The 27th United Nations Climate Conference (COP27) in Sharm el-Sheikh, Egypt, concluded last weekend with one of the reached agreements establishing a funding mechanism to assist developing countries in responding to the loss and damage from climate change.

Governments also agreed to establish a “transitional committee” that will make recommendations on how to operate the funding arrangements and the loss and damage fund at COP28 next year. The committee is expected to meet for the first time before the end of March 2023.

Greenpeace Indonesia director Leonard Simanjuntak said a loss and damage funding mechanism was long overdue as for 30 years of climate conferences such proposals have usually been blocked by historic emitters countries.

“This is an acknowledgement that the [developed countries] have to compensate smaller and poorer developing countries who had had to bear the impacts despite not being the main contributor to the climate crisis,” Leonard said on Nov. 22.

However, he said that the situation might be tricky especially in regards to China, a country with a large economy but is still categorized as developing, while smaller and poorer developing countries in Asia and Africa would likely be prioritized for the loss and damage funding.

“I imagine that Indonesia theoretically would be eligible [to receive loss and damage funding] but might not be exactly high up on the priority list,” Leonard said.

The Indonesian Forum for the Environment (Walhi) director Zenzi Suhadi is more optimistic, saying that Indonesia’s geographical position of being on the Pacific ring of fire, with lots of tropical forests and being an archipelago, could make it eligible as the beneficiary of the funding.

“Indonesia has the potential to restore and recover from the loss and damages [from climate change],” Zenzi said.

Developed countries have responsibility in Indonesia since corporations from the countries have investments that have roles in environmental degradation such as deforestation.

Supporting role

Regardless of Indonesia's eligibility for loss and damage funding, Indonesia is still expected to support the cause of its fellow developing countries to make sure that the funding arrangement could operate as soon as possible.

Greenpeace’s Leonard urged Indonesia to leverage its position as a Group of 20 member by being the bridge between the developing countries and the G20.

“Indonesia must go beyond its own self-interest,” Leonard said.

Sonny Mumbunan, chairman of the Center for Climate and Sustainable Finance at University of Indonesia, suggested that Indonesia should position its role that would be beneficial for itself and be able to contribute globally in stabilizing the global climate, such as by integrating maritime issues in the discussions on loss and damage.

“It’s necessary to integrate sectoral issues [such as maritime] into climate financing so Indonesia’s interests will be better reflected there,” Sonny said on Wednesday.

The Environment and Forestry Ministry director general for climate change control, Laksmi Dhewanthi, said for Indonesia the deal for loss and damage funding mechanism was a step forward in implementing the Paris Agreement.

“This funding will help countries, especially developing ones, to be able to address the loss and damage from climate change and hydrometeorological disasters ,” Laksmi said in a statement on Monday.

She said that like Indonesia, developing countries had committed to adapt to climate change with their existing capacities, so the loss and damage funding would be expected to help reduce the potential losses and damages from the negative impacts of climate change.

However, she pointed out it would take time for the loss and damage funding mechanism to be implemented as countries would still need to discuss further the institutional arrangement for the Santiago Network for Loss and Damage – the technical assistance platform for developing countries in averting, minimizing and addressing the negative impacts of climate change.

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