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Negotiators Outline Loss and Damage Framework Ahead of COP28, With World Bank Poised to Host Climate Damage Fund Despite Concerns

Negotiators Outline Loss and Damage Framework Ahead of COP28, With World Bank Poised to Host Climate Damage Fund Despite Concerns

The Loss and Damage implementation framework agreed upon on Saturday at the fifth and last meeting of the Transitional Committee (TC5) will be sent to COP28 negotiators. 

Negotiators struck an agreement Saturday outlining the framework for an international fund for climate-ravaged countries ahead of the 28th UN climate change conference later this month.

The 24-member Transitional Committee (TC) – tasked with the operationalisation of the hard-fought Loss and Damage Fund set up at COP27 last year to help vulnerable countries deal with the harm caused by global warming – convened last week in Abu Dhabi for the fifth and last round of talks before COP28. The document approved last week contains recommendations on how the Fund would operate, including who would get the money, and who would pay.

 ‘Loss and damage’ – the COP term for paying up for the economic, social, and cultural losses and damages caused by anthropogenic climate change to natural and human systems – was placed on the summit’s agenda for the first time in nearly three decades. For decades, developing countries have argued that industrialised nations – responsible for about 80% of historical greenhouse gas emissions – should pay for the damage they caused. 

More about the topic: Explainer: What Is ‘Loss and Damage’ Compensation?

The final text invites “financial contributions with developed country parties continuing to take this lead to provide financial resources for commencing the operationalisation of the Fund.” 

It also assures the World Bank as the host of the Fund on a four-year interim basis – despite the US pushing to make this permanent. Developing nations initially expressed opposition to the idea of the Bank hosting the Fund due to their lack of confidence in the institution’s significant shift towards promoting climate action.

The agreement also includes a provision demanded by the US to make payments voluntary, backed by the argument that rich countries are not obligated to pay for loss and damage under the Paris Agreement. This effectively leaves the Biden administration and other big polluters with the option of not contributing to the Fund. 

In a statement, a US state department official said: “No single government, or subset of governments, has enough resources to meet the funding needs of particularly vulnerable nations at the scale that is required. That’s why we made clear throughout these negotiations how crucial it is for this fund to be able to receive financial input from the widest range of sources, including innovative ones like carbon markets, international pricing mechanisms, and others that can serve to complement grants and concessional loans from public and private sources.”

Several developing countries and climate justice advocates heavily criticised Saturday’s deal for lacking firm targets for how much money the fund will disburse and for failing to outline clear responsibilities of developed nations. They argue that these decisions will undermine the Fund’s ability to meet the needs and priorities of affected peoples and communities of the Global South, likely to reach trillions of dollars a year by the end of the current decade. 

Developing nations have built up mistrust in rich countries following years of unmet financial pledges, including a 2009 pledge to deliver $100 billion annually by 2020 that remains unmet to this day.

At the time of the Fund’s establishment in 2022, only a handful of UN member states, including Denmark, Germany, Austria, Belgium, Ireland, New Zealand, and Canada, pledged funding.

You might also like: Climate Finance: Are Rich Nations Doing Enough?

“The continued denial by wealthy historic polluters of their responsibility to pay for climate harms, hiding behind paragraphs and footnotes, is out of touch with reality,” said Lien Vandamme, Senior Campaigner at the Center for International Environmental Law (CIEL), who believes the Fund fails to deliver on justice, equity, and human rights.

“International law is clear and upcoming clarifications by international courts about the legal obligations of States in the context of climate change – and the consequences of breaching those – become increasingly important as wealthy nations continue to deny justice to frontline communities under the UNFCCC,” Vandamme wrote on social media. 

All eyes are now on world leaders and negotiators who will take up the Committee’s recommendations at COP28, set to begin on November 30 in Dubai.

Featured image: Flickr/COP28 UAE

You might also like: What Can We Expect From COP28, And What Must Happen?

About the Author

Martina Igini

Martina is the Managing Editor at Earth.Org. She holds two BA degrees, in Translation/Interpreting Studies and Journalism, and a MA in International Development from the University of Vienna. After working at the United Nations Global Communication Department in Vienna, she joined a newspaper in Italy as a reporter before moving to Hong Kong in 2020. Her interests include sustainability and the role of public policy in environmental protection with a focus on developing countries.

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