Ministers fail to progress loss and damage talks

With just over two months to go until the 28th U.N. Climate Change Conference, or COP 28, the world remains divided over how to establish a loss and damage fund to help pay for climate disasters — and the latest talks have descended into further clashes. Key differences around the fund’s design — particularly who should pay in and who should receive money — were highlighted throughout a ministers meeting held at the United Nations on Sept. 22, designed to encourage compromise on the sensitive fund. Instead, the meeting saw officials repeat the established positions of their governments. The creation of a loss and damage fund to help countries rebuild after climate disasters was agreed upon by world leaders at COP 27 in Sharm el-Sheikh, Egypt, last year. But it has long been a contentious topic for high-income nations worried about making payouts — advocates say the fund needs $100 billion a year. Meetings to create the fund, known as the “transitional committee,” this year have also encountered difficulties. The fund’s launch, and financing, at COP 28 in Dubai in November is widely seen by lower-income countries as critical to the success of the summit. High-income governments such as the United States, United Kingdom, European Union, and Australia said they wanted the fund to address low- and middle-income countries “particularly vulnerable” to climate change, with many referencing the small island developing states, or SIDS, and least developed countries, or LDC, groupings at the U.N. “The fund should not address those countries that do not suffer under particular vulnerability,” said Germany’s representative. Australian Sen. Jenny McAllister told officials: “The reality is this fund will not have limitless resources. … It must be able to prioritize those who most need support, including SIDS, LDCs, and other developing countries who are acutely climate vulnerable.” But many other governments, including those of middle-income countries, pushed back against this position, worried it will limit who can access its money. “We would not be able to support any proposal that limits eligibility of [funds] to any specific group or groups of developing countries,” said Pakistan’s Foreign Minister Jalil Abbas Jilani. Pakistan, a middle-income country struggling with a severe debt crisis, suffered widespread flooding in 2022 which caused around $30 billion in damages. “All vulnerable developing countries must be eligible, no vulnerable developing country should be left behind,” Jilani added. For Brazil’s representative, “resources should arrive fast to the most vulnerable in developing countries — which is different from vulnerable developing countries.” And Avinash Persaud, an economist representing Barbados, told the meeting that “a fund that does not make Pakistan and Libya eligible is not a fund worth having. We need to make sure that [those eligible are] all developing countries that are suffering significant costs from climate change.” The demands stem from a principle of climate justice, that “rich countries played [a] primary role in climate change and expand fossil fuels even now,” and also delayed loss and damage “for decades,” said Harjeet Singh, head of global political strategy at Climate Action Network, a civil society group. The gaps exposed at the meeting have left a “substantial ‘mountain to climb’ to operationalize the Loss and Damage Fund by #COP28 climate conference this December,” according to Singh. Pakistan, like many other countries including Samoa, China, and India, demanded that “adequate and nondebt producing grant-based public finance must be [a] primary source of loss and damage fund finance, with innovative complementing grants.” However, higher-income countries pushed to expand the donor base of the fund. It must be “financed by all those capable of doing so,” said Graham Stuart, the U.K.’s minister for energy security and net zero. It will not be possible for the fund to “deliver what is needed if we stay trapped in outdated categories from decades ago,” he added, a reference to the country groupings from 1992 when the United Nations Framework Convention on Climate Change was signed. Echoing similar comments from high-income countries that want to expand possible contributors, Stuart said: “Public finance will be [a] critical part of [the] picture but cannot deliver the scale required” and said other forms of finance should be used, including from the private sector. But of the higher-income countries, only Ireland discussed taxing polluting industries in the name of “climate justice.” “We need to look at aviation, shipping, fossil fuel companies if we are to raise [the] scale of financing we … unfortunately we know we’re going to need,” said Eamon Ryan, Ireland’s minister for Environment, Climate, Communications, and Transport. Other key divisions highlighted in the meeting were around a U.S. proposal to house the fund in the World Bank, which has gained Australia’s support. Most lower-income country officials voiced their support for keeping the fund within the UNFCCC, which gives an equal say to countries.