Fault lines over Loss and Damage fund deepen at key climate meet

Major disagreements have cropped up between rich and developing countries on the operationalization of the new funding arrangements being held in Aswan, Egypt

Major disagreements have cropped up between rich and developing countries on the Loss and Damage fund at the fourth meeting of the Transitional Committee on the operationalization of the new funding arrangements for responding to loss and damage being held in Aswan, Egypt.

Disagreements crops up between rich and developing countries on the Loss and Damage fund at a key climate meet in Egypt. (AP)

The agenda of the meeting is to finalise several issues related to how the fund will operate including the location of the fund, funding arrangements, who will contribute to the fund among others. One of the major contentions is that the rich countries led by the US are seeking to locate the fund under the World Bank and are not supportive of the proposal that the Fund be a “body under international law possessing international legal personality.”

Operationalising the Loss and Damage fund is among the key deliverables at the upcoming UN Climate Conference (COP28) to be held in Dubai this December. The fourth and final transitional committee meeting is being held from October 17 to 20. But as on Thursday there was a logjam on the location of the fund, whether the fund would have an “independent legal personality”, and who would benefit from the fund.

“A complete standstill halfway through the 4th Transitional Committee on #LossAndDamage (#TC4) meeting in Aswan. 1. Rich nations seem uninterested in operationalising the new Fund to respond to the #ClimateEmergency, for which they are most responsible. Developing nations are outraged by the proposals of developed countries. These proposals shift away from their #ClimateFinance obligations...Developed countries are adamant on the @WorldBank hosting the #LossAndDamage fund. Yet, sources reveal that yesterday, the #WorldBank couldn’t assure that its policies would address concerns of access, independence, and accountability,” tweeted Harjeet Singh, Head, Global Political Strategy, Climate Action Network International.

“Rich countries, particularly the US, promoting the World Bank – which shares blame for the global climate crisis and inequality – as the host for the Loss and Damage Fund is absolutely unacceptable. This arrangement won’t provide the new Fund with true independence, will obstruct direct access to vulnerable communities, and will lack full accountability to governments and those most affected by climate change,” Singh explained.

During the plenary in Aswan several developing country negotiators explained that if the Loss and Damage Fund is located in the World Bank, it will not have a legal personality and hence will not enjoy as much independence in operating the fund.

Another contention is that developed countries want only the least developed countries and small island developing states to be beneficiaries of the fund. “The rich countries are interpreting the language in a way that it limits the beneficiaries to only these two country groupings and not other vulnerable regions,” said Liane Schalatek, Associate Director of the Heinrich-Böll-Stiftung Washington who is also in Aswan.

“Developed nations also seek to open the donors to all member parties who are in a position to contribute to the fund. But this does away with the mandate that developed countries contribute for impacts and mitigation as stipulated by the United Nations Framework Convention on Climate Change and also does away with the principle of differentiation as captured in the Paris Agreement,” Schalatek added.

COP28 President, Dr Sultan Al Jaber said: "The Transitional Committee has one more day to develop clear, clean, and concise recommendations on the fund and funding arrangements to operationalize the Loss and Damage Fund. My message to the Committee is not to waste it: focus on solutions. All of the issues dividing the Committee are solvable.

"I call on the Transitional Committee to deliver clear recommendations ahead of COP28 to support the people, lives and livelihoods in developing countries, who are particularly vulnerable to the impacts of climate change.”

“Developing countries are keen to host the Fund within the United Nations Framework Convention on Climate Change where the principle of equity will be mandatorily upheld. The World Bank’s funding is primarily focused on loans, while loss and damage funding must necessarily be grant-based and easy to access. Developed countries are proposing a new set of checks and balances for the Fund to be hosted within the World Bank, but if that is the case, why do we need the World Bank -- why not develop a new entity altogether, under the UNFCCC?” said Tamanna Sengupta, Programme Officer, Climate Change, CSE.