Coup de effect at the Dubai summit (United Arab Emirates). Countries have taken the first steps to compensate countries most affected by extreme weather events. The 28th UN climate change conference (COP28) yesterday adopted, in its opening session, the creation of the “loss and damage” fund, aimed at repairing the damage caused to the most vulnerable nations. “Today we made history, and on the first day of the conference,” said Ahmed al Yaber, CEO of the Abu Dhabi National Oil Company (Adnoc), exultantly. Al Yaber thus presented the agreement as a great victory for his presidency after his suitability to lead these negotiations had been questioned.
At last year's summit in Egypt, the countries agreed to launch this financial mechanism, but the details of its operation were left to a committee of experts to finalize, and these have now been made known.
The loss and damage fund will be under the purview of the World Bank. It is a solution that was not welcomed by representatives of countries in the Global South, who demanded an independent fund. But it has been considered the least bad solution. The World Bank will be the interim host for a period of four years.
The fund should raise “at least” $100 billion a year by 2030, although developing countries say real needs are closer to $400 billion annually.
Country contributions will be voluntary and developed nations will be “invited” to contribute but will not be obligated to do so. In addition, all developing countries will be able to access resources directly, with a minimum percentage allocated for the least developed and small island developing states.
Various civil society groups wanted rich countries to contribute according to their responsibility for historical emissions. But this has been ruled out. This criterion would place the US in danger of assuming the majority. Quotas are not established according to scales of equity based on their “historical responsibility” in warming. In return, China, India, South Korea and other emerging economies, and petrostates such as Saudi Arabia or Russia avoid the obligation of having to pitch in.
The birth of the fund was accompanied by the first commitments. The United Arab Emirates and Germany have each promised to contribute $100 million to the new fund, while the United Kingdom has pledged to allocate £40 million. The US has claimed that it will contribute 17.5 million to the fund. Japan promises 10 million dollars and the EU, 250 million (including Germany).
This fund opens the door to other future additional financing formulas, such as a traveler tax, a shipping charge or a tax on fossil fuel windfall profits.
Mohamad Adhow of Power Shift Africa, a climate think tank, called initial promises insufficient and said they will be “a drop in the ocean” compared to needs. “The work is far from over; We will not be able to rest until this fund is properly funded and begins to truly ease the burden on vulnerable communities,” said Pa’olelei Luteru, president of the Alliance of Small Island States.
For many organizations this is a historic achievement, as it will provide urgent aid to the most vulnerable communities living on the front lines of the climate crisis and who have contributed the least to causing it. “All rich, high-emitting countries now have a responsibility to step up and contribute to the fund,” said Joe Thwaites, chief financial officer at the Natural Resources Defense Council.
"In a commendable move, the conference host pledged $100 million to the fund. While these funds are valuable in kick-starting activities, it is important to recognize that the costs of rebuilding from the devastating effects of climate disasters amount to hundreds of dollars. billions of dollars a year," said Harjeet Singh, head of political strategy at the NGO Climate Action Network. Conservation groups and climate justice activists estimate that developed countries, given their significantly greater historical responsibility, must do more of their share on a scale proportional to their impact on planet-warming emissions.
On the other hand, the executive secretary of the Climate Change Convention, Simon Stiell, pointed out that humanity is taking “baby steps” in climate action and that 2023 will end up being “the hottest year” ever recorded. Stiell pointed to the central thrust of the Dubai debate: “If we do not point out the terminal decline of the fossil fuel era as we know it, we will be welcoming our own terminal decline. And we choose to pay with people's lives.”
Ahmed al Yaber predicted that the final declaration of the conference will include a mention of fossil fuels (oil, gas and coal), although he did not clarify in what sense. Al Yaber stressed that “science has spoken clearly and forcefully” about the need to limit global warming to 1.5ºC compared to pre-industrial levels. “Now is the time to act,” he said. And he addressed the diplomats: “Let's get to work, work efficiently, agree on the program and please move quickly on the text. There is no time to lose".
