COP28 achieved a major milestone on its day 1 itself as the countries reached a landmark deal to help the world’s poorest and most vulnerable countries pay for the irreversible impacts of climate disaster. The Loss and Damage Fund was first agreed upon during COP27, held in Sharm El Sheikh, Egypt. It became operational on November 30 following the agreement reached by parties during five transitional committee meetings. Germany and COP28 host UAE led contributions to get the fund for climate victims up and running.
“This fund will support billions of people, lives and livelihoods that are particularly vulnerable to the effects of climate change,” said COP28 president Dr Sultan Al Jaber. “I want to thank my team for all their hard work to make this possible on day one of COP28. It proves the world can unite, can act, and can deliver. Over the next two weeks, this presidency will work with parties to now deliver the highest-ambition response to the GST.”
UN Climate Change Executive Secretary Simon Stiell said that the news on the fund gives COP28 a running start. “Governments must use this momentum to deliver a truly ambitious outcome in Dubai,” he said.
Both the UAE and Germany announced $100million for the fund. Other major contributors are the UK, which committed £40million and £20million for other arrangements, and Japan, which contributed $10million. Though the US— world's largest economy—committed $17.5million, it was criticised as a meagre contribution by multiple parties.
A recent United Nations report approximates an annual requirement of up to $387 billion for developing countries to adapt to climate-driven changes.
The argument that the developed world has to take “historical responsibility” has often been raised, but the numerous specifics regarding the "loss and damage funds"— including the fund's size and administration—remain undecided so far.
The fund is now operational, and is designed to receive contributions “from a wide variety of sources”, including grants and cheap loans from the public and private sectors, and “innovative sources”. The World Bank is set to initially host the fund for four years, though many developed countries are not happy with it. All developing countries “particularly vulnerable” to the effects of climate change will be eligible to benefit from the mechanism. Nevertheless, this definition of vulnerability is not detailed in the text as of now.
Representatives from 24 countries will work together over the next year to decide which countries should contribute and how the money should be distributed.
During the press conference, questions were raised not just about the paltry contributions from the US, but also about the “absence” of India and China in the contributors’ list. In reply, Stiell said the pledging will continue over the next two days, with the Leaders' Summit. “I believe some countries would prefer to make those statements on the grander stage of the Leaders' Summit,” he said.