An event banner outside the Al Wasl dome in the Green Zone ahead of the COP28 climate conference at Expo City in Dubai, United Arab Emirates, on Tuesday, Nov. 28, 2023. Photo: Hollie Adams/Bloomberg via Getty Images
The United Nations Climate Change Conference (COP28) has launched a groundbreaking loss and damage fund to assist developing nations in addressing the effects of climate change.
The launch, which took place on the first day of the conference held in Dubai, received pledges exceeding $420 million from five countries and the European Union.
The fund was discussed at COP27 in Egypt last year as a vital outcome of the summit. It was hailed by many as the highlight of last year’s event but needed the realisation of funds for it to be deemed successful.
Developing nations facing the brunt of climate change, such as droughts, floods and rising seas, have long called for establishing a fund to help cover the costs of the resulting devastation of these events.
The United Arab Emirates said it would contribute $100 million, describing it as a significant step toward aiding vulnerable communities and enhancing resilience for those grappling with the severe effects of climate change.
Germany also pledged $100 million, and the United Kingdom £60 million, with £40 million directly allocated to the fund and £20 million to support funding arrangements.
The US committed an initial $17.5 million to the fund, while Japan confirmed a contribution of $10 million.
Additional announcements are anticipated in the upcoming days as world leaders convene in Dubai for the negotiations.
To ensure autonomy and impartiality, the fund will have an independent secretariat accountable to a board, the World Bank announced last month.
The United Nations Adaptation Gap report estimates that up to $387 billion will be needed annually if developing countries are to adapt to climate change.
Climate activists have, however, argued that the pledges are inadequate because they will not be enough to help developing countries to mitigate the effects of climate change, including move to cleaner energy sources.
Founder and director of think-tank Power Shift Africa, Mohamed Adow, in a statement said the initial funding pledges are inadequate and will be “a drop in the ocean compared to the scale of the need they are to address”.
“In particular, the level announced by the US is embarrassing for President Biden and John Kerry. It shows how this must be just the start,” he said.
Adow added that although the fund’s rules have been agreed upon regarding how the fund will operate, there are no hard deadlines and targets and countries are not obligated to pay into it.
“The USA and other rich countries wanted the fund to be hosted by the World Bank. This has been agreed on, but on an interim basis, and only as long as it operates in a transparent and easy-to-access way, something the World Bank is not known for. If it proves unfit for the task, we must set up a separate entity to do the job,” he said.
Former Malawi president Joyce Banda in a statement said that establishing the loss and damage fund is a big win for vulnerable countries, especially those in Africa that contributed little to the climate crisis.
“It is a step in the right direction for countries like Malawi that have suffered extreme losses due to cyclones that killed more than 500 and displaced half a million others just this year.”
She added that she welcomed the pledges from rich nations but called for precise directions on how the most vulnerable communities can benefit from this fund, which must also not lock countries into more debt.
“It is time that commitments must be implemented. We need action and less statements of intent,” Banda said.
In his opening address, COP28 president Sultan Ahmed Al Jaber said it was important for this summit to unlock finance to ensure that the “Global South does not have to choose between development and climate action”.
“Let this be the year that climate finance meets the magnitude of the moment. Let this be the COP where we deliver on our promises, from the $100 billion to loss-and-damage.”
Al-Jaber urged countries to work with oil companies to reach common ground, saying that involving fossil fuel companies in the COP28 talks was essential to solving the climate crisis.
Developing countries have argued that wealthy nations, responsible for about 80% of historical greenhouse gas emissions, should lead in giving money to the new fund. The US and others have insisted that no country should have an obligation to pay into the fund.