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COP28 makes history as landmark 'loss and damage' fund adopted on first day

Author : Sophia Bell, Group Editor, DPA

30 November 2023

The COP28 climate summit kicked off on 30 November with an early victory as nations agreed to an official ‘loss and damage’ fund, providing a lifeline for developing nations grappling with the devastating impacts of climate change.

(Image: Shutterstock)
(Image: Shutterstock)

The loss and damage fund, managed initially by the World Bank, will aim to assist countries that have borne the brunt of extreme weather events, such as hurricanes and rising sea levels.

The urgency of the fund was underscored by the swift contributions announced by various nations, including $100 million each from the United Arab Emirates (UAE) and Germany, further supported by pledges from the UK, the EU, the US, and Japan.

The decision adopts recommendations from the Loss and Damage Transitional Committee, which assembled earlier this month for a fifth time after failing to reach consensus at earlier sessions.

The COP28 President, Sultan Ahmed Al Jaber, expressed confidence in the early success, stating, "This is evidence that we can deliver".

Earning a standing ovation from participants, the announcement of the fund marks the first time in the history of COP conferences that a decision has been adopted on the inaugural day.

“This was a challenging but critical outcome,” said Avinash Persaud, a Climate Envoy for Barbados and the transition committee for Latin America and the Caribbean.

“We now have for the first time an instrument that will operationalise an international fund for grant-based financing of reconstruction, rehabilitation and relocation after extreme weather or slow onset events.

“This is an important step forward and will bring positive momentum to other climate actions.”

“The loss and damage fund will be a lifeline to people in their darkest hour, enabling families to rebuild their homes after disaster strikes, support farmers when their crops are wiped out and relocate those that become permanently displaced by rising seas,” agreed Ani Dasgupta, President & CEO, World Resources Institute.

However, the fund's success hinges on substantial contributions to address the urgent climate-related damages faced by vulnerable countries, Dasgupta warned. “We call on world leaders to announce substantial contributions at COP28 – not only to cover start-up costs, but also to fill the fund itself. People in vulnerable countries will face up to $580 billion in climate-related damages in 2030 and this number will only continue to grow.”

According to some estimates, developing countries already face more than $400bn annually in climate-related damages. This number will only continue to rise unless swift action is taken.

Cautionary notes were also sounded by environmental advocates, including Harjeet Singh of Climate Action Network International, who raised concerns about the fund's long-term effectiveness.

"The absence of a defined replenishment cycle raises serious questions about the fund's long-term sustainability," Singh claimed.

“The responsibility now lies with affluent nations to meet their financial obligations in a manner proportionate to their role in the climate crisis, which has been primarily driven by decades of unrestrained fossil fuel consumption and a lack of adequate climate finance delivered to the global south.”

The COP28 summit opened with a plea from President Al Jaber for countries and fossil fuel companies to collaborate in meeting global climate goals. Its early breakthrough on the loss and damage fund sets an optimistic tone for the negotiations ahead, but it remains to be seen how successful this year’s summit will be in tackling the urgent issues, such as phasing out fossil fuels, and laying the essential groundwork to prevent global heating from exceeding the critical limit of 1.5°C above preindustrial levels.

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