In a significant development, countries worldwide have come to a consensus on crucial measures to provide financial support to the most vulnerable populations affected by climate change-induced disasters.
This landmark decision materialized after governments from both affluent and impoverished nations convened during a challenging two-day session under the guidance of the United Nations in Abu Dhabi. The session concluded late on Saturday night, resulting in the formulation of a blueprint for a new ‘loss and damage’ fund aimed at aiding nations in repairing the destruction caused by climate breakdown.
Initially, the administration of the loss and damage fund will be entrusted to the World Bank, drawing upon funding sources from sizeable developing nations, the United States, the European Union, and the United Kingdom. While a specific funding target has not been established, nations that bear the brunt of the climate crisis aspire to see the fund grow to the scale of hundreds of billions of dollars within a few years.
This blueprint is anticipated to receive formal adoption at the upcoming Cop28 United Nations climate summit in Dubai, scheduled for the end of this month. It has garnered substantial support, thanks to an agreement by the transitional committee, established under the UN framework convention on climate change, this past weekend.
Avinash Persaud, acting as a climate envoy for Barbados and representing the transition committee for Latin America and the Caribbean, hailed this outcome as “a challenging but pivotal development.” For the first time, an instrument is being established that operationalizes international funding for grants, reconstruction, rehabilitation, and relocation following extreme weather events or gradual onset climatic phenomena. This represents a notable advancement that is expected to energize other climate-related initiatives.
In a gesture of cooperation, developing countries made crucial concessions during the negotiations, allowing the World Bank to serve as an interim custodian of the fund. Furthermore, developed nations have signaled their commitment to contribute significantly to the fund, as they will be ‘urged’ to provide financial support, while other countries will be ‘encouraged’ to follow suit.
Despite this landmark agreement, some environmental advocates have expressed concerns regarding its adequacy to meet the financial requirements of vulnerable nations. The needs of these nations are projected to soar into trillions of dollars annually by the end of this decade. Harjeet Singh, Head of Global Political Strategy at Climate Action Network International, lamented that the agreement falls short of assuring these vulnerable communities that their financial needs for climate impact mitigation and rebuilding will be met.
‘Loss and damage,’ signifying the relief and rehabilitation of communities afflicted by climate-induced disasters, has been one of the most contentious issues in international climate discussions for over a decade. Impoverished countries, which bear minimal responsibility for the climate crisis, have been disproportionately impacted by its consequences.
In a significant breakthrough last November, the Cop27 summit in Egypt endorsed the establishment of a loss and damage fund. However, the four meetings of the transitional committee, charged with designing the fund, held between March and October, were plagued by disputes concerning contributions, beneficiaries, and governance.
Negotiations appeared to be on the brink of collapse this weekend, with co-chairs presenting a final proposition that urged developed nations to contribute to the fund and encouraged developing nations to do the same. Nonetheless, some campaigners expressed dissatisfaction with the lack of substantial confrontation of the historical greenhouse gas emissions of affluent nations.
As the climate summit approaches, the world faces pressing issues, including the contentious debate over phasing out fossil fuels, championed by more than 80 nations but opposed by major oil and gas producers. Additionally, the ‘global stocktake’ process, assessing progress towards the Paris agreement’s objective of limiting global temperature rise to 1.5°C above pre-industrial levels, will be fraught with challenges, as significant economies must confront the inadequacy of their current emissions reduction efforts.
This achievement marks a significant diplomatic milestone for the United Arab Emirates, which holds the presidency of Cop28. However, the presidency, led by Sultan Al Jaber, who also heads the UAE’s oil company, Adnoc, has faced considerable criticism. It is worth noting that many contend that major oil and gas producers, including the UAE and Saudi Arabia, should contribute to the loss and damage fund, considering their status as developing countries under the 1992 UN framework convention on climate change. Discussions are reportedly underway, albeit inconclusive, regarding the UAE’s potential financial contribution to the fund.
While the road to international climate collaboration remains challenging, this agreement represents an encouraging step forward in addressing the global implications of the climate crisis and providing vital assistance to the world’s most vulnerable populations.”
