By Yara Rizk/The Africa Report
Posted on December 19, 2023 08:22
Presented as the major initiative of COP28, the loss and damage fund could be a transformational element for developing countries. But more work still needs to be done.
COP28 opened in Dubai on 30 November with a great deal of enthusiasm and hope, but it ended on 12 December in a much more humble frame of mind. The driving force behind this initial momentum was the creation of the loss and damage fund on the major summit’s very first day.
“We have made history,” said Sultan Al Jaber, COP28 President and the United Arab Emirates’ Special Envoy for Climate Change, congratulating himself on the “unprecedented, phenomenal and historic” speed of the decision.
A transition committee made up of delegates from 24 countries had been working intensively over the past year to define the practical arrangements. Contributed amounts so far total under $1bn, far short of estimated global needs exceeding $500bn yearly.
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According to Yamide Dagnet, director for climate justice at US billionaire George Soros’s foundation The Open Society as well as the co-founder of the consortium Allied for Climate Transformation by 2025, “Such a breakthrough, right at the opening of the conference, is exceptional and impressive.” She spoke to us about the fund’s characteristics and missions.
The Africa Report: What will the loss and damage fund be used for?
Yamide Dagnet: This fund is the result of an initiative adopted last year at COP27 in Sharm el-Sheikh. It’s intended to be both symbolic and useful. It’s symbolic because it sends out a strong message of solidarity, which is essential to ease the tensions between the countries of the North and the countries of the South in the run-up to the COP – tensions that have been exacerbated by the failure of developed countries to keep their promises. This fund formalises developed countries’ recognition of their historical responsibility for climate change. It will provide significant support to vulnerable nations, those most affected by greenhouse gases and, at the same time, least responsible for their emissions.
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The fund is also useful because it will provide direct financial assistance to eligible countries. The objective is to facilitate repair and reconstruction when natural disasters occur, to support adaptation measures designed to increase resilience in the face of climate change, and to encourage the implementation of preventive strategies.
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Following discussions, an agreement was reached on 4 November and confirmed in Dubai, stipulating that the World Bank would manage the fund for a transitional phase of four years. What do you think, given that this provisional solution is being criticised by developing countries?
As you made clear, this is a provisional solution. The provisional must not become permanent. Developing countries are calling for the fund to be independent because they fear that its positions will not be balanced and that it will favour the member countries of the World Bank.
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For the resolutions to be fair and equitable, representatives from both developing and developed countries must have equal weight in the decisions. If this principle is respected, the very structure of the World Bank will encourage the rapid establishment of this fund and effective capitalisation. Judging by our experience with the Green Climate Fund, which is autonomous, the establishment of the loss and damage fund could take a long time. So the compromise adopted for the sake of efficiency seems appropriate in the short and medium term.
Which countries should be given priority for accessing and financing the fund?
The committee has specified that the fund will target “particularly vulnerable” developing countries. However, the criteria defining this vulnerability have yet to be defined. Generally speaking, this category includes the least developed countries, which the UN defines according to their GDP and various human development indicators. This classification currently covers 46 nations, including Benin, Burkina Faso, Mali, Senegal and Niger, all of which have been hard hit by climate change.
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The current directives merely provide a strong incentive for developed countries, which have historically been major emitters of greenhouse gases, to contribute to the financing of the fund. They are under no obligation to do so. This situation is worrying, especially given the disappointing track record of the rich countries in terms of climate financing: the financial commitments they made nearly 15 years ago have still not been fully honoured.
At COP28, the first financial contributions were announced. To set an example, the United Arab Emirates, host of this major climate conference, promised to allocate $100m to the fund. They were quickly followed by the European Union, which wants to contribute $242.6m, the US ($17m) and Japan ($10m). Is this satisfactory?
It’s worth comparing to the Green Climate Fund, which was adopted in 2009 with an initial modest capitalisation of $10m. Today, we are starting with much higher commitments, potentially close to $800m. This is certainly a promising start, but it needs to be seen in the context of global needs, which are estimated at $580bn a year. Africa alone, which is particularly vulnerable to climate change, needs $2.8trn between now and 2030 to deal with the situation.
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So we’re still a long way from the target, especially as no minimum amount has been set. In my opinion, it would be wise for this fund to collect at least $100bn in the long term if it is to be effective.
What conclusions do you draw from the 28th edition of COP?
Both the opening and closing of the COP show that significant, albeit imperfect, progress has been made in our “directional shift” towards more sustainable and equitable economies. It does not mark a conclusion, but the beginning of a complex and demanding implementation phase that will pave the way for profound and fair change. However, the mobilisation [of nations] must be collective and balanced.
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It is crucial to stay vigilant, demonstrate creativity and responsibility, and strengthen solidarity and commitment at all levels. This also means actively promoting human rights and creating the conditions for prosperity that can be shared by all.
