As the UN Climate Summit approaches, countries are unable to reach an agreement on the creation of a ‘Loss and Damage’ Fund.
Many nations are at a standstill in their discussions on how to create a fund that will aid in the recovery and reconstruction of countries affected by climate change. These discussions must be resolved within the next 30 days before the important United Nations climate talks begin in Dubai.
Twenty-four nations participating in a committee responsible for creating a “loss and damage” fund concluded their final meeting in Aswan, Egypt on Saturday morning. Developed and developing countries were in disagreement over key issues, such as who should oversee the fund, who should contribute to it, and which countries would qualify for receiving funding.
The committee was tasked with creating a list of suggestions to put into action the fund that was approved at COP27 in Sharm el-Sheikh, Egypt last year. This would be the first United Nations fund specifically designed to combat irreversible climate damage caused by droughts, floods, and rising sea levels.
The group decided to convene once more in Abu Dhabi on November 3, before the COP28 U.N. summit kicks off in Dubai on November 30. The purpose is to attempt to reconcile differences, which could greatly impact the tone of the two-week climate talks.
Preety Bhandari, a senior finance adviser at the World Resources Institute, warned that the COP28 negotiations may face obstacles if the concerns of developing countries regarding funding for loss and damage are not effectively addressed.
One of the most controversial topics last week was the debate over whether the World Bank should manage the fund, which was advocated for by the U.S. and developed nations, or if the UN should establish a new organization to oversee it, as requested by developing countries.
Developing countries argue that allowing the United States to appoint presidents at the World Bank, where a fund is housed, would grant donor countries excessive power over the fund and lead to excessive fees for recipient countries.
Cuba’s U.N. Ambassador Pedro Pedroso Cuesta, who chairs the G77 (a group of developing countries) and China, believes that the World Bank’s operational culture of aiding countries in their development policies is not suitable for the goals of the new climate facility.
He stated that the main aspect of their stance is the establishment of a separate, autonomous organization to oversee the fund.
The World Bank representative responded to the criticisms by stating to Reuters that they are aiding the process and are dedicated to collaborating with countries once an agreement is reached on the structure of the loss and damage fund.
The United States, the European Union, and other entities are advocating for a more specific fund. The EU proposes a fund specifically for the most “at-risk” populations, while the U.S. suggests the fund should prioritize addressing gradual climate consequences, such as rising sea levels.
There is also disagreement among countries about who is responsible for payment.
ActionAid USA’s director of policy and campaigns, Brandon Wu, urged the United States to withdraw its demand for the World Bank to manage the fund.
Christina Chan, a senior adviser to Special Envoy on Climate John Kerry, representing the U.S., refuted claims that the U.S. is impeding advancements on loss and damage.
She stated that we have been consistently putting in effort to handle concerns, troubleshoot, and discover solutions.