable urban groups, and this is much needed given the intensifying climate hazards. Yet, there is a high risk that those who need it most will only have limited access to its technical and financial resources, if at all. This is especially true for residents of informal settlements, who are often not taken sufficiently into account in formal governance schemes. This policy brief therefore specifically addresses the question of how a climate justice perspective can be applied to the creation of appropriate mechanisms for access to the Fund and Funding Arrangements. This concerns the architecture of the Fund in general, and the facilitation of access by developing adequate mechanisms at the urban level in particular. The challenge here is to operationalise formal mechanisms for parts of urban 2 society living in informal and marginalised conditions. The much-needed immediate support after disaster events must address existing multiple vulnerabilities and contribute to the long-term transformation towards more just, equitable resilient and climate- friendly cities.