Countries took a step closer on Saturday, November 4th, to establishing a fund aimed at assisting poor states affected by climate disasters. This development occurred despite reservations from both developing nations and the United States.
The agreement to create a “loss and damage” fund was considered a major achievement for developing country negotiators at the United Nations climate talks in Egypt the previous year. This breakthrough marked the end of years of resistance from wealthy nations.
Over the past 11 months, governments have faced challenges in reaching a consensus on the fund’s details, such as determining who will contribute to it and where the fund will be located.
A special UN committee assigned to implement the fund convened for the fifth time in Abu Dhabi this week, following a deadlock in Egypt last month. The committee’s aim was to finalize recommendations that will be presented to governments during the upcoming annual climate summit COP28 in Dubai, which is less than four weeks away. The goal is to have the fund operational by 2024.
Representing a diverse group of countries, the committee proposed that the World Bank serve as the trustee and host of the fund, which has been a contentious point fueling divisions between developed and developing nations. Critics argue that housing the fund at the World Bank, whose presidents are appointed by the US, would give donor countries undue influence and result in high fees for recipient nations.
To ensure broad support, an agreement was reached for the World Bank to serve as the interim trustee and host of the fund for a four-year period.
While Germany expressed readiness to contribute to the new fund and explore additional sources of financing, some expressed disappointment. Harjeet Singh, head of global political strategy at nonprofit Climate Action Network International, criticized rich countries for turning their backs on vulnerable communities. He accused them of coercing developing nations into accepting the World Bank as the host of the Loss and Damage Fund while evading their financial responsibilities.
The committee also recommended that developed countries be encouraged to provide support to the fund. However, it failed to resolve whether wealthy nations would be financially obligated to contribute.
The US attempted to add a footnote stating that contributions to the fund would be voluntary, but this was not allowed by the committee chair, leading to objections from the US.
Sultan al-Jaber, who will preside over the COP28 talks, welcomed the committee’s recommendations, stating that they would pave the way for an agreement at COP28.
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