First cash pledged for countries devastated by climate change: COP28 starts with historic decision

A fund that will provide essential finance to countries most impacted by climate change attracted more than US$400 million in pledges after it was announced on 30 November at the start of the 28th United Nations Climate Change Conference (COP28) in Dubai. The draft resolution on a ‘loss and damage’ fund marks a historic moment for the world’s strategy on climate change. It is the culmination of a 30-year effort by low- and middle-income countries to be compensated by high-income countries for the harm caused by the effects of climate change. It is also a major achievement for the conference hosts, the United Arab Emirates (UAE), which has been criticized by climate campaigners in the run-up to the COP. Conference president Sultan Al Jaber chairs the Abu Dhabi National Oil Company as well as Masdar, a state-owned renewable-energy company. Of 197 countries represented at COP28, the UAE and Germany have pledged $100 million each to the fund; other European Union member states have together promised $125 million, and the United Kingdom pledged around $50 million. The United States pledged $17.5 million and Japan $10 million. The fund will be administered from the World Bank in Washington DC until a more permanent home can be found. A welcome start Researchers and campaigners welcomed the move, while recognizing that much more is needed and that pledges are not the same as money in the bank. “It remains to be seen how much money rich countries, developed countries and the polluting countries will be willing to put into that fund,” says Romain Weikmans, a climate-finance researcher at Université Libre de Bruxelles in Brussels. Countries calling for the fund, especially those highly vulnerable to climate change, are expecting it to eventually reach at least $100 billion per year. Tom Mitchell, executive director of the International Institute for Environment and Development, an environmental-research think tank in London, says the total amounts so far “are really, really very modest”. Some of the least developed countries see the US commitment as “a slap in the face”, he adds. For a long time, the United States opposed such a fund. Once the fund was agreed, the country pushed for it to be hosted by the World Bank, says Mitchell. The bank has been given only interim responsibility, in part because climate-vulnerable countries say it has insufficient experience in climate finance and mostly disburses loans. Global recognition Nations accepted the principle of a loss and damage fund — which is closer to compensation than to aid — at the end of last year’s COP in Egypt. Scientists had a leading role in raising the fund’s profile through research, Weikmans says. “The number of scientific publications on this issue has been significantly growing over the past few years,” he says. This expanding body of research has meant that loss and damage has become more widely recognized, especially by policymakers as it is increasingly featured in reports by the Intergovernmental Panel on Climate Change. Further details, such as how much of the money will be given out as grants versus loans and who will be eligible to receive funding have not been announced. That it took nations just one year to go from agreeing to start the fund to pledging donations is also significant, Weikmans adds. The climate negotiations process is usually extremely slow, he says. “It’s a big success.” The key test now, Mitchell says, is whether the fund can get the money to the places it is needed, fast. The agreement is “a really important signal”, he says. “Now the hard work starts with actually getting it to work and getting the money to the front line of climate impacts.”