by Shortly after the opening ceremony of the 2023 United Nations climate negotiations in Dubai, delegates from nations around the world rose in a standing ovation to celebrate a long-awaited agreement to launch a loss and damage fund to help for vulnerable countries to recover from climate-related disasters. .
But the applause may not be justified yet. The agreement itself leaves much undecided and has been criticized by climate justice advocates and frontline communities.
I teach global environmental politics and climate justice and have been attending and observing these negotiations for over a decade to pursue the demands for direct climate solutions, including compensation for loss and damage to countries climate change did less.
There is a brief history of loss and damage
“Break” was the term often used to describe the decision at the COP27 climate conference in 2022 to finally build a loss and damage fund. Many countries were delighted by this “long-delayed” agreement — it came 31 years after Vanuatu, a small Pacific archipelago, first proposed compensation for loss and damage caused by sea level rise of top of the climate in earlier negotiations.
However, the agreement was only a framework. Most of the details were left to a transitional committee that met during 2023 to forward recommendations for this new fund to COP28. A United Nations report released at the committee’s second meeting found that funding from rich nations to help poorer countries adapt to the ravages of climate change increased by 65% from 2019 to 2020, to to $US49 billion. That is still well below the $160 billion to $340 billion the UN estimates will be needed annually by 2030.
As the meetings progressed, developing nations, long wary of traditional financial institutions’ use of usurious loans, which had left many low-income countries in debt, proposed that the fund would be independent. However, developed nations insisted that the fund be hosted under the World Bank and adhered to the recommendations until just before COP28.
Devil is in the details
While any deal on funding for climate disaster damages would certainly be seen as a historic victory, further investigation suggests that hesitation and scrutiny should be welcomed.
Firstly, the fund has no details on scale, financial targets or how it will be financed. Instead, the decision merely “invites” developed nations “in the lead” to provide funding and support and encourages commitments from other parties. It also fails to detail which countries will be eligible for funding and vaguely states that “economic and non-economic loss and damage related to the adverse effects of climate change, including extreme weather events and slow- started” would mean.
So far, pledges have been overwhelming.
Early pledges were calculated at just over US$650 million, with Germany and the United Arab Emirates pledging $100 million and the UK pledging $75 million. The United States, one of the biggest contributors to climate change, has pledged just $17.5 million in comparison. It is a shockingly low starting point.
Also, any idea that this fund represents liability or compensation from developed countries — which is a major concern for countries with a long history of carbon pollution — has been completely removed. He indeed notes that the response to loss and damage is based on cooperation instead.
In a rare victory for the developing world, funds were made available — even at the sub-national and community level — to all nations, albeit with uncertain performance indicators.
Additional concerns were expressed about the fund’s interim host – the World Bank. In fact, deciding on a host institution was one of the sticking points that had to come out of earlier talks.
On the one hand, the United States and other developed nations insisted that the fund be hosted by the World Bank, which has always been under American leadership and has historically spread pro-Western policies. The developing countries, however, opposed the involvement of the World Bank based on their historical experience with its lending and structural adjustment programs and noted the bank’s role for years in financing oil and gas exploration as the cornerstones of the efforts. developed.
After a stalemate and US attempts to block consensus, a compromise was reached to host the fund under the World Bank for four years, with safeguards to ensure its independence and influence. After this window, the host structure will be revised, leading to a fully independent fund or continuing under the World Bank.
The concern of critics of this approach is that the compromise risks ending up as a permanent hosting situation.
And there are more issues, such as the composition of the fund board, which allows only national representatives, not representatives of civil society such as indigenous groups, as requested by the developing countries. The scope of funding that will be approved is also still up in the air. In the unclear state of the fund, it opens the door for countries, as part of their loss and damage financing commitments, to count on private loans, conditional import credits and even funding from the fossil fuel industry while the industry continues to fuel climate damage. .
What happens next, starting in 2024
To date, the international climate community has not had a strong track record of climate finance commitments. Each fund — from the Green Climate Fund that supports green projects in the developing world to the Adaptation Fund that builds climate resilience for the most vulnerable nations — has been under-resourced since its inception.
In 2021, the entire climate finance ecosystem, from national commitments to private investment, was worth $850 billion. Experts suggest that this amount needs to be closer to $4.3 trillion.
That target represents 20% year-on-year growth until the end of this decade – a significant increase over recent years.
From 2011 to 2020, total climate finance grew at just 7% per year. If this trend continues, not only will the developing and most vulnerable countries lose faith in this process, but the need to finance loss and damage will not grow.
The new fund board is mandated to hold its first meeting by January 31, 2024. While this early start time is commendable, droughts will continue to kill crops, and storms will continue to flood homes as the new fund takes hold for another series of meetings to decide. who will qualify, how they can apply and how and when funds will be distributed.
Researcher Will Erens, a student at the University of Southern California, contributed to this article.
This article is republished from The Conversation, a non-profit, independent news organization that brings you facts and analysis to help you make sense of our complex world.
Written by: Shannon Gibson, USC Dornsife College of Letters, Arts and Sciences.
Read more:
Shannon Gibson is affiliated with the Global Justice Ecology Project.
