The fund designed to finance climate « loss and damage » in vulnerable countries was adopted on Thursday 30 November 2023, on the first day of the 28th United Nations Climate Change Conference (COP28) in Dubai. The establishment of this fund is the practical expression of the main promise made at COP27 in Egypt, where the mechanism was approved in principle but not adopted. Nearly six countries have already announced their contributions to this fund, but we are still a long way from the 100 billion dollars expected by developing countries.
This is good news for African countries. The fund designed to finance climate « loss and damage » in vulnerable countries was adopted on Thursday 30 November 2023, in the early hours of the 28th United Nations Climate Conference (COP28), which is being held in Dubai in the United Arab Emirates until 12 December 2023. This historic decision, which was greeted by a standing ovation from delegates from the nearly 200 participating countries, implements one of the main resolutions of COP27 in Egypt last year, where the fund was approved in principle, but its much-debated contours had not yet been defined.
« I congratulate the parties on this historic decision. It’s a positive signal for the world and for our work. We have made history today… The speed with which we have done so is unprecedented, phenomenal and historic », declared Sultan Al Jaber, the Emirati President of COP28.
According to the text adopted, the loss and damage fund is due to start operating in 2024. It will be hosted for four years by the World Bank, although this is contrary to the wishes of developing countries. The latter had opposed this option, criticising the financial institution for being in the hands of Westerners and unsuited to their needs.
All eyes on the $100 billion mark
Once it was adopted, the Fund for Loss and Damage began to be set up as soon as possible. The United Arab Emirates immediately announced a contribution of 100 million dollars. Germany followed with the same amount. Japan pledged 10 million dollars, the United States 17.5 million and the United Kingdom 40 million pounds (around 50 million dollars). According to several European Union (EU) negotiators, France and Denmark are on the verge of announcing an initial start, « in the region of a few hundred million dollars ». In addition, the European Commission and other EU member states have pledged contributions. However, industrialised countries and companies still have until 2 December 2023 to declare their bids.
On the ground in Dubai, negotiators from developing countries are now wondering how much the Loss and Damage Fund will be endowed with. The amounts announced so far are still far from the 100 billion dollars expected by the nations with the lowest CO2 emissions.