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EXPLANATION: How will UN climate deal with loss and damage?


SHARM el-SHEIKH, Egypt — The decision taken on Sunday by countries around the world to establish a fund to help poor countries hit hard by a warming planet was one of the most significant since the U.N. climate talks started 30 years ago.

It was an unequivocal affirmation that poor countries, with limited resources, are most affected by extreme weather events such as floods, heat waves and storms, and that industrialized countries that have done most to contribute to climate change, at least at some level a responsibility to help.

While government leaders, environmentalists and activists have welcomed the plans for such a fund, there are still many unresolved questions, ranging from how it will work to the long-term consequences. Here’s a look at the development of the idea of ​​’loss and damage’, the term used in climate negotiations, and what we know about the fund.

In the early 1990s, the Alliance of Small Island States, a group of low-lying coastal and small island nations, began advocating for the creation of a loss and damage fund, while the United Nations created a framework to address climate change on an international level.

Since then, the idea has always been a part of the annual UN climate summits. However, it was often talked about on the margins of negotiations, something that developing countries and activists pushed for, while many wealthy countries used their weight to crush the idea. It was on the agenda for the first time at this year’s COP27 and became the center of discussion.

The fund will initially draw on contributions from developed countries and other private and public sources, such as international financial institutions, with an option for other major economies to join later.

The final text refers to “identifying and expanding sources of funding”, something the EU, US and others had pushed for during the negotiations, suggesting that countries that are both highly polluting and considered developing according to the criteria should also be included in have to pay the fund.

During the talks, China said the money for the new fund should come from developed countries, not themselves. But there is a priority for China to voluntarily pay to climate funds, if the US does too.

When the Obama administration pledged $3 billion to the Green Climate Fund in 2014, China also paid $3.1 billion for the fund.

More details on who pays will be decided by a committee that plans to launch the fund within a year.

Under the deal, the fund will help “developing countries particularly vulnerable to the adverse effects of climate change,” although there will be room for middle-income countries hard hit by climate disasters to also get paid.

Pakistan, which was ravaged by floods that submerged a third of the country, or Cuba, recently ravaged by Hurricane Ian, could qualify.

How the loss and damage fund will fit with “other institutions, agencies that do humanitarian work, help people rebuild, deal with migration and refugee crises, deal with food security, water security,” he said. David Waskow, the World Resources Institute’s international climate director.

These details will also be explored in depth by the committee next year.

Beyond just financial aid, setting up the fund is seen as a huge step forward, but how it is ultimately viewed will depend in part on how quickly it can be set up.

During the closing session on Sunday, Antigua’s Lia Nicholson said the transition commission should be established immediately and given clear mandates.

“This loss and damage fund should become the lifeboat we need,” she said.

There is a credibility gap due to broken promises in the past.

In 2009, rich countries agreed to provide $100 billion a year to help developing countries transition to green energy systems and adapt to climate change. To date, however, that initiative has never been fully funded.

One of the main reasons rich countries have long resisted such a loss and damage fund was the fear that it would lead to long-term liability. Despite the passage, that concern is still there, as evidenced by how the negotiators made sure the fund’s language didn’t say “liability” and that contributions were voluntary.

Despite these caveats, the creation of such a fund could have consequences, both legal and symbolic, in climate circles and beyond. For example, several Pacific island nations have urged the International Court of Justice to consider climate change. They argue that international laws need to be strengthened to protect their rights in the event their country is engulfed by rising seas. The establishment of a compensation fund could reinforce these arguments.

Associated Press writers Frank Jordans and Seth Borenstein contributed to this report.

The Associated Press’ climate and environmental coverage is supported by several private foundations. Read more about AP’s climate initiative here. The AP is solely responsible for all content.

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