Observations from COP28 on the Loss and Damage Fund

Negotiations on the twenty eighth assembly of the Convention of the Events to the United Nations Framework Conference on Local weather Change (COP28) in Dubai, UAE, wrapped up early final week. A lot has been written concerning the “UAE Consensus” that was adopted on the ultimate day of COP28 and met with blended critiques. There was, nevertheless, an necessary resolution reached on day one of many two-week assembly concerning operationalization of the Loss and Injury Fund. Whereas the choice represents an necessary–and lengthy overdue–step ahead, there stays a lot work to be achieved.

Whereas there isn’t a formal UN definition of loss and harm, it’s typically understood to encapsulate local weather change impacts that can not be addressed by mitigation or adaptation efforts. For creating international locations and small island states, the implications of stronger storms, rising sea ranges, rising temperatures and different climate-related phenomena can be tough to endure, and the international locations who will probably undergo essentially the most are sometimes the least chargeable for local weather change. The idea of a Loss and Injury Fund via which Events present financial support to these in want implicitly acknowledges this inequity.

Although international locations are already struggling losses resulting from local weather change, the highway to a Loss and Injury Fund has been comparatively lengthy. The formal idea of Loss and Injury originated in 2013 at COP19 in Warsaw, Poland, with the institution of the Warsaw Worldwide Mechanism for Loss and Injury (WIM). WIM is the constituted physique created to “tackle loss and harm related to impacts of local weather change, together with excessive occasions and gradual onset occasions, in creating international locations which might be significantly susceptible to the opposed results of local weather change.” In 2019, at COP25 in Madrid, Spain, Events established the technical arm of WIM, the Santiago Community, to catalyze technical help for loss and harm. In 2021, at COP26 in Glasgow, Scotland, in response to rising requires financing, the Glasgow Dialogue was established to facilitate discussions surrounding the funding of loss and harm actions. The next yr at COP27 in Sharm El Sheikh, Egypt, Events agreed to ascertain a Loss and Injury fund and a Transitional Committee to make suggestions for operationalization at COP28. The Transitional Committee met 5 instances in 2023 previous to submitting a report back to the COP for consideration.

A decade after its first introduction, Events lastly operationalized the Loss and Injury Fund on the primary day of COP28. Through the opening plenary, the COP adopted a choice (FCCC/CP/2023/L.1) based mostly on the suggestions of the Transitional Committee. Key components of the choice included the creation of a brand new and unbiased secretariat and governing board, the designation of the World Financial institution as interim trustee and fund host for a four-year interval, and the approval of the Governing Instrument of the fund which gives elements to be thought-about in allocating assets. In the identical session the place the choice was adopted, a number of Events made notable funding pledges together with $100 million from the UAE, $100 million from Germany, £60 million from the UK, $17.5 million from the US pending Congressional approval, $10 million from Japan, and €225 million from the EU.

Operationalizing the loss and harm fund is a significant breakthrough and, given its fast completion on the primary day of COP28, it has been the main target of a lot constructive press. Nonetheless, it is very important acknowledge the weaknesses of the loss and harm resolution as effectively. Creating international locations have expressed doubts concerning each the long-term financing of the fund in addition to the World Financial institution’s function as interim trustee.

On the choice to make use of the World Financial institution as interim fund host for a interval of 4 years, at COP27 proponents included the US and EU who argued that utilizing a pre-existing trustee would enable for quick operationalization of the Fund, whereas opponents included the G77 and China Group who argued for an unbiased, stand-alone fund free from any bias. Within the eyes of the delegates of some creating international locations on the bottom at COP28, the World Financial institution has a historical past of charging unjust curiosity on loans to creating international locations, which isn’t a novel critique. Furthermore, the six largest World Financial institution shareholders are the US, Japan, China, Germany, the UK, and France, which doesn’t essentially create the impression of impartiality—68 organizations despatched a letter opposing the World Financial institution choice on these grounds.

At a COP28 facet occasion entitled, “Minimizing and Addressing Loss and Injury with Domestically Led Adaptation and Danger-Switch Financing Options,” hosted by the Joint Sustainable Growth Objectives (SDG) Fund, panelists acknowledged these critiques of the World Financial institution and pointed to the independence of the loss and harm board as a way for small island and creating nation delegations to offer oversight over the World Financial institution’s function within the Loss and Injury Fund.

In the case of long-term financing, whereas the pledges of quite a few donor Events made headlines at COP28, the truth is that these are one-time donations that can ultimately run out, but there isn’t a expiration date for the local weather change-induced losses suffered by creating international locations. This drawback was the subject of dialog amongst delegates on the bottom and potential options to the shortage of everlasting funding have been mentioned at a number of facet occasions, together with “Worldwide Local weather Solidarity Levies: Modern Funding Supply for the New Loss and Injury Response Fund” hosted by the Worldwide Centre for Local weather Change and Growth, Modern Finance Basis, and Oxford Local weather Coverage, which advocated for nationwide taxes imposed on aviation as a supply of Loss and Injury funding. On the beforehand talked about Joint SDG Fund occasion, a tax on aviation gasoline and insurance coverage have been amongst potential options floated as effectively. We might even see calls to ascertain a replenishment cycle and/or a long-term funding supply from Events and advocates within the coming weeks, and local weather finance on the whole is prone to take heart stage at COP29 subsequent yr.

In sum, operationalizing the Loss and Injury Fund is a key step in offering creating international locations with the required help because the impacts of local weather change develop into more and more dire, however additional steps are wanted to make sure the longevity and effectiveness of this fund. Whereas it is very important rejoice wins within the COP consensus course of, it’s equally necessary to do not forget that we’re simply getting began.