By Gloria Dickie and Valerie Volcovici
Countries took a significant step forward on Saturday toward establishing a fund to assist poor states affected by climate-related disasters, despite concerns from developing nations and the United States.
The creation of a “loss and damage” fund was hailed as a major breakthrough for developing countries during United Nations climate talks in Egypt last year, overcoming years of resistance from wealthier nations.
However, over the past 11 months, governments have struggled to reach a consensus on the fund’s specific details, such as funding sources and its location.
This week, a special U.N. committee responsible for implementing the fund held its fifth meeting in Abu Dhabi after a stalemate in Egypt last month. The committee aimed to finalize recommendations that will be presented to governments at the annual climate summit COP28 in Dubai in less than four weeks. The goal is to have the fund operational by 2024.
Representing a diverse group of countries, the committee resolved to recommend the World Bank as the trustee and host of the fund. However, this decision has sparked tensions between developed and developing nations. Developing countries argue that housing the fund at the World Bank, whose presidents are appointed by the U.S., would give donor countries excessive influence and lead to high fees for recipients.
To ensure the participation of all countries, it was agreed that the World Bank would serve as interim trustee and host of the fund for a four-year period.
Germany’s special climate envoy, Jennifer Morgan, expressed optimism about Berlin’s commitment to contribute to the fund and explore additional funding options. However, others were more pessimistic.
“It is a somber day for climate justice, as rich countries turn their backs on vulnerable communities,” said Harjeet Singh, head of global political strategy at nonprofit Climate Action Network International.
“Rich countries … have not only coerced developing nations into accepting the World Bank as the host of the Loss and Damage Fund but have also evaded their duty to lead in providing financial assistance to those communities and countries.”
In addition, the committee recommended urging developed countries to continue supporting the fund. However, the issue of whether wealthy nations should have strict financial obligations to contribute remains unresolved.
“We regret that the text does not reflect consensus concerning the need for clarity on the voluntary nature of contributions,” a U.S. State Department official told Reuters.
The U.S. sought to include a footnote clarifying that contributions to the fund would be voluntary, but the committee chair denied the request. The U.S. objected to this denial.
Sultan al-Jaber, who will chair the COP28 talks, welcomed the committee’s recommendations and expressed hope that they would lead to an agreement at COP28.
(Reporting by Gloria Dickie in London and Valerie Volcovici in Washington DC; Editing by Andrew Heavens)
