South Africa’s nomination to the United Nations Loss and Damage Fund board has been welcomed as the country grapples with increasing natural disasters that take a heavy toll on infrastructure. 

The country’s place on the board will see it represent the 54 countries of the African continent as South Africa negotiates under the Africa group at the annual global climate talks. 

The devastation in Durban’s Reservoir Hills informal settlement after floods swept through their shacks in April 2022, leaving several residents missing and others homeless. (Photo: Mandla Langa)

Developing countries – including the Africa group – and small islands have long called for a fund to combat loss and damage: the negative impacts of the climate crisis that occur despite efforts by countries to limit their emissions or adapt to a changing climate. 

Richard Sherman, an Africa group lead coordinator on climate finance negotiations and a member of the South African delegation to the UN Framework Convention on Climate Change, told Daily Maverick that the fund, which was established in 2022 at COP27 in Cairo, is likely to be distributing money only by mid-2025. The fund is currently nested under the World Bank, which will host the secretariat of the fund. 

“The money we need now is to pay for the loss and damage that is already occurring. The loss and damage we face now is because of the failure of developed countries to mitigate, and the failure of them to fund adaptation,” said Sherman. 

“What we have to think about is the future of loss and damage – what role do India and China and the Opec states play in mitigating global emissions – and that has a direct consequence on South Africa’s future as a coal country.

Part of Caversham Road in Pinetown, Durban, was washed away on 12 April 2022 after persistent heavy rain in parts of KwaZulu-Natal resulted in widespread flooding, collapsing roads and death. (Photo: Gallo Images / Darren Stewart)

“What we need right now is a fund that can do things differently. If we don’t resolve the debt crisis, we have to borrow more money because of climate change which is not necessarily because of our actions. We need different approaches and no one seems to have their finger on the pulse on this one,” said Sherman. 

Read more in Daily Maverick: COP27 makes history with agreement on ‘loss and damage’ fund for vulnerable countries impacted by climate change

Developing countries have for years been calling for a loss and damage funding mechanism to shield themselves from the economic (infrastructure, buildings, railways) and non-economic (biodiversity, culture, heritage buildings) losses from the impacts of the climate crisis.

The lack of such a mechanism has left many countries with little to no options for rebuilding what has been lost. At other times, countries with limited funding have rebuilt, but often not in a resilient and sustainable way.

Dr Chris Trisos, director of the Climate Risk Lab at the University of Cape Town, told Daily Maverick the fund was “critically important” for low and middle-income countries in the face of increasingly severe climate hazards. 

He said South Africa had faced economic loss and damage, citing as an example the Cape Town drought between 2016 and 2018 – attributed to anthropogenic activity – that negatively affected the tourism and agriculture sectors.

A bridge in Zwelisha, Kwazulu Natal, near iNanda, was swept away by floods in January 2024. (Photo: Mandla Langa)

“Many of our ecosystems are at risk of climate change. The loss and damage fund is not just for direct economic losses to people but is also for non-economic loss and damage,” said Trisos.

“One of the non-economic losses and damages that is increasingly getting attention is mental health. For example, people who are traumatised by events involving fatalities. I don’t know of research around this after the Durban floods, but I can imagine a lot of people who lost family may have been traumatised by that event. There’s also the mental burden of being displaced from your home and not able to return for years.”

Sherman said that academic work was under way to put a value on non-economic losses, but that the fund would support Unesco in playing a role in addressing some losses such as cultural items, graves and monuments.

As far as addressing economic losses was concerned, Sherman said the fund aimed to be an effective multilateral regime that would challenge norms around sovereign lending, such as borrowing in dollars and concessional financing, and challenge other ways of working, such as ensuring that funding was used for climate-resilient infrastructure. 

COP28 in Dubai concluded with the fund amassing about $700-million. 

With some countries having experienced multiple climate events, the raised financing is barely enough to meet the needs of developing countries. 

Read more in Daily Maverick: Climate Loss and Damage Fund entrenches Africa as beneficiaries — but some believe it’s a wrong turn

South Africa has been crucial in bridging the gap between developed and developing countries, using this role to call for climate financing over the past 10 to 15 years. 

The country was also crucial in advocating for the Green Climate Fund, adopted at COP17 in Durban, whose transitional committee was chaired by former finance minister Trevor Manuel.

SA was also instrumental in pushing for Just Transition funding and pioneering the Just Energy Transition Partnership, among other efforts. 

Sherman said: “Historically, we’ve been very embedded with what is our African priority. It’s not just what’s in it for South Africa, but rather what is our collective priority – we have that accountability towards our group and constituencies of the 54 countries. 

“We have to keep our eye on the ball; there are specific needs that South Africa will want to have covered… We need a specific type of financing that doesn’t require sovereign lending.” DM