A major point of contention revolves around whether the World Bank should serve as the host for the fund, a stance advocated by the U.S. and developed nations
As critical United Nations climate negotiations loom just over a month away in Dubai, countries find themselves deadlocked in a heated debate over the design of a fund aimed at aiding nations in recovery from climate change-induced devastation.
The committee responsible for crafting a “loss and damage” fund concluded its latest meeting in Aswan, Egypt, in the early hours of Saturday. However, both developed and developing nations remain at odds on key issues. Disagreements persist over which entity should oversee the fund, who bears the financial responsibility, and which nations qualify for funding.
Initially expected to draft recommendations for implementing the fund, which garnered approval as a milestone achievement at COP27 in Sharm el-Sheikh, Egypt last year, the committee opted to convene once more in Abu Dhabi on November 3. Their objective is to bridge the existing divisions before the start of the COP28 U.N. summit in Dubai on November 30, a crucial event for climate negotiations.
Preety Bhandari, a senior adviser on finance at the World Resources Institute, expressed concern over the potential derailment of the entire COP28 negotiations if the priorities of developing countries regarding funding for loss and damage are not adequately addressed.
A major point of contention revolves around whether the World Bank should serve as the host for the fund, a stance advocated by the U.S. and developed nations. Conversely, developing countries are urging the creation of a new entity within the U.N. to administer the fund. Criticisms against housing the fund at the World Bank include concerns over disproportionate influence by donor countries and the imposition of high fees on recipient nations.
Cuba’s U.N. Ambassador Pedro Pedroso Cuesta, chair of the G77 representing developing countries and China, emphasized the necessity of establishing a “new independent entity” to manage the fund, asserting that the World Bank’s operational culture is ill-suited for the fund’s intended purpose.
In response to these concerns, a spokesperson for the World Bank assured that they are actively supporting the process and are committed to collaborating with countries once an agreement is reached on the fund’s structure.
The U.S., the European Union, and other nations advocate for a more targeted approach. The EU advocates for a fund specifically focused on the most “vulnerable,” while the U.S. contends that the fund should prioritize areas impacted by slow-onset climate changes, such as rising sea levels.
Another divisive issue is determining who bears the financial burden. Brandon Wu, director of policy & campaigns for NGO ActionAid USA, called on the United States to reconsider its position on housing the fund at the World Bank.
U.S. negotiator Christina Chan, a senior adviser to Special Envoy on Climate John Kerry, countered criticisms, stating that the U.S. has been actively working to address concerns and find common ground.
This impasse over the climate fund’s design underscores the high-stakes nature of the upcoming UN climate talks in Dubai.