COP28: Kick-off with Announcement of Funds for Losses and Damages

 COP28: Kick-off with Announcement of Funds for Losses and Damages

The inaugural decision at the United Nations Climate Conference in Dubai was to establish a fund to aid the world’s poorest and most vulnerable countries affected by climate disasters. However, mere announcements are not sufficient.

By Paulo Lima

At the opening of COP28, the United Nations Climate Conference in Dubai, which is ongoing from November 30 to December 12, the imminent launch of a fund for loss and damage took center stage. This new initiative is designed to support impoverished and vulnerable nations in tackling the irreversible impacts of the climate crisis, with specifics unveiled at the event.”Today we made history,” declared Sultan Al Jaber, president of COP28, addressing the delegates who gave a standing ovation after the decision was adopted in Dubai. The conference is attended by 97,000 delegates and 150 world leaders representing 198 Parties (197 nations plus the European Union).

The fund aims to address the rising costs resulting from extreme climate conditions and disasters such as floods, droughts, sea-level rise, ocean acidification, and melting glaciers, as reported by The Guardian.

The announcement was immediately followed by financial pledges, including 225 million euros from the European Union, 100 million dollars from Germany, 100 million dollars from the United Arab Emirates, 40 million euros from the United Kingdom, 17.5 million dollars from the United States, and 10 million dollars from Japan.

However, the long-term financial sustainability of the fund is questioned by climate justice advocates, as the decision does not refer to targets or refinancing cycles. These promises fall short of the 100 billion dollars per year required by the most affected countries.

Svenja Schulze, German Development Minister, stated: “We are building bridges between traditional donor countries and new non-traditional donors. Many countries, which were developing 30 years ago, can now assume their share of responsibility for global climate losses and damages.”

The United Arab Emirates, hosts of the conference, will likely see this announcement as an initial major victory, but controversy continues over the country’s plans for oil and gas expansion.

As is widely known, Sultan Al Jaber is the president of both COP28 and Adnoc, the national oil company of the United Arab Emirates, which had a net profit of 802 million dollars last year, a 33% increase from 2021.

A “historic” agreement for the Climate Action Network (CAN), the world’s largest network of NGOs (over 1,900 in more than 130 countries), although “attention – it was explained – must now focus on the main cause of the climate crisis, with a plan to gradually phase out fossil fuels.”

Natalie Unterstell, president of the Brazilian Institute Talanoa, emphasized “the urgent need for real, new financing in the form of grants, not loans that exacerbate the debt of the most vulnerable countries.”

It’s important to note that the losses and damages caused by climate change amounted to about 1.5 trillion dollars (1,500 billion dollars) in 2022, according to a study published this week by Dr. James Rising from the University of Delaware. The countries of the Global South recorded an average loss of 8.3% of their GDP due to the impacts of climate change.

Madeleine Diouf Sarr, president of the Group of 46 Least Developed Countries, stated that, although the progress in creating the fund is significant, an empty fund cannot help the affected populations.

According to Indian economist and director of the World Resources Institute India Ulka Kelkar, developed countries must commit to providing new and additional funds to the Loss and Damage Fund, so that support can be provided to the countries and communities where it is most urgently needed.

“This support should take the form of grants rather than loans, which risk further indebting these economies. It must go beyond commercial insurance provisions, which can fail in the face of recurring and widespread disasters. There is much experience from previous efforts to create international climate funds, and we should avoid pitfalls and ensure that the Loss and Damage Fund is operational as soon as possible.”

For the former President of Malawi, Joyce Banda, the establishment of the Loss and Damage Fund represents a significant victory for vulnerable countries, especially those in Africa that have contributed little to the climate crisis. “It’s a step in the right direction for countries like Malawi, which have suffered extreme losses due to cyclones that killed more than 500 people and forced half a million others to leave their homes just this year. We welcome the commitments from wealthy countries, but we need clear guidelines on how the most vulnerable communities can benefit from this fund, which should also not force countries to take on more debt. The time has come for commitments to be implemented. We need actions, not just statements of intent.”

More funds and transparency are needed

The project for the new agreement includes a fund under the initial aegis of the World Bank, financed by industrialized nations, emerging economies, and fossil fuel-producing countries. The choice of the World Bank as a provisional host raises concerns among representatives of organizations and climate movements from developing countries, who call for greater transparency in accessing funds for vulnerable communities.

COP28 represents a critical moment for the growth of the fund. Governments will need to decide whether to establish clear action objectives, accompanied by adequate financing. However, some nations, including the EU, USA, and Australia, are reluctant to commit to specific targets, fearing an increase in resource demands.

Although the text on loss and damage was adopted on the first day, technically all texts will not be final until the end of the conference, scheduled for December 12.

Now, the issue shifts to the delicate topic of mitigation commitments. Much of the next 10 days will be dedicated to discussions on how to prevent global warming from exceeding the vital limit of 1.5°C above pre-industrial levels, following the hottest year ever experienced by humanity.

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