Developing countries could require trillions of dollars in aid in the coming decades to deal with climate-related disasters such as this 2022 flood in Pakistan. | Fida Hussain/AFP via Getty Images
By Zia Weise, Sara Schonhardt and Karl Mathiesen
The Paris Agreement was celebrated only eight years ago. If an agreement cannot be reached on the climate fund, which was seen as a major accomplishment at last year’s U.N. summit in Sharm el-Sheikh, Egypt, it could bring into question the ability of nations to address even more challenging issues when the COP28 meeting commences on Nov. 30.
Avinash Persaud, the chief negotiator for Barbados, expressed concern about the current situation, stating that “we have reached a critical juncture.” Talks to establish the fund failed last weekend, and if a resolution is not reached soon, it could jeopardize the success of COP. Persaud believes that there is not enough urgency among individuals to address this issue.
The previous year’s meeting, referred to as COP27, resulted in a deal to establish a fund for covering the expenses associated with loss and damage caused by climate change, also known as “loss and damage” in U.N. terminology. This delicate agreement was reached after facing opposition from the U.S., which has been the largest contributor of carbon dioxide emissions and has been hesitant to create any means for seeking compensation.
However, progress in determining the structure and leadership of the fund has been stalled as negotiations continue.
Developing countries are advocating for a mention of loss and damage, while the proposal suggests naming it the “Resilient Futures Fund.”
Negotiators are feeling pessimistic as they head into a series of meetings in Abu Dhabi next week, which may be their final opportunity to reach an agreement on important details before potentially causing issues for the main event in Dubai.
The chief negotiator for the U.N. talks under the Egyptian presidency, Mohamed Nasr, is cautioning that countries such as the United States and the European Union could potentially be held accountable for monetary damages if they do not commit to contributing funds for the fund’s resources.
He informed POLITICO that if this fund becomes a mere facade, it could reignite demands for accountability, acknowledging past actions, and reparation.
A shift towards volunteering
Discussions regarding the fund have become more tense in the past few weeks, and if there is a possibility of revisiting the issue of responsibility, it is expected to escalate tensions.
Industrialized nations such as the United States, which are responsible for the majority of greenhouse gas emissions in the Earth’s atmosphere, have historically opposed any discussions about loss and damage due to concerns of being held legally accountable for providing reparations to countries impacted by increasingly severe climate disasters. To protect themselves from this potential liability, they have worked to include statements in previous agreements, including the Paris Agreement, clarifying that loss and damage is not intended to assign blame or provide compensation.
Last year, the U.S. and the EU reached a mutual understanding for a fund. However, they also stressed the importance of including wealthy emerging economies, such as the Gulf countries or China, in contributing to the fund. These countries are hesitant to make any financial commitments or promises until the fund is operational.
The EU’s climate commissioner, Wopke Hoekstra, stated during a panel discussion in Brussels on Friday that establishing a loss and damage fund is a top concern for the bloc. However, he noted that the Europeans will not provide funding until all the specifics have been finalized. He added that once an agreement is reached on the structure and management of the fund, initial contributions may be feasible.
The US government has emphasized the importance of voluntary contributions and is advocating for a diverse range of sources, including philanthropies and non-governmental sources like voluntary carbon markets. However, the Biden administration faces a significant challenge in American politics as the Republican party controls half of Congress, making it incredibly difficult to allocate US tax funds to the cause.
Developing nations are concerned that the fund may rely on the generosity of wealthy countries if there is no formal commitment or acknowledgment of responsibility within the system.
Persaud, the representative from Barbados who co-chaired discussions on funding sources at the recent committee meeting, expressed that developed nations seem to be leaning towards relying on volunteerism. However, this approach has proven to be ineffective in addressing issues such as climate change.
2020 report found
A report from 2020 revealed that wealthy nations have not fulfilled their promise made in 2009 to provide $100 billion annually for climate finance by 2020.broken promise
This has greatly damaged the confidence in discussions about climate change.
Persaud suggested that developed countries could alter the course of the negotiations by offering financial contributions. They should come up with a specific amount and pledge to contribute it to the fund if it is approved.
In addition to finances, there are two major obstacles: determining the allocation of funds among developing nations and deciding where the fund should be located. The planned concluding meeting in October fell apart when the United States and other developed countries argued for the fund to be integrated into the World Bank, an institution in which they hold significant control as shareholders.
However, negotiators from both developed and developing countries have pinpointed the question of who should provide the funds as the most challenging to address as the committee reconvenes on November 3rd.
The COP28 presidency, growing more anxious, has arranged a late ministerial conversation on loss and damage to take place during the pre-COP meeting in Abu Dhabi on Tuesday. COP28 President Sultan al-Jaber, also the leader of the United Arab Emirates’ national oil company, expressed the importance of the committee producing a set of suggestions by early November.
It is possible for the amount to exceed trillions of dollars. Some have suggested a yearly “initial commitment” of $100 billion by 2030, similar to the iconic amount for climate finance.
The funding would come from more than just governments, according to Persaud. He stated, “I believe the approach recognizes that aid budgets from developed countries will not be the sole or primary source. It acknowledges that they should play a leading role, but also considers the use of creative new sources.”
Persaud deemed the reconsideration of responsibility to be unproductive, and other participants expressed apprehension that it could endanger the entire procedure.
However, according to Nasr, the Egyptian negotiator, developing nations were only willing to overlook the issue of responsibility on the condition that wealthy countries would eventually provide financial support.
During the 27th Conference of Parties (COP27), it was recognized that shifting the focus from liability and compensation to delivery and solidarity would facilitate discussions and garner support. This understanding was expressed by the speaker.
“Although the initial portion was mutually accepted and fulfilled, developed nations are hesitant to include a commitment to contribute and regularly replenish in the document.”
A non-viable option for the United States.
Washington has drawn a clear boundary when it comes to liability. The proposed fund emphasizes cooperation and facilitation, explicitly stating that it does not involve any responsibility or compensation. The U.S. has made it clear that they will not participate in discussions if this statement is removed.
Christina Chan, the U.S. representative on the committee, expressed strong disapproval during the meeting in mid-October that the idea of removing this language is even being considered. She stated that removing it would be unacceptable and would prevent any potential resolution.
Preety Bhandari, a senior adviser at the World Resources Institute, suspects that threats to reopen the issue are more of a negotiating tactic as countries vie to regain lost ground, in part by attempting to reinterpret what countries agreed to at last year’s climate talks.
“She mentioned that it seems like nothing is officially accepted until everything is ultimately agreed upon. While it may be an overused statement, if both parties are not willing to compromise, it appears that we are heading towards a standstill at this moment.”
According to Bhandari, the difficulty lies in the fact that any changes to the language regarding liability would have significant consequences for everyone involved.
Small island nations facing the threat of rising sea levels and severe storms may be impacted the most.
Aminath Shauna, the climate and environment minister of the Maldives, expressed that the matter of justice and compensation is complex. The Maldives, an island nation with 24 committee seats, is facing this challenge.
She is concerned that looking back at the language used in the Paris Agreement, which stated that the agreement does not hold anyone responsible or require compensation, could hinder the progress being made towards establishing a fund for loss and damage.
Shauna expressed, “We cannot remain stagnant in this situation. Despite being from one of the most vulnerable countries, we must progress.”
According to Bhandari, it is crucial for negotiators to present proposals during the upcoming committee meeting in order for the broader discussions in Dubai to be successful.
“If there is a second failure,” she stated, “it will create a highly tense situation at the COP, not just regarding this issue but also in regards to other issues.”
The discussions on the issue of loss and damage took on a more emotional tone on Sunday following the news of the passing of Bangladeshi scientist Saleemul Huq. Huq, who had been actively advocating for action against climate change for over thirty years and attended every U.N. climate conference, was a leading figure in urging wealthy nations to provide financial support for mitigating the inevitable consequences of climate change in countries like his own.
Earlier this year, he wrote a letter to the UAE organizers accepting their invitation to advise the COP28 presidency. In the letter, he stated that if the only outcome of COP28 is the mention of “progress” on the issue of funding loss and damage, it would essentially be a failure.