COP28: Instead of poor countries, global North leads decision over 'loss and damage' funding

The COP28 UN climate meeting in Dubai is in jeopardy due to differences between wealthy and developing countries over how to run a new fund to address the "loss and damage" brought on by more extreme weather and rising sea levels.

After disagreements over whether the World Bank should serve as the fund's host, a "transitional committee" tasked with figuring out the fund's specifics—which nations agreed to establish at the COP27 climate conference last year—failed in Egypt late last week to issue a set of recommendations on how to get it up and running.

The United States and other developed nations are pushing for the fund to be housed at the bank, but poor countries say that this would tip the scales of power in favour of powerful governments and make it difficult for them to access the cash.

The G77/China group of developing nations would prefer a loss and damage fund that is self-governing and independent or one that is based in a UN body.

Last week, G77 chair Pedro Luis Pedroso Cuesta of Cuba told journalists that the fund's administrative setup shouldn't restrict access to it for any developing countries that are vulnerable to climate change or prevent it from receiving a variety of sources of funding.

"It has been demonstrated that the World Bank is not the institution that can best... comply with what we are looking for for this fund," he said, adding that until recently the bank had lacked a "climate culture".

The 24-member transitional committee will reconvene in Abu Dhabi in the first week of November in an effort to reach a compromise and create a single proposal that nations may complete and endorse at COP28, which begins on Nov. 30.

The recommendations will also include advice on which nations may use the fund and how, as well as the various funding sources it may use.

"The eyes of the world are on you to deliver clear, clean and strong recommendations ahead of COP28 to operationalise the Loss & Damage Fund (and) funding arrangements," Sultan al-Jaber, COP28 president for the United Arab Emirates, said in a statement to the committee after the latest meeting.

He emphasised that the effective implementation of the proposals is crucial for the billions of people who are vulnerable to the effects of climate change. He also requested early contributions to the fund.

Since affluent nations have long resisted calls for "compensation" for the consequences of their high share of the emissions that heat the planet and fuel floods, droughts, and storms around the world, loss and damage has been a difficult issue in UN climate discussions.

However, at COP27 in November of last year, a group of 134 states from Africa, Asia, Latin America, and small island nations finally secured international agreement to establish the new fund that will pay to restore destroyed property, relocate communities in danger, or protect cultural treasure before it is lost.