The Cop27 has established that the Fund losses and damages must be operating within 2023
Who must contribute and how much, who hosts it and where the money comes from. These are the three dossiers – very hot – on the table of the preparatory summit for the Loss and Damage Fund (Loss & Damage Fund) that takes place today and tomorrow. A decisive meeting to fix the necessary pieces to make it really operational during the Cop28 in Dubai, starting in less than a month. But after a year of discussions, the distance between rich and developing countries on how the mechanism that distributes climate resources to the most vulnerable countries should be made is still sidereal.
“The next meeting is a “decisive moment” that will determine the success or failure of the new Fund for losses and damages. For too long, rich nations have been hiding behind excuses, delaying necessary actions and letting vulnerable communities bear the brunt of climate impacts,” attacks Harjeet Singh of Climate Action Network, an NGO closely monitoring the climate negotiations. “We need to bridge the trust gap, make the fund operational and provide the necessary support to those who need it most. We cannot afford to fail, because the lives and livelihoods of millions of people are at stake,” he continues.
Disputes over the Loss and Damage Fund
The mechanism developed last year at COP27 was hailed as an epochal turning point. A step forward with which, finally, the more advanced economies recognized the need to play a greater role in providing climate finance to those most affected by climate change. The Sharm el-Sheikh agreement stipulated that by the next summit in the United Arab Emirates, delegates would have to file all the technical details to make the Loss and Damage Fund immediately operational.
read also COP27 by Sharm: historic agreement on loss & damage, but stutters on everything els
From the beginning, however, these behind-the-scenes works have been slowed by radically different interpretations of how the Loss & Damage mechanism works. The last meeting of the transitional committee, two weeks ago, was a bust. The meeting of 3 and 4 November is an attempt in extremis to reach a consensus on at least some of the fundamental issues.
One of the most slippery points continues to be who puts in the resources and how the quotas for each country are calculated. Rich countries want all donors to contribute equally. However, this does not reflect the historical responsibilities in anthropogenic climate change. This point was stressed by the developing countries, led by China through the G77 group: Beijing is putting its foot down and recalls that the climate negotiations are based on the principle of shared but differentiated responsibilities, so rich countries have to put more resources than others.
Other tensions revolve around which institution the Loss and Damage Fund should host. This is not a secondary issue: governance and room for maneuver depend on it. The rich countries would like to set him up in the World Bank, but the developing countries fear that this choice undermines his independence and prefer to establish him as a separate entity, subject to the authority of the COP process and with its own governance.