On Saturday, nations made progress in their efforts to create a “loss and damage” fund aimed at assisting poorer states affected by climate disasters, despite concerns from developing nations and the United States. The creation of this fund was seen as a major breakthrough during United Nations climate talks in Egypt last year, marking the culmination of years of resistance from wealthier countries, Reuters news report said.
Over the past 11 months, governments have grappled with reaching a consensus on the fund’s specifics, including funding sources and its location. A special U.N. committee responsible for implementing the fund met for the fifth time in Abu Dhabi this week, following a deadlock in Egypt the previous month. Their goal is to present their recommendations to governments during the annual climate summit, COP28, in Dubai, less than four weeks away, with the aim of establishing the fund by 2024.
The committee, representing a geographically diverse group of countries, agreed to recommend the World Bank as the trustee and host of the fund. However, this decision has sparked divisions between developed and developing nations. Developing countries have expressed concerns about housing the fund at the World Bank, given the outsized influence of donor countries and the potential for high fees for recipient nations. To secure consensus, it was decided that the World Bank would serve as the interim trustee and host of the fund for a four-year period.
Jennifer Morgan, Germany’s special climate envoy, expressed readiness to contribute to the new fund and explore structural financing options. However, Harjeet Singh, head of global political strategy at the nonprofit Climate Action Network International, criticized rich countries for failing to provide adequate financial assistance and for imposing the World Bank as the host of the Loss and Damage Fund.
The committee also recommended that developed countries be encouraged to continue providing support to the fund but did not resolve whether wealthy nations would be under a strict financial obligation to contribute. A U.S. State Department official expressed disappointment that the text did not reflect consensus on the voluntary nature of contributions and noted the U.S. attempt to clarify this with a footnote.
Sultan al-Jaber, who will preside over the COP28 talks, welcomed the committee’s recommendations, suggesting they pave the way for an agreement at COP28. Despite ongoing challenges and reservations, this development marks progress in addressing climate change and supporting vulnerable communities affected by its impacts.