A recently agreed “loss and damage” fund in which developed countries would pay for climate damage suffered by vulnerable developing counterparts lacks both details and actual funding, casting questions as to whether it is just a symbolic breakthrough.
Developing nations responsible for years for the least amounts of climate pollution have called for such a fund, which has been opposed by the United States and other wealthy countries.
That changed over the weekend when nearly 200 countries agreed to launch a new fund at the United Nations climate change conference (COP27) in Sharm el-Sheikh, Egypt.
The deal says the fund will help developing countries respond to “economic and non-economic losses and damages associated with the adverse effects of climate change, including extreme weather events.”
The deal provides no cash and no organizational structure, he said those details will be worked out in the coming months. Create a “transition committee” made up of representatives from 24 countries who will be tasked with finding sources of funding and establishing the structure and governance of the fund.
“A loss and damage fund has been established and that is important in its own right, but it’s an empty ship,” Morgan Bazilian, a professor of public policy at the Colorado School of Mines, told The Hill.
Despite such skepticism, some advocates have expressed optimism, arguing that getting to this point represents major progress after years of stagnation.
“This time there was a huge step forward in getting the United States and other traditional blockers to stop blocking,” said Jean Su, director of the energy justice program at the Center for Biological Diversity.
He acknowledged that there are still “big questions,” including “whether the funding will actually come out,” but said it ultimately gave “vulnerable communities around the world a glimmer of real hope.”
Bazilian said it was good that COP27 provided a forum for civilian activists to make their voices heard, saying they led to the creation of the fund.
But he expressed skepticism that the United Nations Framework Convention on Climate Change (UNFCCC) – the body responsible for the COP summits – would be able to fill what is currently an “empty vase”.
“The UNFCCC hasn’t proven very effective building and deploying these kinds of buckets,” said Bazilian, who previously worked as an energy specialist at the World Bank.
Rich countries have failed to deliver on their $100 billion pledge made in 2009 at another UNFCCC summit. That pledge was to provide that amount each year to less wealthy nations by 2020.
In the past, several European countries have said they are willing to contribute to losses and damages more widely. China has also indicated a certain willingness to contribute.
“We must ensure that the countries and companies most responsible for the climate crisis make the greatest contribution,” said Yeb Saño, executive director of Greenpeace in Southeast Asia.
Saño said funding is needed not only for losses and damages but also for adaptation and mitigation efforts. He also urged rich countries to “uphold current pledges of $100 billion a year.”
US money for the fund looks dubious given the divided government expressed midterm. A House now controlled by the GOP would need to allocate money to the fund along with a Senate that Democrats only tightly control.
“Insanity. This wasn’t even on my list of the million best things the United States should do with money we don’t have,” Sen. Kevin Cramer (RN.D.) said in a written statement his office said. shared with The Hill when asked for his thoughts on the deal.
“Congress has not given any authority or appropriations for this global climate repair fund,” he added. “The facts are, America is a leader in reducing global greenhouse gas emissions. Why apologize for our excellence when we can export our technology and make a tangible difference?”
Come on, from the Center for Biological Diversity, he said that since the United States is historically responsible for more emissions than any other country, it is important for the nation to contribute.
“Given where Congress is right now … we’re probably not in the best position … for next year, but that doesn’t mean we won’t have hopes for more funding for it after that,” he added.
The fund will face other challenges if the money materializes, including how to agree which countries should receive funds and how to distribute money.
The deal is ambiguous, saying it will seek to help countries that are “particularly vulnerable to the adverse effects of climate change” without offering a definition.
Brandon Wu, director of policies and campaigns at anti-poverty organization ActionAid USA, said such “flexibility” could be a good thing, since “there are vulnerable people everywhere” in developing countries.
The loss and damage fund differs from other UN-sponsored initiatives in that it will seek money from “a wide variety of sources,” including development banks.
“This opens the door to a number of things,” said Wu, who mentioned international aviation and shipping taxes or a potential tax on fossil fuels. Traditional donor governments, such as the European Union and the United States, have insisted on including this measure, according to Reuters.
The agreement also specifically contains a provision to “invite” global financial institutions to consider contributing to such financing agreements. This provision specifically mentions both the World Bank Group and the International Monetary Fund as potential contributors.
In response to the invitation, a World Bank spokesman said that “there has been broad recognition of the need to increase funding for global public goods, especially climate action,” at the recent October meetings of the group, but did not directly address the loss and damage fund.
Just last week, the World Bank Group announced a “Global Shield Financing Facility” to help developing countries access more finance for climate-related disaster recovery.
The International Monetary Fund did not respond to a request for comment.
Bazilian, of the Colorado School of Mines, pointed out that the bank has a “hundreds of pages long climate change strategy” in its loan protocols.
“They’re always participating and they’re making those investments, but not at levels that an outsider seeing a chart thinks they should,” Bazilian told The Hill.