Climate negotiator highlights gaps in loss and damage fund

Unsplash/Misbahul Aulia

• $100bn fund is unprecedented
• ‘Inadequate’ in scale and capitalisation
• Focus on delivery and replenishment

A climate negotiator has raised concerns about substantial structural and operational gaps in the United Nations-administered “loss and damage fund” announced on Thursday at the Cop28 climate conference in Dubai.

The first big deal of the event, negotiators officially agreed to set up a $100 billion fund that aims to provide financial support to developing countries suffering from climate-related losses and damages.

Harjeet Singh, head of global political strategy at Climate Action Network International, lauded the fund’s “historic and unprecedented” creation but said the triumph is overshadowed by its inadequacies in “scale, capitalisation and replenishment”.

“These three things are missing,” he told AGBI.

Singh said that over the last three decades the funds were needed to reduce emissions and take action. “The money was not delivered,” he said, adding that the inaction on the part of rich countries had added to the overall cost and the current funding levels were now “inadequate”.

Climate-related damages are expected to cost developing nations between $280 billion and $580 billion per year by 2030, more than double the current total pledge.

Research shows that 55 vulnerable countries have suffered $525 billion combined climate crisis-fuelled losses in the last 20 years.

The Geneva-based Intergovernmental Panel on Climate Change reports that as global warming escalates, losses and damages will intensify, disproportionately affecting developing nations.

Singh said the rich states “avoided” that discussion in the negotiations. 

“All five transfer committee meetings saw how they wanted to negate that point,” he said, putting developing nations under pressure to compromise. 

“But we will not leave it there. We have banked recommendations. We need to get it done.”

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The negotiator also raised concerns about the capitalisation of the fund, particularly whether much of the pledged money is new or in addition to the amounts still owed by states when they made their pledges at Cop27.

Singh said the replenishment cycle of the fund is also a critical issue. Under the current framework, the fund will have a periodic replenishment every four years.

“It needs to be faster, at least every two years to meet the scale of disasters,” he said. 

Wary of the World Bank

The role of the World Bank as the host of the fund is also under scrutiny. 

“It was the US [during negotiations] that was pushing for the World Bank, and also not agreeing to even mention loss and damage in the name,” Singh said, calling the $17.5 million pledge from the US a “pittance”.

Critics have argued that having the World Bank manage the fund could mean richer nations could have more control over the money, and which countries receive – or don’t receive – financing.

The plan to create the loss and damage fund, a concept introduced 30 years ago, was hailed as a breakthrough for negotiations at Cop27 in Egypt last year.

But it has since proved challenging to achieve consensus on the fund’s size, operation and the exact contributions from developed and developing nations.

Its establishment at the summit in Dubai marked a significant advance in climate negotiations. Countries agreed to operationalise the fund, and many nations announced the size of their financial commitment.

The UAE pledged $100 million, as did Germany, while the UK committed £40 million (about $50 million) to the fund and £20 million for “other arrangements”, according to the Cop28 UAE presidency.