A sectoral approach to the Loss and Damage fund: exploring potential applications and guiding principles

Review
The article provides a comprehensive and timely analysis of the newly established Loss and Damage (L&D) fund, highlighting its potential to transform climate finance and address specific sectoral needs. The interdisciplinary approach enriches the discussion by incorporating insights from various sectors, strengthening the argument for the fund's necessity and utility. The focus on guiding principles for the fund's operation presents a forward-thinking perspective that is crucial for its success and effectiveness.

Comments:

The abstract could be strengthened by providing a more focused discussion on the urgency and monumental nature of the L&D fund. Clarifying why the fund is considered monumental and briefly explaining the current environmental and financial challenges it aims to address would make the significance clearer to both expert and non-expert readers. Condensing the aims, contributions, and outcomes into a more succinct but impactful statement could enhance clarity and engagement.
Improving Logical Flow:

Some sections of the article, particularly in the introduction, would benefit from improved flow and connectivity between arguments. This would enhance the coherence of the narrative and make the article more compelling and easier to follow.

Figure 1: The y-axis is too small to read effectively. Increasing the font size or adjusting the scale could improve readability and overall effectiveness of the visual presentation.
Figure 2: The article includes seven figures with detailed breakdowns of data. Consider the necessity of presenting total incidents alongside specific breakdowns. If both are to be maintained, ensure clear marking and reference connections within the text to enhance accuracy and relevance. Additionally, clarify the chronological scope of the data used, especially if the source does not specify a date.

While the article commendably discusses four guiding principles for the effective management of the L&D fund, incorporating empirical evidence to support these theoretical claims would significantly enhance credibility. For instance, demonstrating how clarity in fund operations has led to better outcomes in similar contexts could solidify the arguments made.

A more balanced discussion on the contrasting opinions regarding the effectiveness of the L&D fund would provide a more rounded view of the subject. Highlighting where these dissenting voices stand in the context of establishing the fund could enrich the debate and offer a more comprehensive understanding of the challenges and opportunities associated with the fund.

Note:
This review refers to round 1 of peer review.

Review
1. Is the article relevant to UCL Open Environment aims and scope, as set out above?
Yes very much so.

2. Does it offer an original contribution to the field? Is it breaking new ground? If so, how?
Very difficult for me to appraise this given the lack of referencing. Based on my area of expertise (ocean governance and finance) I would suggest that it is missing insight that could be drawn from other topic areas.

3. Does it engage with recent scholarship?
Yes but not comprehensively. Referencing is missing throughout and it is not clear how arguments have been built or on what they are based.

4. What are the strengths of its argument and analysis? Do you have suggestions for improvement?
The manuscript sets out to present a discussion of potential options that a Loss & Damage Fund could address and in doing so determine guiding principles to ensure this fund is effective and equitable. I think the premise of the manuscript is great, however it’s value is undermined by a lack of literature to support it’s arguments. In addition to substantial referencing required throughout, I recommend that the authors consider literature critiquing how each of the ‘challenges’ or losses that they propose and research how these are responded to in other contexts e.g. through compensation or otherwise An analysis of this literature (which undoubtedly will include many sets of guiding principles) would helpfully inform the development of the overarching principles presented here.

The paper is well-written, but I would suggest it is revisited in terms of presentation of information (e.g. Can more introduction be provided – what are the interlinkages referred to? What are the key issues that remain unresolved? Why is a sectoral (or fields? – need to ensure consistency) approach appropriate? Why have the ‘sectors’ considered been selected? / Section 2 – Can the Sectors be introduced in this introductory section?). Referencing is required throughout, and as previously mentioned should be used to build the argument throughout the course of the manuscript to lead to the criteria distilled in Section 3, which while forming the main point of value of the manuscript are not well-supported in previous text. Further, some of the proposed ‘solutions’ or applications of the L&D fund seem a bit random and perhaps inappropriate e.g. monitoring infrastructure? I’d like to see some link here to how this could be linked to losses and then also your final criteria.

On initial review key areas of literature appear to be missing (there are likely more but this links to my areas of expertise and is also a reflection of my light touch review given my opinion that substantial revisions are required – reference to the ocean with respect to climate regulation and, that relating to the topic of compensation and how specific ‘types’ of loss are responded to when compensation is agreed.

Other (not comprehensive) specific comments
Check for consistent use of language ‘developing countries’ preferred terms tend to include low-income economies etc. but will need to fit with language of climate governance regime.

Repetition in abstract relating to ‘root causes’ and vulnerabilities.

Clarify meaning – “Unavoidable losses and damages are risks and impacts that go beyond existing mitigation and adaptation measures”

I would suggest some assistance for the reader is provided as to how the ‘sectors’ have been chosen and why they are relevant for the article.

2.1. – missing reference here to the inclusion of the ocean in the hydrosphere and its role in climate regulation.

Some justification of statements required – e.g. “warming over the last half century has been greatest in the tropics (Fischer & Knutti, 2016), therefore addressing these consequences in low-income countries of the tropics is a matter of climate justice.” – why?

5. Is the overall style and presentation good? Do you have suggestions for improvement?
Please refer to previous comments.

6. Is the article’s length appropriate for what it has to say? Suggestions for shortening papers that extend over 8,000 words (excluding references) are welcome.
n/a – see previous comments.

Note:
This review refers to round 1 of peer review.

Review
1) Recommendation:
My recommendation is to Accept with Minor Revisions required.

2) Content and argument:
This article analyses the Loss and Damage Fund, a recently stablished new funding arrangement for assisting developing countries that are particularly vulnerable to the adverse effects of climate change, in responding to loss and damage.
The authors offer a comprehensive view of what is understood by loss and damage in the context of climate change, what sets this instrument apart from other existing climate finance tools, the areas to be prioritised, and conclude with practical and ethical recommendations or ‘guiding principles’ to adhere to when implementing the new tool.
The authors refer to relevant and recent literature in the field.
The abstract adequately summarizes the article. Likewise, the introduction is well-framed, and the definition of loss and damage in the context of climate change finance is appreciated too.
I find the article relevant and pertinent, and worth being published.

3) Writing style:
The manuscript is well written, with a logical structure and correct flow. The use of English is appropriate.

4) Figures:
• Fig.1: Please remove in-figure labels (currently not readable), in-figure title is redundant (already present in figure caption), use a more convenient scale in x-axis: 5,10-year.

5) Formatting:
The format of in-text citations should be homogenised throughout the manuscript.

6) General comments
I would reshape Section 2, as the use of the term ‘sector’ is not really aligned with other concepts enumerated, such as ‘Human rights and ‘Human security’. The present configuration also creates a misalignment between the content of the section and the items listed in Figure 3. A possible way out would be to rename the section to something like ‘Potential benefits of a high-functioning L&D fund’ or simply separate ‘Human rights and ‘Human security’ into a new section.

7) Minor comments
• P3,Intro: “the UNFCCC Transitional Committee tasked with establishing a new fund and financial arrangements to address loss and damage have reached consensus on some matters but (at the time of writing) key issues remain unresolved”. Please indicate the unresolved issues if they are known to the authors.
• P5: “As the likelihood of extreme weather events can be attributed to climate change, it provides a strong scientific basis which helped lead to the adoption of the decision to establish a fund and funding arrangements to address loss and damage”. Not sure whether the causal link provided is true. Please revise sentence.
• P8: “While new initiatives with forecast-based financing and early action are being put in place”. References to or examples of these initiatives could be helpful.
• P9: Please replace ‘though’ by ‘through’.
• P10: Define ‘SDG6’.
• P12: In ‘With transportation infrastructure now increasingly vulnerable, loss and damage funds can be put to rebuilding damaged infrastructure’, ‘loss and damage’ should read ‘Loss and Damage’ or ‘L&D’. Please ensure consistency of this term throughout the document.
• P12: “The key challenge with transport projects is the lack of profitability and recovery as this is a public good”. I would reconsider this sentence, as it is not necessarily true that public goods are not economically profitable.
• P13: Replace ‘IPCC ARG’ by ‘IPCC AR6’.
• P16: Define ‘GCF’.

Note:
This review refers to round 1 of peer review.