At the COP27 summit in Sharm El-Sheikh, Egypt, an agreement to establish a loss and damage fund was hailed as a major breakthrough on one of the trickiest topics in the UN climate change negotiations. In an otherwise frustrating conference, this decision in November 2022 acknowledged the help that poorer and low-emitting countries in particular need to deal with the consequences of climate change – and, tentatively, who ought to pay.
Big questions Many questions were raised and left unresolved in Sharm El-Sheikh. Among them: who will pay into this new fund? Where will it sit? Who will have power over it? And who will have access to the funding ? These recommendations must now be signed off at COP28, which begins on November 30. With almost 200 countries having to reach agreement on these arrangements and dissatisfaction widespread, the process isn’t likely to be straightforward.
This will require partial or total reform of the World Bank – and some argue this is already happening under its new president. But hosting the fund within the bank would still give donor countries disproportionate influence, despite recommendations by the transitional committee that the fund’s governing board be composed of a majority of developing country members.
Rather, while making all the right noises on climate finance, they may gain short-term kudos by simply rebranding existing forms of climate finance or development aid, rather than offering any new money.