Nations have reached a consensus on essential steps to provide financial support to the most at-risk individuals in the world in order to address the effects of climate change.

Governments from richer and poorer countries drew up the blueprint for a new “loss and damage” fund after a tense two-day meeting under UN guidance in Abu Dhabi that ended late on Saturday night.

The initial management of the fund for loss and damage will be handled by the World Bank, with contributions from major developing countries, the US, the EU, and the UK. Though no specific amount has been designated, countries heavily impacted by the climate emergency are aiming for the fund to distribute hundreds of billions of dollars in the near future.

The plan will be officially accepted at the Cop28 UN gathering on climate change in Dubai later this month. However, the recent consensus reached by the interim committee established under the UN framework convention on climate change suggests that this outcome is probable.

Avinash Persaud, a representative for Barbados and the transition committee for Latin America and the Caribbean, stated: “This was a difficult but crucial result. For the first time, we have a tool that will put into action an international fund to provide grants for reconstruction, rehabilitation, and relocation after severe weather or gradual disasters. This is a significant advancement and will bring encouragement to other climate initiatives.”

Less economically advanced nations made significant compromises, including allowing the World Bank to temporarily oversee the management of the fund. More affluent nations also accepted phrasing insinuating that they should be the primary contributors to the fund, with a “strong recommendation” for their contributions while others would be “motivated” to participate.

Campaigners expressed disappointment with the agreement, stating that it does not adequately ensure the necessary funds for vulnerable countries. These funds are estimated to reach trillions of dollars annually by the end of the decade. Harjeet Singh, head of global political strategy at Climate Action Network International, described it as a “sad day for climate justice,” as wealthy nations seem to disregard the needs of vulnerable communities. He added that the agreement does not provide sufficient reassurance that these communities will receive the financial support needed to cope with the impacts of climate change and rebuild their lives.

Loss and damage, which means the rescue and rehabilitation of communities stricken by climate disaster, has been one of the most vexed issues at global climate talks for more than a decade. Poorer countries, with tiny carbon footprints, have done the least to cause the climate crisis but are bearing the brunt of its impacts.

Last November, the Cop27 conference in Egypt made a significant advancement by agreeing to establish a fund for loss and damage. However, four meetings of the transitional committee, responsible for creating the fund, from March to October were unsuccessful due to disputes between countries about the distribution of financial responsibility, eligibility for benefits, and management of the fund.

After two days of intense discussions, negotiations seemed to be on the verge of collapsing on Saturday when the co-chairs presented a “take it or leave it” proposition to the arguing parties late in the evening. The proposal urged developed nations to contribute to the fund and encouraged developing nations to do the same.

Certain activists were dissatisfied with the lack of accountability for developed nations regarding their previous contributions to greenhouse gas emissions. Singh remarked, “The resistance of affluent countries to meeting their financial duties, despite their historical obligations, has blatantly exposed their true motives and their disregard for the struggles of developing nations.”

A representative from the US state department stated that no one government or group of governments has sufficient resources to fully meet the financial needs of nations that are particularly vulnerable. This is why it was emphasized during the negotiations that it is crucial for the fund to have access to a diverse range of funding sources, including unconventional ones like carbon markets and international pricing mechanisms. These can work alongside grants and loans from both public and private sources.

The UAE’s successful diplomacy in Cop28, despite criticism towards Sultan Al Jaber’s dual role as both the leader of Cop28 and head of Adnoc, is an important achievement for the country’s presidency.

According to Al Jaber, the strong recommendation to put the loss and damage fund and funding arrangements into action sets the stage for reaching an agreement at Cop28. The adoption of this approach at Cop28 is crucial for the billions of people whose lives and livelihoods are at risk due to the impacts of climate change.

Many people suggest that major oil and gas companies, like the UAE and Saudi Arabia, should contribute to the loss and damage fund. However, they are currently exempt from this responsibility because they are considered developing nations under the 1992 UN framework convention on climate change, which is the main agreement that led to the 2015 Paris accord.

The United Arab Emirates has not disclosed if it intends to contribute to the fund, however, it has been reported that productive discussions are occurring.

It is uncertain if activists will attempt to renegotiate the fund during Cop28. According to a source, any group that attempts to do so may face backlash from those who view it as the most viable solution and wish to focus on other important topics at the summit.

There are several other major problems that could disrupt Cop28. A large number of countries are pushing for a deal to gradually eliminate the use of fossil fuels, but this is being strongly resisted by numerous oil and gas producers. The “global stocktake” process, which evaluates progress towards the goal of limiting global temperature increase to 1.5C above pre-industrial levels set by the Paris agreement, will also cause disagreements, as major economies will have to confront the insufficiency of their current efforts to reduce emissions.

Source: theguardian.com