COP 28 Summit Approves Loss And Damage Fund
In a historic move on the opening day of the COP 28 summit, member countries have greenlit the operationalization of a groundbreaking Loss and Damage (L&D) fund aimed at compensating nations already grappling with the harsh impacts of climate change.
The COP 28 summit approved the operationalization of a groundbreaking Loss and Damage (L&D) fund, set to be housed at the World Bank but managed by an independent secretariat. This initiative has secured commitments totalling at least $450 million from various countries. However, this substantial sum falls short of the billions required to fulfil its crucial role.
First announced at COP-27 in Sharm El-Sheikh last year, the L&D fund’s journey involved five transitional committee meetings to achieve unanimous agreement on a text. COP-28 President Sultan Ahmed Al Jaber ultimately passed the motion, marking a significant step in the fund’s nearly three-decade-old conception.
As of Thursday, notable financial commitments include $100 million from the host country, the United Arab Emirates, $100 million from Germany, $17 million from the United States, approximately $50.6 million from the United Kingdom, and $10 million from Japan. The European Union has pledged an additional $145 million on top of Germany’s contribution.
Delegates praised the early agreement as a positive start, setting a good momentum for discussions in the days ahead. Simon Steill, Executive Secretary of the UNFCCC (United Nations Framework Convention on Climate Change), urged countries to build on this progress to address the goal of keeping temperatures below 1.5°C.
Representatives from nearly 160 countries, including heads of state, are expected to attend the World Climate Action Summit on December 1st, where statements will be made.
The World Bank will serve as the interim host for four years, operating by the principles of the UNFCCC and the Paris Agreement. All developing countries can apply for funds, and every nation is invited to contribute voluntarily. A percentage is earmarked for Least Developed Countries and Small Island Developing States.
A recent study by the University of Delaware estimates that loss and damage from climate change will cost around $1.5 trillion in 2022, underlining the urgent need for initiatives like the L&D fund. While the current structure lacks details on replenishment cycles, concerns have been raised about its long-term sustainability.
Harjeet Singh of the Climate Action Network International emphasized the historic decision but underscored the need to address underlying concerns. He pointed out potential pitfalls, including the World Bank’s hosting push and the lack of a clear financial mobilization scale.
India’s Environment Minister, Bhupendra Yadav, expressed gratitude for the UN Presidency’s facilitation in kickstarting the fund, highlighting India’s contributions during the transitional committee meetings. The global community now faces the critical task of ensuring the fund’s effectiveness and sustainability in addressing the challenges posed by climate change.
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