New Delhi, Oct 19 (PTI) Negotiations on Loss and Damage funding arrangements in Egypt reached a deadlock on Thursday with developed countries, especially the US, pushing hard to host the fund under World Bank.
Loss and damage refer to the impacts of climate change that cannot be avoided through adaptation.
For a considerable time, climate-vulnerable developing nations have been demanding that rich industrialized countries, responsible for a major portion of cumulative carbon emissions, compensate them for damages caused by intensifying storms, floods, heat waves, and rising sea levels, all exacerbated by climate change.
The UN climate talks (COP27) in Egypt’s Sharm El Sheikh last year achieved a major milestone by establishing a Loss and Damage Fund to help people recover from devastating climate impacts.
After the breakthrough at COP27, the UN formed a Transitional Committee to develop recommendations for operationalisation of the new fund and funding arrangements.
Despite three meetings, a high-level ministerial, and two workshops, no agreement has been reached on the key issues related to hosting of the fund and making it accessible to vulnerable communities and countries.
At the fourth and the final Transitional Committee meeting underway in Egypt’s Aswan, rich countries were seen forcing the World Bank as the option to host the Fund, instead of creating a new standalone Fund under the UN.
“The World Bank has no climate culture. It recently made climate part of its mission, and we have been fighting climate change since the Rio conference,” Pedro L Pedroso Cuesta, Chair of the Group of the 77 and China, said in an online press conference on the stalemate in the negotiations.
“The way in which the World Bank has been assisting countries in their development policies is not fit for the purpose in relation to what we’re looking for from this new climate facility,” he said.
Cuesta said that the US came to the meeting with a fixed idea — either it’s the World Bank or nothing.
Harjeet Singh, the head of global political strategy at Climate Action Network International, a network of civil society organisations, said the push for the World Bank’s involvement as a host of the Loss and Damage Fund – an entity notorious for exacerbating crises and perpetuating global inequality – is starkly inappropriate.
“Its track record of prioritizing shareholders over the disenfranchised is telling. Wealthy nations must confront their longstanding inaction and acknowledge their significant role in the current climate crisis. The world is watching, and history will remember those who obstruct progress,” he said.
Private sector capital can be leveraged and other multilateral financial institutions can be asked to contribute to the Fund if it’s operated by the World Bank as a facility. But the problem is the World Bank facility will offer loans rather than grants. This could lead to countries accumulating debt, said R Rashmi, former lead climate negotiator and distinguished fellow at The Energy Resources Institute.
Negotiations on loss and damage funding arrangements so far have highlighted stark disagreements between developed and developing nations regarding who should be eligible for the Loss and Damage Fund (LDF) and who should contribute to it.
Developed countries are advocating for a restricted definition of “most vulnerable” countries, limiting eligibility primarily to Least Developed Countries and Small Island Developing States. This approach excludes countries like Pakistan and Libya, which recently suffered substantial climate change-induced damage.
They also assert that all capable nations should contribute, with a focus on major emitters like India and China.
On the other hand, developing nations argue that the fund should be accessible to all developing countries impacted by climate change, particularly those hosting vulnerable communities. They contend that this aligns with principles of equity which ensures that countries’ efforts to combat climate change are viewed in light of their contributions to greenhouse gas emissions, historically and currently.
Experts from the Global South believe these actions indicate developed nations’ lack of commitment to operationalising the LDF at COP28.
They contend that the expansion of the contributor base, the reduction in eligible countries, and private sector involvement in loss and damage funding, as advocated by developed nations, undermine the agreement’s obligations.
They also say that conditioning funding on contributor base expansion contradicts existing obligations that require developed nations to provide finance to developing countries. PTI GVS ZMN
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