After prolonged and heated negotiations, diplomats have largely agreed on a draft framework for a brand new UN fund to assist nations get well from the “loss and harm” brought on by local weather change.
Final yr’s COP27 summit in Egypt marked a victory for growing nations after they secured settlement on this fund – an thought many had been advancing for many years.
A transitional committee composed of members from developed and growing international locations was tasked with discussing all the things from who would pay into this fund to the place it might be positioned, forward of a remaining resolution as a result of be taken at COP28 in Dubai subsequent month.
Conferences overran this yr as members clashed over long-standing grievances. Creating international locations didn’t need to see the fund primarily based on the US-dominated World Financial institution and needed to make sure it was accessible for as a lot of the worldwide south as attainable.
Developed international locations needed to see funds coming from sources in addition to their public coffers, together with these of the wealthiest growing nations, resembling China and Saudi Arabia.
Ultimately, the ultimate committee assembly held final weekend in Abu Dhabi settled on a draft proposal that might see the brand new fund housed on the World Financial institution for at the least 4 years.
Neither developed international locations nor anybody else can be obliged to pay into the fund.
This proposal will now type the idea of a remaining resolution by leaders at COP28.
Whereas the committee’s suggestions had been adopted by consensus, a last-minute objection from the US gives an early indication that these talks on the UN’s upcoming local weather summit might not progress easily.
What’s ‘loss and harm’ and what was agreed at COP27?
“Loss and harm” is a time period used to explain how local weather change is already inflicting critical and, in lots of circumstances, irreversible impacts all over the world – notably in susceptible communities.
For instance, extra intense and frequent excessive climate occasions are inflicting the lack of human life and damages to properties and cropland.
The problem is recognised in Article 8 of the Paris Settlement, which says events “recognise the significance of averting, minimising and addressing loss and harm related to the adversarial results of local weather change”. Nevertheless, the Paris textual content didn’t commit international locations – developed or in any other case – to offering funds for loss and harm.
At UN local weather talks, the time period is usually utilized by nations and organisations to argue for developed, high-emitting nations to be held chargeable for losses incurred in poorer areas, that are the least chargeable for local weather change. (Due to this, the time period “loss and harm” is usually described as that means “local weather reparations”.)
On the COP27 local weather summit, all international locations agreed to arrange a fund to pay for loss and harm. This got here after a 30-year combat for such a fund led by small island states and growing international locations.
After a lot backwards and forwards between developed international locations and the G77 and China – a serious group of growing international locations representing six out of each seven individuals on the planet – a textual content was produced near the top of the summit that “determined” to determine a brand new loss-and-damage fund.
![Ragnotes_Loss_and_Damage](https://www.carbonbrief.org/wp-content/uploads/2023/11/unnamed.png)
This identical textual content mentioned {that a} “transitional committee” ought to be established, devoted to arising with a plan for the way the fund would work in follow.
It added {that a} resolution “associated to the brand new funding preparations” ought to be adopted “no later than at COP28”.
It was additionally determined that the committee ought to be composed of 24 members, together with 14 members from growing international locations and 10 from developed nations.
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What progress has been made in organising a loss-and-damage fund since COP27?
The transitional committee held 4 scheduled conferences and two workshops in Egypt, Germany, Thailand and the Dominican Republic throughout March-October 2023.
After the failure of the fourth assembly to achieve consensus, it additionally held an emergency fifth assembly in Abu Dhabi from 3-4 November 2023.
The committee’s activity was to give you a sequence of suggestions for the loss-and-damage fund that would then be accredited by leaders at COP28.
This included establishing which monetary sources would feed into the fund, what sort of actions it might help and the way it might work alongside present funds. The suggestions additionally lined the place the fund can be positioned and the way it might be structured and ruled.
Over the course of those conferences, nations and civil society teams submitted proposals for the fund. These concepts had been assessed by the committee and, finally, fed right into a sequence of paperwork that had been topic to additional scrutiny and debate.
As talks entered further time in Abu Dhabi, the committee co-chairs offered members with what considered one of them, Outi Honkatukia of Finland, known as a “take it or depart it package deal”. This tried to distil all of the competing views right into a viable set of suggestions that would type the idea of a COP28 resolution.
After passing up alternatives to object earlier on, US committee member Christina Chan raised a last-minute concern about language “urg[ing]” developed international locations to help the fund.
All through the talks, the US had persistently pushed again towards any language that compelled developed international locations to pay into the fund. (Whereas “urge” is in the direction of the stronger finish of the lexicon of UN authorized drafting, it doesn’t, the truth is, suggest compulsion.)
Chan requested for this textual content to be bracketed, indicating it had not been resolved.
The co-chairs reasoned that every one members had objections to the ultimate textual content for numerous causes, however the committee had already reached consensus and it was too late to reopen negotiations. “As soon as we begin bracketing, that doesn’t cease,” Honkatukia instructed the assembly.
Given this, Chan mentioned the US didn’t view the ultimate resolution as reaching consensus. Teresa Anderson, world lead on local weather justice at ActionAid Worldwide, tells Carbon Temporary that the US’s “forceful objections to the transitional committee’s suggestions recommend that this textual content may not sail easily by COP28”.
![@brandoncwu on X: "Potentially important side note: US OBJECTED to #TC5 outcome, saying it's "not a consensus text w/o my consent," but AFTER it'd already been gaveled."](https://www.carbonbrief.org/wp-content/uploads/2023/11/twitter.com_brandoncwu_status_1720881726732247525-2-1024x290.png)
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Why are international locations divided over the brand new fund?
Tensions ran excessive all through the 5 transitional committee conferences as long-standing arguments between representatives from developed and growing nations had been revisited.
Creating nation committee members reportedly threatened to stroll out, accusing a small group of countries – notably the US – of pushing them right into a “Faustian cut price”, involving many compromises, with the intention to make progress on the loss-and-damage fund.
Beneath are a few of the key areas that sparked divisions inside the committee.
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Who would obtain cash from the fund?
At COP27, nations agreed to create the fund to help “growing nations, particularly these which are notably susceptible” to local weather change. Nevertheless, the interpretation of “notably susceptible” remained some extent of competition.
EU committee members, for instance, urged that the fund ought to solely serve least developed international locations (LDCs), small-island states and “different notably susceptible international locations primarily based on particular eligibility standards”.
Members of the G77 and China resisted what they perceived as efforts to slender the main focus of the fund. In an announcement launched in the direction of the top of the fourth assembly, Cuban G77 chair Pedro Pedroso Cuesta mentioned:
“We should be sure that the executive preparations of the fund don’t impede direct entry to all growing international locations notably susceptible to local weather change.”
Sherry Rehman, former local weather minister of Pakistan and G77 chair at COP27, instructed a press convention that the fund ought to be “extra inclusive” – citing flood-struck Pakistan and Libya as middle-income nations that may not be capable to entry it, ought to extra restricted standards be adopted.
The ultimate textual content agreed by the committee doesn’t specify which international locations can be eligible to obtain funds. As a substitute, it says the fund’s board would develop a “useful resource allocation system”, primarily based on the accessible proof and with a minimal proportion allotted to LDCs and small islands.
![People look for survivors after a flash flood in Derna, Libya on 13 September 2023.](https://www.carbonbrief.org/wp-content/uploads/2023/11/2RTM719.jpg)
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Who would contribute to the fund?
Presently, solely a small group of “Annex II” international locations, which had been deemed “developed” when the unique UN local weather treaty was agreed in 1992, are obliged to supply local weather finance.
These events have persistently failed to satisfy their present climate-finance pledges to growing international locations.
Nevertheless, neither the 1992 local weather conference nor the Paris Settlement say who ought to give cash to pay for local weather change loss and harm.
The US and European nations have burdened the necessity to share the burden with wealthier rising economies – particularly singling out China and Gulf states, resembling Saudi Arabia. UK local weather minister Graham Stuart instructed a UN ministerial assembly in September:
“It should merely not be attainable to ship what is required if we keep trapped in outdated classes from many years in the past and we should escape of this to get a optimistic end result at COP28.”
Developed international locations additionally say that scaling up the fund sufficiently would imply opening it as much as contributions from non-government sources, together with the non-public sector and humanitarian teams. (See: What choices are being thought of to boost cash for loss and harm?)
Creating international locations will not be solely against drawing finance from this “mosaic” of funding sources. Nevertheless, as one joint submission by committee members from growing international locations states, they need to preserve the main focus totally on grant-based finance from developed international locations.
Referencing local weather finance extra broadly, the Saudi Arabian authorities voiced its issues in an announcement delivered on the pre-COP occasion in Abu Dhabi and seen by Carbon Temporary. The assertion mentioned Saudi Arabia anticipated “those that have clear obligations to come clean with them and never try to move on the baton to different international locations or entities outdoors the method”.
Brazilian diplomat Matheus Bastos, representing the G77 and China, known as for language reflecting the “ideas and provisions” of the UNFCCC and the Paris Settlement.
He mentioned the perform of this may be to make it clear, as these treaties do, that developed international locations are obliged to supply local weather finance. Within the view of the G77, this prolonged to the “full prices incurred” in growing international locations, together with not solely mitigation and adaptation but additionally loss and harm, Bastos added. The US mentioned it might not settle for this textual content.
Finally, the ultimate suggestions wouldn’t oblige developed international locations to pay into the fund. Additionally they point out a “vast number of sources of funding”.
Developed international locations are requested to “take the lead” in offering start-up finance for the fund, reasonably than loss-and-damage reduction.
As well as, the beneficial textual content “urge[s]” developed international locations to “proceed to supply help”, whereas different international locations can be topic to a weaker exhortation “enourag[ing]” them to do the identical “on a voluntary foundation”. (That is the factor that the US raised its last-minute objection to because the assembly got here to an in depth.)
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The place would the fund be positioned?
One main situation blocking progress was the situation of the loss-and-damage fund.
The US and the EU needed to see the fund hosted by the US-based World Financial institution, a proposal that G77 and China members strongly opposed.
They argued that World Financial institution finance is predicated not on grants however on loans, which aren’t fascinating for debt-burdened international locations within the world south. Additionally they mentioned the financial institution is just not set as much as enable quick, direct entry of the type required when coping with local weather disasters.
As well as, they mentioned it might not be accountable to all events, as a result of dominance of the US – its largest shareholder – and different main donors in decision-making.
Diann Black-Layne, a committee member representing the Alliance of Small Island States (AOSIS) mentioned the World Financial institution would cost a internet hosting payment of 17%, which she described as “freeway theft…pure gangster behaviour”:
“[That] signifies that the most important beneficiary of this fund would be the World Financial institution. The ten,000 staff of the World Financial institution will get extra money from this fund than the 63 million individuals of the inhabitants of AOSIS international locations.”
(This sum, which others have positioned at 24%, refers to administration prices taken from the fund’s secretariat and is, due to this fact, not a portion of the entire cash flowing into the fund. In accordance with the Loss and Injury Collaboration, it might quantity to 1-2% of complete funds.)
A coalition of practically 70 US NGOs wrote an open letter to the US negotiating crew stating that “the world doesn’t want one more channel for worldwide finance that’s donor-driven and unaccountable to communities within the world south”.
The World Financial institution issued an announcement pushing again towards such criticism and emphasising that it could possibly be versatile in the way it allowed international locations to entry loss-and-damage funds.
(This dispute remembers arguments on the 2009 COP15 local weather talks in Copenhagen. There, the so-called “Danish textual content” – which was by no means adopted – would have “hand[ed] efficient management of local weather change finance to the World Financial institution”, the Guardian reported on the time.)
Creating international locations argued as an alternative for a brand new, impartial entity working underneath the monetary mechanism of the UN local weather conference itself.
This might be just like the Inexperienced Local weather Fund (GCF), which is overseen by a 24-person board that features an equal variety of developed and growing nation representatives.
After this dispute prevented consensus on the fourth committee assembly, growing international locations got here to the ultimate assembly stating that they’d settle for the World Financial institution because the host on an “interim” foundation. Committee members burdened that they had been making a “enormous concession” in doing so.
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Some developed nation members additionally mentioned they needed to see a transparent pathway to maneuver the fund out of the financial institution inside two years.
Ultimately, the committee agreed to a textual content that might set up the World Financial institution as an interim host of the fund for 4 years. It included circumstances resembling permitting communities to entry small grants and offering entry to international locations that aren’t World Financial institution members.
Laura Schäfer, a senior advisor in local weather threat administration at Germanwatch, tells Carbon Temporary that whereas these parts are promising, they need to even be “primary circumstances” for a loss-and-damage fund.
She says there stay issues that the World Financial institution will find yourself being the fund’s everlasting dwelling, a problem that has confronted different funds that had been meant to be housed there quickly:
“There isn’t a exit technique outlined within the textual content, so this principally means if the World Financial institution performs nicely and fulfils all of the circumstances set, will probably be the host even after 4 years.”
One of many key calls for of growing international locations was that, wherever the loss-and-damage fund ended up being primarily based, it might have the standing of a standalone entity underneath the UNFCCC. Nevertheless, civil-society teams mentioned the ultimate language on this within the textual content was unclear.
The GCF, seen by some as a mannequin for the brand new fund, is clearly designated as an “working entity” underneath the UN local weather conference’s monetary mechanism. Against this, the proposed textual content for the World Financial institution-based loss-and-damage fund describes it solely as being “entrusted with the operation of the monetary mechanism”.
This “considerably murky” language is predicted to face authorized scrutiny within the weeks forward of COP28.
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Different points
In an earlier draft textual content launched on the fourth assembly, developing-country committee members disputed a line stating that the fund “doesn’t contain legal responsibility or compensation”.
This has lengthy been a elementary situation for the US, specifically, as a result of it doesn’t need to be held legally accountable for its excessive historic emissions.
US committee member Chan instructed different members it was “completely unacceptable” that this was seen as “some extent of competition”:
“This was a key piece of the understanding that led to the settlement for this agenda merchandise at Sharm el-Sheikh.”
She mentioned that if this textual content was eliminated, “we don’t see a pathway to an end result” on the fund general. This language remained within the remaining suggestions.
Civil society teams additionally raised issues concerning the removing of language committing to human-rights protections from the ultimate suggestions.
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How a lot cash is required to take care of loss and harm?
Creating-country transitional committee members made a submission in September calling for “at the least” $100bn a yr in loss-and-damage funding by 2030.
They cited a UN-commissioned report by the Unbiased Excessive-Degree Skilled Group on Local weather Finance, which says “latest occasions recommend [costs] could possibly be as excessive as $150-300bn by 2030 to deal with fast impacts and for subsequent reconstruction”.
The knowledgeable report additionally emphasises the uncertainty of those figures, including that local weather fashions “possible underestimate” loss-and-damage prices in growing international locations.
Certainly, the knowledgeable group’s figures are in the direction of the decrease finish of present estimates. Their report cites different research as inserting the prices of “residual damages” from local weather hazards far greater – as a lot as £290-580bn yearly in growing international locations by 2030.
With this in thoughts, growing nation representatives emphasised {that a} £100bn objective “is just not meant as a ceiling, however reasonably at least dedication.”
Against this, US and EU submissions didn’t again any particular targets.
A draft of the ultimate end result, launched on the fourth assembly in October, included a piece titled “scale”, with the growing international locations’ proposal in sq. brackets, that means it had not but been agreed by all events.
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Nevertheless, US committee member Chan mentioned that she wouldn’t settle for such a determine within the doc. “This isn’t a part of our mandate, it’s not half of what’s within the Sharm resolution,” she mentioned.
Finally, any reference to the size of funding was scrubbed from the ultimate suggestions.
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What choices are being thought of to boost cash for loss and harm?
One of many transitional committee’s targets was to “bear in mind the panorama of establishments and options related to responding to loss and harm”.
As a part of the deal that emerged from COP27, international locations commissioned the UNFCCC secretariat to assessment present loss-and-damage funding and establish “gaps present inside the panorama”.
The secretariat launched a synthesis report summarising its findings in Might 2023, which has fed into the choices made by the committee.
It identifies a wide range of present sources which are related for tackling loss and harm, together with adaptation funds and insurance coverage services.
In the meantime, scientists and civil society teams have proposed various sources for loss-and-damage funds, resembling taxes or levies on fossil fuels and world transport.
One paper suggests allocating lots of of billions of {dollars} in “local weather reparations” fees to fossil-fuel majors resembling, for instance, Saudi Aramco and ExxonMobil.
Earlier variations of the transitional committee’s suggestions mirrored a wide range of potential sources, once more in sq. brackets. These included non-public entities, NGOs and “particular drawing rights (SDRs), levies, voluntary carbon market or worldwide pricing mechanisms”.
Nevertheless, the query of funding sources is contentious as, broadly talking, growing international locations have tried to maintain the emphasis on grant-based finance from developed international locations.
Developed international locations, in the meantime, say that “revolutionary” new sources have to be explored to boost cash on a ample scale.
Talking on the fourth committee assembly for the G77 and China, Brazilian diplomat Bastos instructed fellow committee members that they’d “repeatedly requested for deletion” of language round elevating cash for the fund from the voluntary carbon market and different pricing mechanisms.
The ultimate advice textual content doesn’t embody a lot element on sorts of funding, however mentions a “vast number of sources”, in addition to saying will probably be open to public, non-public and “revolutionary” contributions. It additionally specifies that it ought to be open to receiving funds from philanthropic foundations.
It says the fund’s board will put together a technique to “mobilise new, extra, predictable and satisfactory monetary sources from all sources of funding”.
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How might international locations declare cash from the loss-and-damage fund?
As with many features of the fund, the query of how international locations might truly declare cash after experiencing loss and harm remains to be removed from being answered.
Historically, international locations entry UN local weather funds by submitting prolonged challenge proposals in a course of that sometimes takes a number of years.
For the loss-and-damage fund, some international locations are as an alternative calling for a “trigger-based mechanism” to permit them to say funds instantly within the wake of maximum climate occasions, explains Zoha Shawoo, a scientist engaged on loss and harm on the Stockholm Setting Institute (SEI). She tells Carbon Temporary:
“One thing like that would work if there may be a right away restoration and reduction window. However we all know that developed international locations have been saying that that’s largely lined by humanitarian support, so perhaps the fund ought to focus extra on medium- and long-term restoration.”
There are additionally nonetheless query marks round what kind of losses and damages international locations would be capable to declare for.
Loss and harm may be brought on by fast local weather impacts, resembling extra intense and frequent excessive climate occasions, in addition to impacts that step by step worsen over time, resembling sea degree rise and the retreat of glaciers.
The examine of how local weather change is affecting the probability and severity of maximum climate occasions is called “attribution” science.
Attribution is enjoying an more and more necessary position in proving legal responsibility in local weather court docket circumstances. For instance, a latest landmark court docket case gained by younger local weather activists in Montana relied closely on attribution science.
This has prompted some to query whether or not attribution might play a task in serving to international locations to make claims from the loss-and-damage fund.
Nevertheless, Shawoo notes it is probably not preferable for developed or growing international locations to make use of attribution science in deciding who ought to entry loss-and-damage funding:
“First, developed international locations is probably not snug with being held accountable for explicit losses. However then I believe it might probably even be a burden on growing international locations to should show {that a} sure occasion is because of local weather change. So I don’t suppose both facet would need that.”
There nonetheless could possibly be a task for attribution science in serving to to supply proof for the claims of growing international locations nevertheless, she provides:
“Speedy attribution research might present extra proof that growing international locations might use to again up their claims and entry funding. Not a proper requirement, however simply one thing to provide them extra leverage.”
To this point, there was little cross-talk between attribution scientists and people concerned within the UN course of for operationalising the loss-and-damage fund, Dr Izidine Pinto, a scientist from the World Climate Attribution initiative, tells Carbon Temporary:
“Proper now we’re separate as a result of nobody is aware of how the loss-and-damage fund goes to work.”
He provides that attribution might solely be capable to play a restricted position in figuring out how a lot cash international locations ought to be capable to declare from the loss-and-damage fund:
“Attribution research are only one facet of the coin. Attribution is saying that the quantity of rainfall or warmth was made extra possible by local weather change. However vulnerability is the opposite facet of the coin, as a result of the identical quantity of rainfall can destroy a home in area A however not B. So it’s very tough to simply deal with attribution with out taking a look at vulnerability and publicity.”
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