The World Bank is set to hold a Climate Loss and Damage Fund, despite some concerns being raised.
On Saturday, countries made progress in establishing a fund to aid impoverished nations affected by climate disasters, despite concerns from developing countries and the US.
The formation of a “loss and damage” fund at the United Nations climate talks in Egypt last year was celebrated as a victory by developing country negotiators. This marked a significant change from previous years, as richer nations had previously opposed the idea.
However, over the course of the last 11 months, governments have faced challenges in reaching a mutual agreement on the specifics of the fund. This includes determining who will provide funding and where the fund will be situated.
The fifth meeting of a U.N. committee responsible for enacting the fund was held in Abu Dhabi this week, after facing a stalemate in Egypt last month. The committee aimed to finalize suggestions to present to governments at the upcoming COP28 climate summit in Dubai, which is less than four weeks away. The objective is to successfully launch the fund by 2024.
The group of countries on the committee, who are from various geographic locations, made a decision to suggest that the World Bank acts as both the trustee and host for the fund. This has caused disagreements between developed and developing nations.
Developing countries have argued that having a fund housed at the World Bank, where the U.S. appoints the presidents, would give donor nations excessive control over the fund and lead to excessive fees for recipient nations.
In order to secure participation from all countries, it was decided that the World Bank would act as the temporary trustee and oversee the fund for a duration of four years.
Jennifer Morgan, Germany’s designated representative for climate change, stated on X that Berlin is prepared to uphold its duty – actively making efforts to support the creation of the new fund and exploring possibilities for long-term funding sources.
Some were not as hopeful.
Harjeet Singh, the leader of global political strategy at nonprofit Climate Action Network International, described it as a disheartening day for climate justice, as wealthy nations neglect the needs of susceptible communities.
Wealthy nations have not only forced developing countries to accept the World Bank as the administrator of the Loss and Damage Fund, but they have also neglected their responsibility to take the lead in providing financial aid to these communities and countries.
The committee suggested that developed countries should be encouraged to continue providing assistance to the fund, but did not reach a decision on whether wealthier nations would be required to contribute financially.
A representative from the U.S. State Department informed Reuters that they are disappointed that the text does not align with the general agreement about the importance of clearly stating the voluntary nature of contributions.
The United States tried to add a note stating that donations to the fund were optional, but the chair of the committee refused to permit it. The U.S. expressed disagreement with the decision.
Sultan al-Jaber, who will preside over the COP28 talks, said he welcomed the committee’s recommendations and that they would pave the way for an agreement at COP28.