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What the UN's Loss & Damage Fund Can Learn from Scotland’s Prototype

Our series Loss & Damage explores what it would look like to localize climate funding

June 2024
June 2024
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As climate challenges mount around the world, donors want to move dollars to frontline leaders to help with loss and damage – fast. But that's hard when donors lack proximity to the communities they fund – and it leads to grantmaking that is less informed, less creative and ultimately less effective.

In Proximate’s series, Loss & Damage, we’ll explore the question: what would localization of loss and damage funding look like over these next critical years?

The United Nations’ $700 million Loss and Damage Fund, announced at COP 28, might be the largest example of a fund created to compensate climate vulnerable countries for the consequences of climate change. But it wasn’t the first. 

Back in 2021, during COP 26, host country Scotland made history as the first Global North country to pledge bilateral finance specifically for addressing climate-related loss and damage, with an initial pilot commitment of £2 million. They decided to regrant £1 million of these funds through the Climate Justice Resilience Fund, a participatory grantmaking intermediary that moved the funding quickly to frontline communities in Bangladesh, Malawi, and the Pacific. The process enabled communities in each of those regions to identify their needs and fund locally-led solutions.

Scotland has since renewed its funding to CJRF to the tune of £5 million. Now, as the United Nations drips out details about its $700 million fund housed at the World Bank, and other countries and donors explore loss and damage projects, some activists are pointing to Scotland’s regranting effort to ask what can be replicated.

A Regranting Project

The Climate Justice Resilience Fund is not a typical philanthropy, rather, it’s an intermediary that pools dollars from private foundations and philanthropists. They have redirected $25 million since 2016 to more than forty major projects around the world, with a focus on women, youth, and indigenous communities working on climate resilience. 

In 2021, the Scottish government contracted CJRF to serve as a re-granting partner for £1 million of Scottish aid funding, and support communities on the frontlines of climate change around the world to identify, prioritize, and address the loss and damage they suffer.

Ayesha Dinshaw is the Loss & Damage Program Officer at CJRF, and an author of the December 2023 report How Small and Locally Led Grants can Address Loss and Damage, which explores their pilot project with the Scottish government.

“When you're talking about loss and damage – especially non-economic loss and damage – it's really based on values. It’s not fair to have someone else determine what you’ve lost, or what was important in what you lost, or how you want to address that,” Dinshaw says. “So that prioritization process should happen at the local level.”

CJRF set up a model where decisions about funding flowed through five main grant partners that are either doing or facilitating efforts to address loss and damage with frontline communities in Bangladesh, Malawi, and across the Pacific islands, as well as globally.

Many grants supported the relocation and reconstruction efforts of families hit by climate disasters; for instance, one project in Bangladesh offered support to “trapped” populations who had lost their homes but could not afford to migrate away from their unsafe temporary shelters.

The structure of the regranting process is laid out in SEI's report, How Small and Locally Led Grants can Address Loss and Damage

The report offers six overarching recommendations and lessons learned, drawing on CJRF’s work and further interviews and analysis. For instance: funders of participatory approaches should “provide safe and adequate spaces to incentivize locals’ involvement” and “respect existing local protocols of community engagement” to the extent possible.

Leading by Example

This summer, Dinshaw and the CJRF team are gearing up to distribute the next £5 million from the Scottish government, as well as $700,000 in additional funding from the Open Society Foundations to CJRF that focuses on youth-led projects that address loss and damage. 

“The main thing that we are doing is taking the lessons we learned from the first million that we programmed and incorporating those into the next five million – and really trying to push the envelope on participation,” Dinshaw says.

Dinshaw acknowledged the challenges with balancing participatory grantmaking with the urgency of issues on the ground. “Participatory grantmaking is the gold standard, and we really try to balance that with speed,” she says. “Sometimes for us that means using trust-based philanthropy, which involves local partners or community members, but may not require them to make every last grant decision.”

For instance, in an upcoming round of grantmaking in the Bay of Bengal, CJRF plans to work with past grantees to identify the priority needs focus areas, and potential grantees to address them. “In the end, our staff will recommend grants, and our board will decide who to fund, but there is a strong element of engaging local partners to get us to that point.”

Overall, she hopes CJRF’s work can influence other funders. 

“We’re willing to experiment with different models of participatory grantmaking and trust-based philanthropy and see what works – and ask, What does it really mean to have individuals determine their own loss and damage and prioritize solutions?” Dinshaw said. “Then we can feed those ideas to larger institutions, like the new UN Loss and Damage Fund.”

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