World Bank Compelled to Proceed with Climate Damages Fund Amidst Resistance from Developing Nations
World Bank persists in establishing a climate damages fund, disregarding objections from developing nations This initiative aims to assist impoverished states affected by climate disasters, despite reservations from some countries, including the United States
Despite concerns from developing nations and the United States, countries have made progress in establishing a fund to assist impoverished states affected by climate-related disasters. The agreement to establish a "loss and damage" fund was seen as a major achievement by negotiators from developing nations during the United Nations climate talks in Egypt last year, finally overcoming years of opposition from wealthier countries.
However, over the course of the last 11 months, governments have faced challenges in finding common ground regarding the specifics of the fund, including the responsibility for financial contributions and the designated location for the fund's establishment.
To address this issue, a dedicated committee within the United Nations gathered for the fifth time in Abu Dhabi this week after a recent impasse in Egypt. The committee aims to finalize recommendations that will be presented to governments during the upcoming COP28 climate summit in Dubai, which is less than four weeks away. The objective is to have the fund operational by 2024.
The committee, composed of countries from different geographical locations, unanimously decided on Saturday to propose that the World Bank assume the role of trustee and host for the fund. This issue has been a contentious point that has led to disagreements between developed and developing nations.
Developing countries have raised concerns that placing the fund under the supervision of the World Bank, whose presidents are appointed by the US, would grant donor countries excessive control over the fund and lead to substantial fees for recipient countries.
The World Bank was chosen as the interim trustee and host of the fund for a four-year duration in order to ensure the participation of all countries.
According to a post by Jennifer Morgan, Germany's special climate envoy, Berlin is prepared to fulfill its responsibility by actively working towards contributing to the new fund and exploring options for additional sources of financing.
Harjeet Singh, head of global political strategy at nonprofit Climate Action Network International, expressed a lack of optimism among others. "Rich countries abandoning vulnerable communities marks a gloomy day for climate justice," he remarked.
Rich countries have not only forced developing nations to accept the World Bank as the administrator of the Loss and Damage Fund, but they have also neglected their responsibility to take the lead in offering financial aid to those communities and countries.
The committee also suggested that developed countries should be encouraged to continue supporting the fund, but did not reach a decision on whether affluent nations would be required to contribute a certain amount of funds.
"We apologize for the fact that the text fails to convey the general agreement regarding the importance of ensuring clarity regarding the voluntary aspect of contributions," expressed a representative from the US State Department to Reuters.
In an effort to address this, the US made an attempt to add a footnote explicitly stating that all contributions to the fund would be of a voluntary nature. However, the chairperson of the committee declined this proposal. The US raised objections against this denial.
Sultan Ahmed al-Jaber, who will preside over the COP28 talks, said he welcomed the committees recommendations and that they would pave the way for an agreement at COP28.
