While climate change impacts all countries around the world, many of the most vulnerable countries are not just the lowest historical greenhouse gas emitters, but also have the least financial capacity to deal with climate loss and damage. It is thus a matter of climate justice to set up an effective loss and damage fund, which provides fast finance following extreme weather orc limate-related disaster events, and funding to address the negative impacts of slow-onset climate events such as sea level rise.

Although the recent COP28 finally operationalized a loss and damage fund, this Article explores how it remains voluntary and inadequate. This Article elaborates on the justifications, background and weaknesses of the current loss and damage regime, before proposing some solutions. This Article argues that the United Nations Convention on the Law of the Sea (“UNCLOS”) is an effective tool to ensure mandatory cooperation and contribution to a loss and damage fund, given its compulsory dispute resolution mechanism and Article 235, which covers State responsibility and liability. If climate change resulting from greenhouse gas emissions is construed as marine pollution, it may be argued under UNCLOS that States have an obligation to contribute to and cooperate in the development of a loss and damage fund.

This Article also explores how the climate loss and damage regime can be better structured so that there will be adequate funding. In particular, this Article draws on the existing oil spill compensation regime to propose a two-tiered insurance pool, with the first tier based on contributions from industry and the second tier funded by nations based on their emissions and capacity to contribute.