Global leaders approve loss and damage fund on COP28's opening day

COP28 President Sultan Ahmed Al Jaber addresses the opening ceremony of the 28th session of the Conference of the Parties to the United Nations Framework Convention on Climate Change, or COP28, in Dubai, the United Arab Emirates, Nov. 30, 2023. [Xinhua]

UN climate talks in Dubai kicked off with the approval of a fund for loss and damage.

On the opening day of COP28, global leaders agreed to establish the long-awaited Loss and Damage Fund, marking a significant victory for COP28.

This win comes after three decades of advocacy by small island states, emphasizing the fund's critical role in addressing climate-related losses and damages.

The Loss and Damage Transitional Committee, following five meetings this year, overcame the impasse between developed and developing countries on key issues like the World Bank's role and mechanisms such as direct access.

The fund, with an ambitious target of USD100 billion per year by 2030, received an initial boost with pledges totaling USD500 million on the first day. Notable contributions include USD100 million each from the UAE and Germany, USD40 million from the UK, USD17 million from the US, and USD10 million from Japan.

Avinash Persaud, Emeritus Professor of Gresham College in the UK expressed the essence of the fund, stating, "That's about adapting. This is the crisis that has happened. Losses and damages have happened, whether extreme weather or slow ones and now we need to rebuild."

Persaud emphasised the fund's primary goal of rebuilding low-income housing and infrastructure destroyed by climate-related events.

Acknowledging the role of the World Bank, Persaud, mentioned its potential interim hosting of the fund, subject to independent performance reviews. Conditions include eligibility based on the event taking place, rapid response, and a grant-based approach.

The Loss and Damage Fund represents a critical component in a new international climate finance system. While developed country governments are expected to lead in supporting the fund, Persaud, stressed the importance of broad, innovative funding sources. The fund's openness to receiving contributions from any source aims to ensure its sustainability.

Mohamed Adow, Founder and Director of Powershift Africa, expressed optimism about the fund's establishment but raised concerns about the lack of hard deadlines, targets, and obligatory contributions from rich, high-polluting nations.

Joab Okanda from Christian Aid highlighted the need for real financial commitments to fill the fund, urging countries to pledge substantial amounts, not just for the secretariat but to fund the core objectives.

Grace Ineza, Global Coordinator of Loss and Damage Youth Coalition welcomed pledges but emphasized the need for clarity on maintaining finance for future generations.

Linda Kalcher, Executive Director of Strategic Perspectives, commended the swift adoption of the fund but stressed the importance of leaders pledging money to support vulnerable countries.

Harjeet Singh, head of global political strategy at Climate Action Network International, acknowledged the historic decision but raised concerns about the World Bank's hosting and the absence of a defined replenishment cycle, emphasising the need for affluent nations to meet their financial obligations proportionately.

As COP28 progresses, all eyes are on global leaders to translate pledges into meaningful action, ensuring the Loss and Damage Fund becomes a robust and sustainable mechanism for addressing the impacts of climate change on vulnerable communities.

As COP28 talks progress experts observed that the focus remains on the adequacy, speed, and accuracy of the Loss and Damage Fund in providing immediate relief and recovery for the most vulnerable populations affected by climate-related events.

“The fund's success will be measured by its ability to quickly channel funds where needed and contribute to rebuilding trust in climate finance mechanisms,” they observed.