Despite concerns, the World Bank is ready to host a climate loss and damage fund
By Gloria Dickie and Valerie Volcovici
On Saturday, countries moved a step closer to setting up a fund to help poor nations hit by climate disasters, despite reservations from developing countries and the United States.
The agreement to create a “loss and damage fund” was hailed as a breakthrough for developing world negotiators at United Nations climate talks in Egypt last year, overcoming years of resistance from wealthy nations.
But over the past 11 months, governments have struggled to reach consensus on the details of the fund, such as who will pay and where the fund will be based.
A U.N. special committee tasked with implementing the fund met for the fifth time in Abu Dhabi this week – after a stalemate in Egypt last month – to finalize recommendations that will be presented to governments when they meet less than a year to meet for the annual COP28 climate summit in Dubai than four weeks. The aim is to launch the fund by 2024.
The committee, which represents a geographically diverse group of countries, decided to recommend the World Bank as trustee and host of the fund – a point of tension that has exacerbated divisions between developed and developing countries.
Hosting a fund at the World Bank whose presidents are appointed by the United States would give donor countries outsized influence over the fund and lead to high fees for recipient countries, developing countries argue.
To bring all countries on board, it was agreed that the World Bank would act as interim trustee and host of the fund for a period of four years.
Jennifer Morgan, Germany’s special envoy for climate, said in a post on
Others were less optimistic.
“It’s a grim day for climate justice as rich countries turn their backs on vulnerable communities,” said Harjeet Singh, head of global policy strategy at the nonprofit Climate Action Network International.
“Rich countries… have not only forced developing countries to accept the World Bank as host of the Loss and Damage Fund, but have also shirked their duty to take a leadership role in providing financial support to these communities and countries.”
The committee also recommended urging developed countries to continue supporting the fund, but could not comment on whether wealthy countries would be subject to a strict financial obligation to contribute.
“We regret that the text does not reflect a consensus on the need for clarity on the voluntary nature of contributions,” a U.S. State Department official told Reuters.
The US attempted to insert a footnote clarifying that any contributions to the fund would be voluntary, but the committee chairman did not allow this. The USA objected to this rejection.
Sultan al-Jaber, who will lead the COP28 talks, said he welcomed the committee’s recommendations and that they would pave the way for an agreement at COP28.
(Reporting by Gloria Dickie in London and Valerie Volcovici in Washington DC; Editing by Andrew Heavens)
Copyright 2023 Thomson Reuters.
