The West often engages in moral grandstanding when addressing critical global issues like climate change, emphasizing the need for action and accountability. But when it comes to taking responsibility for historic carbon emissions, the developed world often falls short of its obligations.
This disparity between rhetoric and action has significant implications, particularly for vulnerable nations. The loss and damages fund, a significant achievement of the COP27 summit last year in Egypt, highlights this disconnect.
The increasing severity, breadth, and regularity of climate calamities has disproportionately affected developing countries, as evidenced by the Global Climate Risk Index 2021. Of the 10 most affected territories and countries between 2000 and 2019, all were in the developing world.
The G77 and China played a pivotal role in including finance for loss and damages at COP27. The emphasis was on framing this mechanism as a global commitment rather than liability or compensation. The result was collective acknowledgment of the asymmetric impacts of climate change and a step toward rectifying these imbalances.
However, the path to operationalizing the fund is fraught with obstacles. The impasse at an October meeting on the topic cast doubt over the process, particularly concerning the fund’s practical implementation.
Fortunately, a breakthrough was achieved at a follow up meeting in Abu Dhabi earlier this month. The text adopted there will form the basis of a final decision at COP28 in Dubai in December. Even before that meeting starts, the deal on loss and damages already has the potential to become one of the meeting’s greatest achievements.
Yet even amid progress, the adopted text reveals three issues that hint at how difficult it will be to implement the fund. The success of COP28 in addressing these issues will be a test of the international community’s commitment to equitable climate action.
The first point of contention concerns identification of fund contributors. Developing nations advocate for financial commitments from developed countries, while the United States and Europe assert that emerging economies, notably China and Gulf nations like Saudi Arabia, should share financial responsibilities equitably.
During preparatory meetings for COP28, the Saudi delegation reportedly referred to historical “failures on obligations and gaps in action” by Western nations during and after the Industrial Revolution, an opinion shared by many leaders in developing countries.
The West has a history of falling short in funding climate action. A 2009 promise to mobilize $100 billion annually for developing countries by 2020 was never met. It’s high time the West matches its rhetoric with financial commitment. COP28 is the place to deliver.
While the developing world is open to funding from non-governmental sources like the private sector and humanitarian groups, the primary responsibility lies with Western governments. Failure to step up could mean either the loss and damages fund remains non-operational, or its scale is too small to significantly impact climate change mitigation and adaptation.
The second key challenge for COP28 is pinpointing which nations should benefit from the fund. At COP27, the definition of “particularly vulnerable” sparked debate – a matter still unresolved. COP28 must clarify this. It’s a complex issue; assessing loss and damages goes beyond simple economic factors to include losses that are less tangible and harder to measure, like those from gradual environmental changes.
There’s also a gap between what affected communities experience and the data collected by governments and organizations. Localized impacts may seem more pressing than the broader climate context, complicating the creation of effective responses.
The third challenge revolves around the location and administration of the fund. Western countries, particularly the US and the EU, favored housing the fund within the World Bank, an idea that developing countries have strongly opposed.
Opposition was rooted in concerns that the World Bank’s loan-based financing model was unsuitable for debt-burdened developing countries, and that the bank’s decision-making process was too heavily influenced by its major donors, particularly the US. Moreover, high administrative fees associated with the World Bank have further fueled resistance.
Despite these reservations, developing countries made a substantial concession by agreeing to an interim arrangement where the fund would be housed in the World Bank for four years, under conditions that included direct access to grants and inclusivity of non-World Bank member states. But if the rest of the demands of the developing world are not met, they can easily do away with this concession.
Thus, COP28 faces a crucial task in making the loss and damages fund operational. If successful, next month in Dubai will mark a significant victory for the Global South and those communities bearing the brunt of the West’s historical emissions. This momentous step could pivot the scales toward a fairer climate future.
Aditya Sinha is an Officer on Special Duty, Research, at the Economic Advisory Council to the Prime Minister of India. X: @adityasinha004
