Shortly after the opening ceremony of the 2023 United Nations climate negotiations in Dubai, delegates from countries around the world rose to a standing ovation to celebrate a long-awaited agreement to establish a loss and damage fund to help vulnerable countries to help recover from climate-related disasters.
But the applause may not yet be justified. The deal itself leaves much undecided and has drawn criticism from climate justice advocates and frontline communities.
I teach global environmental politics and climate justice and have been attending and observing these negotiations for more than a decade to address demands for just climate solutions, including loss and damage compensation for countries that have done the least to cause climate change.
Stringer/Anadolu via Getty Images” data-src=”https://s.yimg.com/ny/api/res/1.2/hQJ_IyeNJt3jDZuO_y4ZxQ–/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtoPTYzOQ–/https://media.zenfs.com/en/the_conversation_us_articles_815/6ca0fe637 47858f4ce60b54b39e9b72f”/> COP28 President Sultan Ahmed al-Jaber, center, walks with world leaders and country representatives to the opening ceremony of the climate summit. The loss and damage fund was one of the first items approved. Stringer/Anadolu via Getty ImagesA brief history of loss and damage
“Breakthrough” was the term often used to describe the decision at the 2022 COP27 climate conference to finally establish a loss and damage fund. Many countries welcomed this “long-delayed” agreement – it came 31 years after Vanuatu, a small archipelago in the Pacific Ocean, first proposed compensation for loss and damage from climate-induced sea level rise during earlier negotiations.
However, the agreement was only a framework. Most details were left to a transition committee that would meet during 2023 to pass on recommendations on this new fund to COP28. A United Nations report outlined at the commission’s second meeting found that funding from rich countries to help poorer countries adapt to the ravages of climate change grew by 65% between 2019 and 2020 to $49 billion. That is still far below the $160 to $340 billion that the UN will need annually by 2030.
As the meetings progressed, developing countries, long wary of traditional financial institutions’ use of interest-bearing loans, which left many low-income countries in debt, proposed making the fund independent. However, developed countries insisted that the fund be housed at the World Bank and withheld the recommendations until just before COP28.
The devil is in the details
While any deal on financing climate disaster damage would certainly be portrayed as a historic victory, further research shows that it should be welcomed with hesitation and scrutiny.
Firstly, the fund contains no details about its size, financial objectives or how it will be financed. Instead, the decision merely ‘invites’ developed countries to ‘take the lead’ in providing financing and support, and encourages commitments from other parties. It also does not indicate which countries will be eligible for funding and vaguely states that this would be the case for “economic and non-economic losses and damages associated with the negative impacts of climate change, including extreme weather events and slow-moving events.” get going.”
So far the pledges have been disappointing.
Fida Hussain/AFP via Getty Images” data-src=”https://s.yimg.com/ny/api/res/1.2/AtQVntow1GjUPkv4gCgmHQ–/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtoPTY0MA–/https://media.zenfs.com/en/the_conversation_us_articles_815/db8951ced1e02ea 550a712eb0c2d2b86″/> Extensive flooding due to extreme rain destroyed homes and livelihoods across Pakistan in 2022. Residents set up tents along a stretch of dry land. Fida Hussain/AFP via Getty ImagesCalculations of the early pledges amount to just over $650 million, with Germany and the United Arab Emirates pledging $100 million and Britain committing $75 million. The United States, one of the largest contributors to climate change, has pledged only $17.5 million in comparison. It’s a shockingly low starting point.
Also, any idea that this fund represents liability or compensation for developed countries – a major concern for countries with a long history of carbon pollution – was completely dismissed. In fact, it is noted that the response to loss and damage is instead based on cooperation.
In a rare victory for developing countries, funds were made available – even at sub-national and community levels – to all countries, albeit with performance indicators as yet undetermined.
Additional concerns have been raised about the fund’s interim host: the World Bank. In fact, the decision on a host institution was one of the sticking points that almost derailed previous discussions.
On the one hand, the United States and other developed countries insisted that the fund be placed under the World Bank, which has always been led by an American and has historically promoted pro-Western policies. However, developing countries opposed the World Bank’s involvement based on their historical experiences with its lending and structural adjustment programs and pointed to the bank’s longstanding role in financing oil and gas exploration as cornerstones of development efforts.
Ludovic Marin/AFP via Getty Images” data-src=”https://s.yimg.com/ny/api/res/1.2/gqUeQ9ghN1JtNa1PjW1jFg–/YXBwaWQ9aGlnaGxhbmRlcjt3PTk2MDtoPTY0MA–/https://media.zenfs.com/en/the_conversation_us_articles_815/6cc0a6454a ed9e54599ea85dabd8906c”/>After a stalemate and US attempts to block a consensus, a compromise was reached to place the fund under the World Bank for four years, with guardrails to ensure its independence and impact. After this period, the host structure will be reviewed, leading to a fully independent fund or a continuation under the World Bank.
The concern for critics with this route is that the compromise risks ending up as a permanent hosting situation.
And there are other issues, such as the composition of the fund’s board, which only allows for national representatives, and not for representatives of civil society, such as from indigenous groups, as requested by developing countries. The size of the permitted funding is also still up in the air. In its vague state, the fund opens the door for countries to include, as part of their loss and damage financing obligations, private loans, conditional import credits and even financing from the fossil fuel industry, while the industry at the same time continues to fuel climate damage. .
What happens next, from 2024 onwards
To date, the international climate community does not have a solid track record when it comes to climate finance pledges. Each successive fund – from the Green Climate Fund that supports green projects in developing countries to the Adaptation Fund that builds climate resilience for the most vulnerable countries – has been woefully underutilized from the start.
In 2021, the entire climate finance ecosystem, from national commitments to private investments, totaled $850 billion. Experts indicate that this amount should be closer to $4.3 trillion.
That target represents 20% annual growth through the end of this decade – a significant increase over recent years.
From 2011 to 2020, total climate finance grew by just 7% per year. If this trend continues, developing countries and the most vulnerable countries will not only lose confidence in this process, but the need for financing losses and damage will only increase.
The board of the new fund has been mandated to hold its first meeting on January 31, 2024. While this early start time is commendable, droughts will continue to kill crops and storms will continue to flood homes, while the new fund will still have a series of will hold meetings to determine who is eligible, how to apply, and how and when the funds will actually be distributed.
Researcher Will Erens, a student at the University of Southern California, contributed to this article.
This article is republished from The Conversation, an independent nonprofit organization providing facts and analysis to help you understand our complex world.
It was written by: Shannon Gibson, USC Dornsife College of Letters, Arts and Sciences.
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Shannon Gibson is affiliated with the Global Justice Ecology Project.