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Negotiations on financial support for the most vulnerable nations affected by the climate crisis have resumed.

World leaders are scheduled to convene this weekend in a final effort to reconcile significant disparities between wealthy and impoverished nations regarding strategies for providing financial assistance to those affected by climate catastrophes.

Negotiations regarding financial assistance for “loss and damage,” which pertains to aiding countries and communities affected by severe weather, began in March but fell apart in discord two weeks ago.

Nations have gathered in Abu Dhabi for a concluding two-day conference, concluding on Saturday evening, in an attempt to address ongoing issues before the upcoming UN Cop28 climate summit in the United Arab Emirates at the conclusion of this month.

It is crucial to reach a compromise this weekend to advance discussions on loss and damage at Cop28. Campaigners are concerned that without a consensus before the summit, the negotiations at Cop could become overly complicated.

Harjeet Singh, the leader in charge of worldwide political strategy for Climate Action Network International, expressed that this gathering is a critical moment that will determine the outcome of the recently established loss and damage fund. It is crucial that we build trust, put the fund into action, and offer essential assistance to those who are most in need. Failure is not an option, as the well-being and livelihoods of millions of people are on the line.

However, there is still a significant divide between developed nations, who prefer that monetary contributions be given voluntarily and from major emerging economies like China and wealthy oil-producing states in the Gulf, as well as traditional donors like the US and Europe, and developing countries who have concerns about the management of the fund and their ability to receive much-needed financial assistance.

Last year, during Cop27 in Egypt, all governments around the world reached an agreement to establish a fund for loss and damage – a significant initial action that developing nations have been requesting for over ten years. Despite having significantly smaller carbon footprints compared to wealthier nations, poorer countries are disproportionately affected by extreme weather events due to their geography, inadequate infrastructure, and limited resources.

The severe floods in Pakistan and the damaging drought in the horn of Africa, both occurring within the past year, are illustrations of extreme weather events that have been worsened by the climate crisis. These disasters have caused immense suffering for vulnerable communities, highlighting the potential benefits of having loss and damage funds available to assist those in desperate need. As the Earth’s temperatures continue to increase, occurrences like these are expected to become more common, requiring hundreds of billions of dollars annually for recovery efforts.

The primary points of disagreement revolve around the governance, contributions, and eligibility for accessing the fund.

Certain wealthy nations, such as the United States, have advocated for the fund to be managed by the World Bank, stating that it offers a pre-established framework for efficiently collecting and distributing cash. They argue that creating a new fund from the beginning would be a lengthier, more complicated, and expensive process.

However, numerous activists dispute this notion and believe that wealthy nations have a biased preference for the World Bank due to the increased level of influence they have as major contributors. They highlight the bank’s expenses, citing that another comparable fund was charged 24% of its funds as a “hosting fee” which covers administrative costs, including staff pension plans.

Obtaining financial support from the World Bank can be a slow and challenging process, with a majority of the funds being in the form of loans instead of grants. Additionally, there is a history of resentment towards the Bank’s lack of emphasis on climate finance, which resulted in the removal of the former president, David Malpass, who was appointed by former US President Trump.

According to Brandon Wu, the director of policy and campaigns at ActionAid, the stances taken by wealthy nations are completely unacceptable for a fund that is intended to assist developing countries and address the needs of vulnerable populations. Instead of negotiating in good faith to create a fund that would effectively support those in need, developed countries are prioritizing their own self-interests.

According to The Guardian, the United States does not see the World Bank hosting the fund as a non-negotiable demand, and the United Nations and other parties are confident that the issue of where to locate the fund will be resolved. A representative from a developing country, who is closely involved in the discussions, stated that this is not the primary concern.

There is a potential resolution to the debate over which individuals should have access to the fund. Many nations are in agreement that those most at risk in developing countries should be given priority. Certain governments argue that the fund should be available to all countries that were classified as developing in 1992, when the UN Framework Convention on Climate Change was adopted as the parent treaty for the 2015 Paris climate agreement.

This may result in countries like Saudi Arabia or the UAE, who are hosting this year’s Cop, being qualified even though they have a high per capita income and carbon footprint. However, it is probable that the definition of “most vulnerable” would specifically target the least developed countries.

The main dispute is expected to revolve around the financing of loss and damage. Advocates argue that wealthy nations should cover the costs due to their past contribution to emissions. This would primarily burden the US with funding, but the White House faces challenges as the Republican-led US Congress is likely to reject any efforts to increase climate financing.

The United States and other affluent nations are interested in expanding the ways in which they receive funding, possibly through the sale of carbon offsets and contributions from private companies. Developing nations have proposed various funding methods, including a frequent flyer fee for wealthy consumers in both rich and poor countries, or a charge on shipping, which is a major contributor to emissions. Gordon Brown, the former prime minister of the UK, has suggested implementing a windfall tax on profits from fossil fuels.

Numerous sources will likely be necessary, in various capacities, to cover the potentially hundreds of billions of dollars needed. However, the main conflict arises over the classification of certain countries, including China, India, South Korea, and major emerging economies, as well as petrostates such as Saudi Arabia, Qatar, Russia, and the host country UAE. These countries were all considered developing in 1992 and thus were not obligated to contribute funds to less affluent nations.

However, all of these countries are now significant contributors to greenhouse gas emissions. The emissions from China, India, and Russia have reached levels that are comparable to the combined emissions of European nations. Additionally, these countries have greatly profited from the fossil fuel industry. They also have much larger economies than the more susceptible countries that will receive assistance from the loss and damage fund.

Amina Mohammed, the deputy secretary general of the United Nations, stated that there is a new era emerging where funding for various initiatives, including climate-related ones, must come from a wider range of sources. This may cause tension among those who believe there is a responsibility to address past mistakes and those who believe the focus should be on moving forward.

It will be difficult to resolve this underlying conflict, as activists have expressed their determination to oppose any efforts to differentiate the stance of major economies like China from that of smaller and more vulnerable nations. Lien Vandamme, a leading activist at the Centre for International Environmental Law, stated that China and the G77 group of developing countries will remain united, and wealthy nations like the US, UK, and EU must take responsibility by providing financial support. These countries continue to refuse to acknowledge their obligation to compensate for the harm caused by their lack of action on climate change.

“This is inexcusable and only a drastic change in wealthy nations’ approach to these talks will allow for the fifth meeting to achieve what the fourth could not. A failure to deliver will not make the communities whose rights are at stake and who are entitled to remedy go away.”

Source: theguardian.com