This month has been unprecedented, even in a news cycle that has grown increasingly immune to ever-worsening climate catastrophes. After Beryl, a powerful category five hurricane, smashed its way across the Caribbean, an alarming report by the Copernicus Climate Change Service found that the planet has breached 1.5 degrees Celsius of warming for the twelfth month straight.  

For a new UK government pledging to take strong climate action at home, this must be a wake-up call for it to act on its historic responsibilities as a major global greenhouse gas polluter. These two alarming events alone show why it must put climate finance at the heart of its climate agenda as COP29 rapidly approaches. 

In Hurricane Beryl’s shadow, loss and damage fund makes progress on set-up

The Caribbean is one of the regions most at risk of climate change, with 70 percent of its population living or working in coastal areas surrounded by ever-warming seas that make hurricanes like Beryl more common and more violent. While a category five hurricane is unprecedented this early in the year, forecasters have already predicted that the region could experience up to seven severe hurricanes between now and the end of October.  

Extreme climate shocks are not only wreaking havoc, claiming lives, and destroying whole communities – they are also severely affecting the region’s tourism-dependent economies. Already it’s been estimated that the clean-up alone will cost tens of millions of dollars – a cost that doesn’t even begin to factor in what’s needed to rebuild destroyed communities still paying the price of previous disasters – crises that are gendered in their nature.  

Costly damage

Women and girls are more than 14 times more likely to be killed by climate shocks, according to Women’s Environmental Leadership Australia, while our own research found that women also face an increased risk of non-economic impacts such as gender-based violence and forced child marriage.

Hurricane Maria – the deadliest Atlantic hurricane to make landfall in the 21st century – cost the island nation of Dominica an estimated 225 percent of its GDP, while Hurricane Irma in the same year cost Antigua and Barbuda more than $136 million in damages, with the tourism industry representing around 44 percent of all losses.  

Even seven years on, the scale of the destruction has meant that communities are still rebuilding while dealing with hurricanes that worsen with intensity and frequency with each passing year. Yet, despite this, small island nations that have only contributed around 1% of all global carbon emissions, have struggled to unlock climate finance, accessing a mere $1.5bn out of the $100bn pledged in total to Global South countries.   

Negative debt spiral

To make matters worse, countries across the Caribbean have no choice but to turn to international financial institutions and take on eye-watering levels of debt to help communities regain their footing. Debt laden with restrictive repayment conditions further locks countries into a negative spiral – forcing governments to shape their economies and societies in order to service their debts.  

All this means that small island nations are left to play catch up, forever stuck on the back foot. Instead of spending the meagre levels of finance pledged to resilience-proofing their economies and communities, loans are used to service debts while interest rates for repayments globally remain at a record high.  

In its manifesto, Britain’s Labour Party spoke about “tackling unsustainable debt” as a “priority area” in its global commitments – indeed a positive step forward. But in power we need it to act and end the colonial debt system and support countries in the Caribbean and beyond move towards a just and climate resilient future. 

The Loss and Damage Fund must not leave fragile states behind

For a new government keen to show global leadership on climate, this year’s COP summit is a vital moment for the UK to play a much stronger role on climate finance than its Conservative predecessors. As the fourth-highest historic carbon emitter in the world, the UK has a moral and historic responsibility to address climate change, but its actions haven’t matched its words so far. 

During its election campaign, Labour failed to pledge new funds to address the huge gulf in climate financing for losses and damages, opting instead to simply deliver the previous government’s low-ball commitments to spend £11.6bn between 2021-2026. With nations set to meet at COP this year to define new annual climate finance commitments for Global South countries – known as the New Collective Quantified Goal (NCQG) – Labour needs to be much more ambitious in Azerbaijan. The future of communities on the frontlines of the climate crisis depends on it. 

Now, in the words of Grenada’s Prime Minister Dickson Mitchell, is not the time for countries like the UK to “sit idly by with platitudes and tokenism.” Now is the time for radical action and for the new UK government to stand up and deliver for the billions of people facing a runaway climate emergency. 

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“The level of damage is apocalyptic,” said Henrietta Elizabeth Thompson from Barbados, among the countries worst hit by the natural disaster, at the start of the four-day session in Incheon, South Korea.

The board needs to create a fund that “reflects the scale of the magnitude, of the risk, the damage and devastation faced by people across the world and the urgency required to respond to it,” she added.

But before the fund starts handing out any money in future, board members have to agree on procedural matters.

A name and a place

On the opening day, the Philippines was picked as the host of the fund’s board in a secret vote by members. The Southeast Asian nation defeated bids from seven other candidates: Antigua and Barbuda, Armenia, Bahamas, Barbados, Eswatini, Kenya and Togo. 

Selecting a host country was one of the most pressing priorities for this week’s meeting. It represented a first necessary step for the board to take up a legal personality and enter into formal agreements with the World Bank, set to host the loss and damage fund on an interim basis. 

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While the administrative staff of the fund will be based at the World Bank, the board will carry out some of its meetings in the Philippines in the future, likely in the capital Manila. The country’s proposal scored particularly high thanks to its abundant transport options and accommodation facilities and its visa free entry for short stays for most visitors, according to a background paper. 

A man stands in a home where the roof was ripped apart, in the aftermath of Hurricane Beryl, in St. Elizabeth Parish, Jamaica, July 5, 2024. REUTERS/Maria Alejandra Cardona

The somewhat thorny issue of what to officially call the fund also landed on the table in South Korea. 

For nearly all climate talks participants, it’s simply been the “loss and damage fund” since it was adopted at COP27, but the United States have made various attempts at a rebrand. At COP28 in Dubai, for example, then U.S. climate envoy John Kerry kept referring to the “fund for climate impact response” – a more neutral label that softened the suggestion of developed countries’ historical responsibility. 

In consultations ahead of the meeting, the co-chairs of the board collected various options, from the minimalistic “the Fund” to the highly technocratic “Fund referred to in decisions 1/CP.28 and 5/CMA.5”.

Ultimately, members decided to go with “Fund for responding to Loss and Damage”, abbreviated as FLD, without spending much time debating the matter. 

Beware the ‘billions’

Divisions cropped up when the discussion turned to the process of selecting the executive director (ED). Hoping to announce the name of the executive director at COP29 this November, the board had to agree at this session on the criteria for picking the fund’s boss, including the roles and responsibilities.

Several board members from developing countries wanted the ED’s job description to mention efforts to find additional money for the fund at the scale of billions. “If you have someone running a fund of 100 million, this is totally different from 10 billion, 55 billion, or 100 billion,” said Egypt’s Mohamed Nasr, “the scale of this fund is not confined to where it is”.

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Countries have pledged around $700 million to the fund so far, with Italy, Germany, France and the United Arab Emirates among the biggest contributors. The United States has pledged only $17.5 million. South Korea pledged $7 million at this week’s meeting. The residual costs from loss and damage is projected to reach a total of $290 billion to $580 billion by 2030, according to a 2018 study.

But some developed country board members, including the US, rejected the proposal of including a reference to “billions”, according to observers.

“It is clear that developed nations…remain non-committal about scaling financial mobilisation,” said Harjeet Singh, global engagement director for the Fossil Fuel Non-Proliferation Treaty Initiative, who attended the meeting. “The initial commitments of a few hundred million dollars are merely a drop in the ocean compared to the real and escalating costs of climate change that developing countries endure,” he added.

Eventually, board members found a compromise wording. The ED will be asked to lead efforts to grow the fund’s resources “towards contributing to a response at scale to respond to climate-induced loss and damage”.

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The recruitment process will now go underway with the goal of putting a shortlist of candidates in front of the board by the next meeting scheduled for September 18-20 in Baku, Azerbaijan.

Legal agreements

Between now and then, there will be little time for a summer break.

After approving last June the conditions of hosting the fund, the World Bank now has until August 12 to share with board members the draft text of the agreements detailing how that will work in practice. It will include things like provisions to handle the money and give access to recipients and the rules governing the relationship between the board and the World Bank.

Developing countries and civil society groups are eager to see guarantees that communities in hard-hit countries will be able to access funds directly without going through various intermediary agencies.

“Agreeing and certifying these agreements will be the most important decision at the next board meeting”, said Liane Schalatek, associate director of the Heinrich Böll Foundation in Washington who attended the board meeting. “The World Bank has shared an outline of what they will include, but we are talking about legal agreements so the devil is in the detail”.

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As the Loss and Damage Fund’s board meets this week, it is addressing key issues such as selecting a host country, how to disburse its financial resources, and lobbying for more funding from donors. However, the agenda currently doesn’t address the challenges communities in fragile contexts will face in accessing the fund. This oversight mirrors a recurring pattern in international climate talks, where the needs and realities of fragile and conflict-affected situations (FCS) often receive little to no attention. 

FCS, as defined by the World Bank, experience high levels of institutional and social fragility and violent conflict. These nations, which include Afghanistan, Mali and Niger to name a few, often face extreme climate hazards and struggle to cope due to weak institutions, poor governance, and ongoing conflict.  

Together, fragility and climate risks make these countries particularly vulnerable to the effects of the climate crisis. Because of their vulnerability, fragile contexts are frequently deemed too risky for climate finance investments, as project partners find it challenging to operate and donors are concerned about their return on investment.   

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While the Paris Agreement prioritizes Least Developed Countries (LDCs) and Small Island Developing States (SIDS) for international climate finance, LDCs and SIDS with additional challenges like violent conflict and fragility face barriers, receiving significantly less financing than more stable regions.  

Mercy Corps’ analysis reveals that the 10 most fragile states received only $223 million in climate adaptation financing in 2021, less than 1% of total flows. Without prioritizing the unique needs of fragile contexts, the Loss and Damage Fund risks excluding these climate-vulnerable communities once again. 

Action needed from the start

There are no references to fragility or conflict in the COP decision that established the Loss and Damage Fund or the Governing Instrument, which sets the Fund’s rules and practices. Additionally, there is no mention of how fragile or conflict-affected places in more “stable” countries will receive financing through the Fund.  

Fragility and conflict can limit how communities and institutions across a particular country respond to climate impacts. For example, in Northern Kenya, where Mercy Corps implements several climate adaptation and food security programs, unpredictable rainfall affects water resources, creating pressure on pastoral livelihoods and leading to conflict over water and pasture. Relatively weak institutions at the local government and community level lack the capabilities and resources to plan and implement climate adaptation interventions.

If the Loss and Damage Fund does not address how to support both fragile states and contexts like Northern Kenya now, it will be hard to incorporate these considerations later.   

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Advocating for specific challenges in fragile contexts during the Fund’s initial setup is crucial, as evidenced by Mercy Corps’ experience with the multi-billion-dollar UN-backed Green Climate Fund (GCF). Although the GCF has made strides to consider communities affected by climate change, conflict, and fragility through its policies and programs, including endorsing the UAE’s Declaration on Climate, Relief, Recovery, and Peace at COP28 last year, it still struggles to effectively serve communities in fragile contexts.  

Prioritizing finance for those who need it most

At the second meeting of the Loss and Damage Fund’s board this week, its members should take the following steps to realize the Fund’s promise and ensure loss and damage financing reaches those who truly need it most: 

1. Designate a board member for fragile and conflict-affected situations: This idea, initially proposed by Afghanistan for the GCF, was never fully realized. Board Members play an important role in shaping the policies and procedures of the Loss and Damage Fund and in the future, approving projects. Additionally, an active observer from civil society can represent the views of FCS at Board meetings.
2. Develop a framework to identify “particularly vulnerable” countries: The Loss and Damage Fund board will need to determine which countries are particularly vulnerable to climate change and thus, eligible to receive financing. To ensure a comprehensive understanding of vulnerability, the LDF must include fragility metrics such as economic, political, social cohesion, and security dimensions in any forthcoming vulnerability framework. 
3. Develop and approve operational policies and frameworks for fragile contexts: To effectively utilize loss and damage finance, the Fund should adopt policies and tools that allow fragile contexts to flexibly respond to shocks and disrupt the climate-conflict cycle. Mercy Corps’ Assessment for Adaptation to Conflict and Climate Threats, for example, examines the dynamics between climate change and conflict, and identifies entry points and approaches to interrupt the cycle of fragility. In Mali and Niger, where we piloted this tool, program participants identified the rainy season – especially the beginning and the end – as the time when many of the land-based conflicts take place between farmers and herders. It is being used by the UK government to plan ways to resolve tensions and support women who are particularly vulnerable.   

The creation of the Loss and Damage Fund was a significant victory for nations that have contributed the least to climate change yet bear the brunt of its impacts. The board of the Loss and Damage Fund now has a critical opportunity to ensure inclusion and equity by guaranteeing that all communities, especially those in fragile and conflict-affected states, have access to the necessary funding to address loss and damage. It is imperative that no one is left behind in this global effort to combat the climate crisis.

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Frontline communities around the world are shouldering the deleterious injustices of climate change, especially in Africa despite it emitting only around 4% of total global carbon emissions. 

A case in point is the nomadic Amazigh tribes in the southeastern reaches of Morocco. The Amazighs are the oldest known inhabitants of Northern Africa. Their ancestral lifestyle is threatened by climate change, manifest in consecutive years of drought, relentlessly eroding their rights, including access to water and education, and their heritage. 

The story is personal to me, as I am from this region, and these are my people. My father was a nomad but was forced to give up nomadic life and settle in a village due to drought in the early 1980s. 

Among our tribe, “we’ve gone from nearly 600 tents in 1961 to just a few dozen today”, my father declares. According to the national census, Morocco’s total nomadic population in 2014 stood at just 25,274, a 63% drop from 2004. 

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As pastoralists reliant on livestock, particularly sheep and goats, nomadic families depend on suitable pastures, but drought increasingly has rendered pastures and water sources barren. “This is the eighth consecutive year of drought, this situation is unprecedented,” a 91-year-old nomad told me. 

This is also a story of loss and damage to the nomads’ very culture and way of life. As someone familiar with the experience of displacement, I have witnessed how climate change strikes at the heart of our culture and identity. It’s not just about losing homes or livelihoods — it’s about losing the very essence of who we are.  

Each drought-induced exodus undermines our traditions, leaving us adrift in a world that seems less and less familiar.  

This is an existential crisis for my community. 

In search of water 

In Morocco, the frequency of droughts has increased fivefold, from one dry year in 15 between 1930-1990 to one dry year in three over the last two decades. Now, the Intergovernmental Panel on Climate Change predicts a doubling of drought frequency in North Africa to come.  

Water is being lost, and much is lost with it. As Moha Oufane, another nomad, said to me: “Water is everything. It’s the most important thing for us. We can buy food and feed livestock with what’s left in the mountains or by going into debt, but water can’t be bought. It’s priceless.”

Water shortages are disrupting traditional pastoral routes, forcing families to give up nomadism or put themselves at risk. In the past, the year would be structured around a well-defined nomadic pattern: summer months were devoted to Agdal-to-Imilchil, while winter months were spent on the Errachidia side, with a return to Assoul (a village in Tinghir) and the surrounding area when the cold set in.  

Today, this traditional route no longer exists. Nomads go where little water remains, to preserve their livelihoods and the lives of their livestock. 

Only one new water point exists on this traditional route, a project led by the Moroccan state. “This project is extremely beneficial for us,” Moha says. “Similar projects in other nearby areas would be of immense help to us.”

Loss and damage sub-goal

Many nomads are forced to go into debt to feed their livestock, their main source of income, which worsens their situation. According to Moha, some accumulated debts of nearly 30,000 dh ($3,000) between October 2023 and January 2024”. Debt has long been used by these communities, but this was when nomads were confident of being able to pay it back after good rainfall seasons, which is no longer the case. 

Conflicts over territory and diminishing water-dependent resources, once unthinkable, now disrupt the social cohesion and hospitality for which nomadic communities are renowned. 

The plight of Morocco’s nomads illustrates the need for international support for climate-affected communities. Rich historic-emitter countries must honour their obligations to provide climate finance under the United Nations Framework Convention on Climate Change (UNFCCC).  

Quality – not just quantity – matters in the new climate finance goal

Economic costs of loss and damage in developing countries are estimated to reach $290-580bn/year by 2030. Grant finance, not debt, must be provided for communities to repair and recover. Developing countries should not have to spend a penny to cope with loss and damage they did not cause. However, despite the celebrations, the new UN Loss and Damage Fund has only received $725 million in pledges. 

We need a sub-goal for loss and damage in the New Collective Quantified Goal (“NCQG”) on climate finance, to be debated over the coming days at the mid-year UN climate negotiations in Bonn and the agreed at COP29 in Baku. It is immoral for developed countries to be blocking such a sub-goal. 

It is outrageous that nomads and frontline communities should be left to fend for themselves and see their ancestral lifestyles, identities and cultures eroded, while some wealthy nations prosper from investment in fossil fuels and find public finance for their own purposes but not for climate finance. We refuse to be collateral damage in a game of power and profit. 

The post North Africa’s disappearing nomads: Why my community needs climate finance appeared first on Climate Home News.

A few months later, the US government accused Mmobuosi of fraud over his business dealings. Climate Home News visited Mchenga this month and found the new homes have cracks in the walls and floors, with residents scared they will collapse.

Emma Jeremia, a pregnant woman living in one house, said it would have been better to die in the storm than be killed by her house collapsing on her. Simon Mweyeli, who liaised with the Red Cross on behalf of Mchenga’s residents, said the homes can “fall anytime”.

This unsafe housing for cyclone survivors in Malawi, funded by a suspected fraudster, shows why governments need to get the new UN loss and damage fund up and running with decent resources and quality control, climate campaigners told Climate Home.

Cracks in the wall inside one of the homes in Mchenga, Malawi, pictured on May 8, 2024 (Photo: Raphael Mweninguwe)

International climate justice activists said the local testimonies show why funding for disaster victims should come from the governments that have predominantly caused the climate crisis rather than unaccountable benefactors – and recommended that affected people should be involved in designing and building their new homes.

After last year’s devastating cyclone – with the loss and damage fund not yet up and running – the cash-strapped Malawian government went looking for financial help around the world. According to national media, ex-president Bakili Muluzi recruited Nigerian businessman Dozy Mmobuosi.

The day after promising to build the homes – and the same day he was accused by short-selling firm Hindenburg Research of operating a scam company – Mmobuosi received a Malawian diplomatic passport, which is usually reserved for senior politicians, national media reported.

“Such instances highlight why we need a loss and damage fund that empowers affected communities to lead recovery and reconstruction efforts, and not allow politicians or corporations to further their own interests,” said Harjeet Singh, a climate activist who has long advocated for the fund.

In 2022, governments finally agreed at the COP27 climate talks to set up such a fund to channel money from wealthy nations to people in developing countries who have been harmed by climate change. The fund’s board hopes it can start distributing money next year.

Cyclone Freddy strikes

In March last year, Cyclone Freddy travelled from the west coast of Australia across the Indian Ocean over Madagascar and into southern Africa, where it caused floods and mudslides that killed more than 1,000 people in Malawi.

The village of Mchenga, in Malawi’s southern Phalombe district, was among the worst-hit. Its 72-year-old headman Laften Nangazi told Climate Home that 80 people died there in a single day.

He said he saw men, women and children being swept away in despair. “I cried when I saw children dying,” he said, “I saw about 40 people in a tree, and they were there for three days waiting for the water levels to go down.”

When the waters eventually receded, 176 of the village’s families were left homeless – a problem repeated across the country’s south.

Hendry Keinga reacts after he lost a family member during the Mtauchira village mudslide in the aftermath of Cyclone Freddy in Blantyre, Malawi, March 16, 2023. (REUTERS/Esa Alexander)

Looking for funds

Malawi is the world’s tenth poorest country, so government money to rebuild housing was scarce. The international fund for loss and damage, meant to address disasters like this, had just been agreed at COP27 but was not yet up and running.

President Lazarus Chakwera invited his three living predecessors for a meeting. Two of them – Bakili Muluzi and Joyce Banda – showed up and were made “Goodwill Ambassadors of Tropical Cyclone Freddy”, national media reported.

Muluzi’s son Atupele told Climate Home that his father and Banda tried to access finance “to support the very real costs to the country for housing, social infrastructure, agriculture and industry as we try to rebuild in a resilient manner”.

“Of course, the global economy and international politics means that this is a challenging task in the midst of the chaos, conflict and climate impact everywhere in the world,” he added.

To meet this challenge, Bakili Muluzi turned to Mmobuosi, a Nigerian businessman and founder of mobile banking company Tingo Group, who was then in the news for trying to take over English football club Sheffield United.

Twitter

Controversial Nigerian tech entrepreneur Dozy Mmobuosi recently visited the country to participate in the launch of a Cyclone Freddy relief project in Phalombe, an event supported by former Presidents Bakili Muluzi and Joyce Banda. pic.twitter.com/w1WlzANAKM

— Platform for Investigative Journalism – Malawi (@PlatformMalawi) June 15, 2023

On June 6, Mmobuosi, Muluzi and Banda travelled to Mchenga to launch construction work on new houses, posing with a foundation stone bearing their names. On Facebook, Banda said the houses “will be made possible because of a generous contribution” from Mmobuosi, who she called “a distinguished son of Africa” and “good friend” of Muluzi.

The next day, according to the Platform for Investigative Journalism, Mmobuosi met with Muluzi and President Chakwera at the president’s home. The Nigerian was unusually quickly granted a diplomatic passport, usually reserved for top Malawian politicians and their spouses.

“Exceptionally obvious scam”

But on the same day Mmobusi was in Mchenga, Hindenburg Research, which specialises in “forensic financial research”, accused his Tingo Group – which says it provides mobile banking to farmers – of being “an exceptionally obvious scam with completely fabricated financials”.

Hindenburg was short-selling Tingo Group shares, so it stood to profit if the share price of the firm – listed on the Nasdaq stock exchange in the US – went down.

Hindenburg accused Mmobuosi of inventing much of his backstory, of settling out of court with Nigerian authorities over alleged bad cheques in 2017, of photo-shopping Tingo logos onto planes to claim the company had an airline, and generally exaggerating the company’s assets.

While Muluzi stood by him, in December 2023 the US Securities and Exchange Commission (SEC) sided with Hindenburg. They accused Mmobuosi of a “staggering” fraud against Tingo’s investors.

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The SEC’s 72-page complaint included images of what it said was a real and an edited Tingo bank statement. The edited one had several zeros added to the balance.

US authorities charged Mmobuosi with security fraud and froze his assets. His whereabouts are reportedly unknown. If found guilty, he faces up to 20 years in prison.

On October 6 – after Hindenburg’s complaint but before the SEC’s – Muluzi and Mmobuosi went back to Mchenga village in Malawi to hand over the first batch of 17 houses.

Muluzi thanked Mmobuosi for the funding and said he had “committed to buy beds, mattresses and furniture for the households and also to bring solar electricity to the area”. In December, another 28 houses were handed over.

@MalawiRedCross has today handed over 45 houses to beneficiaries of T/A Phweremwe in Phalombe, that have been constructed with funding from The Dozy Mmobuosi Foundation through Goodwill Ambassador on TC Freddy Former President Dr Bakili Muluzi. pic.twitter.com/hVhOYdScjS

— Malawi Red Cross Society (@MalawiRedCross) December 19, 2023

Cracks and missing crockery

But five months on, when Climate Home visited the village, residents complained the homes were too few, dangerous and small, adding they had not yet received the promised furniture or solar power.

Jeremia said her father was given one of the houses but she sleeps in it instead. “He and my mother and my other siblings are living in a rented house. They cannot stay in a house that is threatening their lives. After all, it’s also a very small house to accommodate all of us,” she said.

Mweyeli, the chair of the village civil protection committee, said most new homes are “showing cracks – a sign that these houses are of sub-standard”. He said the first 17 homes were built with 45 bags of cement, but the later 28 were built with just 28 bags, making them weak and liable to fall down.

He demonstrated how the floors were made of sand covered by plastic with a “thin layer of cement which is now showing cracks all over”.

Simon Mweyeli shows cracks in the floor of one of the houses, which he said were sand covered by plastic and a thin cement layer

Charles Macheso, who climbed a mango tree to save himself from the cyclone but lost all his possessions, said village coordinators told the Malawi Red Cross that more cement was needed. But, he said, the Red Cross officers “were so defensive”. Mweyeli said he called the Red Cross to report the cracks and the aid organisation came to take pictures.

Charles Macheso in Mchenga village on May 8, 2024 (Photo: Raphael Mweninguwe)

Asked about these houses, the Malawi Red Cross’s communications specialist in the capital Lilongwe, Felix Washon, initially told Climate Home to go see them, and then hung up the phone without answering further questions.

“Not aware”

After a two-day journey from Lilongwe to the village, Climate Home contacted Washon again and was told by email that “we are not aware of any report about cracking of houses in Phalombe [the district that covers Mchenga]”.

Washon later said the Red Cross had a contract to build the homes with Muluzi rather than Mmobuosi. “We never received any money from Dozy [Mmobuosi] – direct from Dozy,” he said by phone. “Malawi Red Cross Society has no other links or contracts with Dozy,” he added.

Climate Home News emailed the contact address listed on the Dozy Mmobuosi Foundation’s website, but the email bounced.

Mmobuosi told Arise News in February that he was “taken aback” and “shocked” by the SEC’s allegations about Tingo Group. He said he had not run Tingo directly for seven years, adding that his lawyers were “on top of” responding to the SEC charges and that Tingo was conducting its own internal investigation. Mmobuosi is not currently listed as a member of the company’s board of directors.

In Mchenga, village headman Nangazi told Climate Home that 131 families are still without a home and called on national organisations like the Catholic Development Commission – that has provided iron sheets – to help build more accommodation.

Ida Mayilosi, 75, is one of those who missed out. “I wished I had also been assisted,” she said. “This house I am living in was built by some relatives but it took time.”

Ida Mayilosi, whose house was destroyed by Cyclone Freddy, sits in Mchenga village, May 8, 2024 (Photo: Raphael Mweninguwe)

Mattias Söderberg, climate lead for Danish charity DanChurchAid, which is currently building homes in Nepal after landslides there, said support for communities to rebuild after extreme weather that causes loss and damage “should be done so that they are more secure and robust to face the next climate-related disaster”.  “Investments which are not adapted risk being lost,” he added.

Singh – who fought to solve similar problems in India’s Andaman and Nicobar islands following the Indian Ocean tsunami in 2006 – said he had seen “firsthand how involving communities not only places them in the driving seat but also ensures accountability”.

(Reporting from Raphael Mweninguwe in Mchenga and Joe Lo in London; editing by Sebastian Rodriguez and Megan Rowling)

The post In Malawi, dubious cyclone aid highlights need for loss and damage fund appeared first on Climate Home News.

After three decades of negotiations to establish the fund for climate loss and damage, its inaugural board meeting just concluded in Abu Dhabi. The establishment of this fund is a monumental milestone. We are still some way off, but equally historic are seismic shifts underway in how we may finance it.  

The first meeting was a modest success. The fourteen members chosen by developing country constituencies and twelve from developed countries demonstrated unity of purpose. Two impressive and committed co-chairs – Jean Christophe Donnellier of France and South African Richard Sherman – were elected. The new board agreed on processes to select an executive director and a host country.

Mistrust eased between some members of the board and the World Bank, which negotiators had previously chosen, with conditions, to be the secretariat of the fund. This unity and commitment are seeds of hope for the fund’s future.  

Loss and damage board speeds up work to allow countries direct access to funds

These seeds will need money to grow. The only long-run solution to the escalating climate crisis is accelerating the energy transition from fossil fuels. However, due to the lack of progress, we now face losses and damages that require financing of over $150bn per year – according to the IHLEG Report for COP26 and 27.

These losses disproportionately affect the most vulnerable, exacerbating poverty and inequality. Adding injustice to a bleak situation is that the wealthiest countries are most responsible for the stock of greenhouse gases that cause global warming.  

The OECD estimates that total development assistance is $200bn per year, and even though this is half of the commitments made five decades ago, the politics of the day suggest aid money is more likely to be re-channelled for domestic purposes than increased substantially. So where could $100bn plus come from?

Some developed countries promoted the idea that they would initially pay the insurance premiums for a small number of small countries. Twinning insurance to disaster seems natural –  especially if you want to minimise using tax-payers money. But with insurers pulling out of California, Louisiana and Florida because of climate risks, those living in other climate-vulnerable countries – 40% of the world’s population – felt this was at best not scalable and at worse disingenuous.

Climate, like a preexisting medical condition, has become uninsurable. It is now a risk of substantial loss that is growing – and increasingly certain, frequent, and correlated – and so insurance’s spreading and pooling qualities don’t work. If the annual known climate loss is $150bn and rising, yearly premiums cannot be much less without direct or cross-subsidies that no one is budgeting. It’s insurance, not magic. 

Time to test new taxes

For the climate-vulnerable today, the only real insurance against future loss and damage is investing massively in resilience which would generate future savings several times their cost.

One idea mooted by the Inter-American Development Bank is that the multilateral banks lend for a resilience project in a climate-vulnerable country at little more than the banks’ preferential borrowing rates, and donors separately contribute to a substantial reduction in the interest rate once an independent assessment has certified that the investment has achieved the intended resilience.

Countries can borrow for resilience if the repayment period is sufficiently long to capture the savings, but not for current loss and damage. Without grants to fund that, vulnerable countries will drown in debt long before sea levels rise. 

The global financial crisis and COVID showed the promise of long-dismissed ideas. Over the past twenty-four months, 140 countries have agreed an internationally minimum corporate income tax, and the EU has put on an extraterritorial carbon border adjustment tax. The International Maritime Organisation is debating an international levy to fund the shipping industry’s decarbonisation.

Southern Africa drought flags dilemma for loss and damage fund

The fund’s board will want to hear proposals from the new taskforce established by Barbados, France, and Kenya to consider international taxes to pay for global public goods.

They will also be interested in the just-published proposal for a Climate Damages Tax on the production of fossil fuels by an amount related to the damage they will cause. One dollar per barrel of oil produced, and its equivalent for coal and gas – an amount easily lost in the monthly volatility of prices – could finance both the loss and damage fund and rebates for the poorest consumers. There are enforcement mechanisms. Oil producers could be required to show they have paid the tax before their shipping insurance is legally enforceable. 

Knowledge that scalable solutions exist is vital because some use their absence to stall progress. However, what we do is not about the how, but how much it matters to us. G7 central bankers purchased $24 trillion of government bonds to stave off recession during COVID and the global financial crisis. It was unprecedented and heroic.

With hindsight, if they had bought bonds that financed climate mitigation, the recovery would have been stronger and quicker, and inflation – heavily driven by fossil fuels – would have been weaker. They would have saved the economy and progressed halfway to ending climate change and limiting loss and damage. Viable financing solutions exist. We have to decide to use them. 

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As the 26-member board held its first three-day meeting in Abu Dhabi this week, discussions centered on the administrative steps needed to get the fund up and running, and giving out money as soon as possible.

Selecting the host country for the board is a priority because only then will it be able to take up legal responsibility and enter into formal arrangements with the World Bank, which governments have asked to host the loss and damage fund “on an interim basis” despite the initial reluctance of developing countries.

The World Bank has until mid-June to confirm it is willing and able to take on this role. The decision rests largely on the bank’s ability to meet 11 conditions, including allowing developing-country governments and organisations working with vulnerable communities to receive money directly without going through intermediaries like multilateral development banks or UN agencies.

“Too many cooks”

Daniel Lund, a loss and damage board member from Fiji, said that overhead costs and management fees from multiple layers of middlemen swallow up a high proportion of development funding in general.

“For small island developing states, it is always too many cooks and not enough ingredients,” he told Climate Home. “A lack of direct access is a particularly unacceptable scenario when it comes to finance for addressing loss and damage because much of what we need to do is direct support [to] the individuals and communities that bear the burden [of climate change]”.

Southern Africa drought flags dilemma for loss and damage fund

Concerns have been fuelled by the World Bank’s lack of experience in working with direct access to communities in its other operations, climate finance experts said. But during the meeting in Abu Dhabi, the bank sought to provide reassurances, indicating its willingness to be flexible on this matter and find a solution.

Renaud Seligmann, the World Bank representative at the meeting, told board members the bank is looking into a model that would “break new ground” and that it is “prepared to innovate and design with you to make it work”.

Host selection fast-tracked

For the World Bank, a primary concern lies with the risks attached to giving money to hundreds of small entities that may have less strict compliance processes. For that reason, it wants the board of the loss and damage fund to take on legal responsibility in case funds are misused. And as that legal personality can only be obtained from the host country, the selection process is being fast-tracked.

Interested countries have until early June to submit their candidacy – Barbados, Antigua and Barbuda, Bahamas and the Philippines have already thrown their hats in the ring. The board is expected to make a final decision at the next board meeting scheduled for July 9-12.

The board is picking up the pace of its work after its first meeting was delayed by three months as a result of developed countries’ failure to appoint their members on time.

A person moves their belongings at a flooded residential complex following heavy rainfall, in Dubai, United Arab Emirates, April 18, 2024. REUTERS/Amr Alfiky

The board was forced to tackle logistical challenges on the final day when stormy weather in Abu Dhabi moved the deliberations online. Scientists have warned that the Arabian peninsula will suffer more heavy rain at 1.5C of global warming than it did in pre-industrial times, and recent floods in the neighbouring city of Dubai shut down the airport and caused major economic damage.

Lund said the progress made at the first meeting “in some respects was surprising”, but there is still a long way to go before money reaches climate-vulnerable communities. “We have clear instructions, but translating that blueprint into contracts, roles, policies, locations, jobs and structures is going to be a shared headache for all board members over the course of this year and beyond,” he added.

Civil society at the table

Civil society representatives argued there is a need to broaden the direct participation of frontline communities struggling with climate impacts in the fund’s operations. The first board meeting limited participation to two people per UN stakeholder group – some of which represent millions, even billions, of people – such as Indigenous Peoples, youth, and women and girls.

“This fund must be different to fulfill the expectation – people-centered, human rights-based, gender-responsive – from the start, with meaningful participation and engagement throughout,” said Liane Schalatek, associate director of the Heinrich Böll Foundation in Washington who attended the board meeting.

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“Board members all stressed the importance of civil society observer and communities engagement and welcomed it,” she added. “Now that verbal support needs to be operationalised, including through dedicated financial support.”

After sorting through all of its procedural matters, the board will start addressing thornier issues such as how to disburse money and how to fill its coffers with more cash. So far, it has garnered about $660 million in pledges.

While board members hope to have the fund’s structure in place by COP29 this November, it is not expected to start handing out money until 2025.

(Reporting by Matteo Civillini; editing by Joe Lo and Megan Rowling)

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Christopher Dabu, a priest in Lusitu parish in southern Zambia, one of the affected regions, said that because of the drought, his parishioners “have nothing”- including their staple food.

“Almost every day, there’s somebody who comes here to knock on this gate asking for mielie meal, [saying] ‘Father, I am dying of hunger’,” Dabu told Climate Home outside his church last month.

The government and some humanitarian agencies were quick to blame the lack of rain on climate change.

Zambia’s green economy minister Collins Nzovu told reporters in March, “there’s a lot of infrastructure damage as a result of climate change”. He added that the new UN-backed loss and damage fund, now being set up to help climate change victims, “must speak to this”.

Reverend Christopher Dabu outside his church in Lusitu, Zambia (Photo: Joe Lo)

But last week, scientists from the World Weather Attribution (WWA) group published a study which found that “climate change did not emerge as the significant driver” of the current drought affecting Zambia, Zimbabwe, Malawi, Angola, Mozambique and Botswana.

Instead, they concluded that the El Niño phenomenon – which occurs every few years with warming of sea surface temperatures in the eastern Pacific Ocean – was the drought’s “key driver”. They said the damage was worsened by the vulnerabilities of the countries affected, including reliance on rain-fed farming rather than irrigation.

Nonetheless, briefing journalists on the study, co-authors Joyce Kimutai and Friederike Otto said climate change does make El Niños stronger and more frequent – and therefore could be playing an indirect role in the southern African drought. Otto noted that climate change “might have a small role but not a big one”.

While WWA studies have often found that disasters like this are driven by climate change, there have been other cases where they have played down that link – as with droughts in Brazil in 2014 and Madagascar in 2021, and floods in Italy in 2023.

The complex nature of the science raises a dilemma for those now designing the fledgling loss and damage fund.

Its board holds its first meeting in Abu Dhabi this week. In three days of talks, the board’s 26 members will discuss the fund’s name and how to decide where it will be hosted and who will lead it. Trickier issues like the role of climate change attribution will be left to future meetings.

Climate Home spoke to several experts and two of the fund’s board members, whose opinions were divided on whether the link between climate change and a particular disaster should have to be proven before funds are dished out to affected communities.

Droughts and climate change

Egyptian climate negotiator Mohamed Nasr, a member of the new fund’s board, said he thought triggers for funding “would include the climate relation to the losses and damages”.

But to judge that connection, he said the board would “rely on confirmed science per the Intergovernmental Panel on Climate Change (IPCC) and United Nations Environment Programme (UNEP) rather than individual studies”. He said the IPCC and UNEP “provide the scientific reference needed as they bring all views and assess the credibility and scientific basis”.

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The IPCC does not do original research, including attribution studies, but every five to seven years it compiles existing research to reach conclusions about climate change, including its impacts. The last IPCC report focused on that topic in 2022 said “increases in drought frequency and duration are projected over large parts of southern Africa”.

UNEP currently does not conduct attribution studies, with a spokesperson saying this was “due to resource constraints” but adding “we hope to do more in the future”.

Another loss and damage fund board member, who wanted to remain anonymous, said the fund should only disburse money for loss and damage caused by climate change. But they asserted that due to the “chicken and egg” link between climate change and El Niño, the current southern African drought is climate-driven and so its victims should be entitled to funding.

‘Theoretical disputes’

Mattias Söderberg, who works for humanitarian organisation DanChurchAid – which has been defining and addressing loss and damage since 2019 – said attribution “is not always easy”.

But, he added, “people facing disasters should not be left behind because of theoretical disputes about attribution”.

Speaking ahead of a visit to a Kenyan refugee camp for people displaced by what he calls “loss and damage and climate-related conflicts”, he said, “I’m pretty sure they will be frustrated if they knew funding to help them cope could be questioned.”

The loss and damage fund, with advice from scientists, should draw up categories of disaster that tend to be driven by climate change – like heatwaves and droughts but excluding earthquakes which are not, he added.

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Zoha Shawoo, who researches loss and damage at the Stockholm Environment Institute, said that even if climate change played only a small role in the latest southern Africa drought, previous climate disasters had made the region’s people more vulnerable to the drought.

In addition, the current dry spell leaves them more vulnerable to future climate disasters, she added. “If they don’t receive financial support for recovery, future losses and damages will be a lot worse,” she said.

Gernot Laganda, director for climate and resilience at the UN’s World Food Programme, said that a formal attribution requirement for the loss and damage fund feels like “overkill” for a still relatively small fund. Transaction costs should be kept as low as possible, he added.

Data gaps

Kimutai, who worked on the WWA study, said she was confident the group had enough data to reach its conclusions on this particular drought. But she told a webinar hosted by the CGIAR agricultural research centre last month that a lack of data in many poorer countries means a funding requirement of attribution to global warming would be “detrimental to climate justice”.

In 2022, WWA was unable to work out the role of climate change in a drought in the Sahel region of Africa, partly blaming a lack of data. One of the drought-hit countries was Mali – which is three times the size of Germany. Mali has just 13 active weather stations, while Germany has 200, according to Bloomberg.

Limiting frontline voices in the Loss and Damage Fund is a recipe for disaster

Kimutai added that, besides data, there is a lack of expertise in doing these kinds of studies in the Global South.

Any moves to deny funds to vulnerable people impacted by drought – whatever the causes – are likely to be met with anger. Speaking to journalists about the southern Africa emergency a few days after the WWA study was issued, Chikwe Mbweeda, Zambia director for the aid agency CARE, said that “for us, we definitely understand that [the drought] is coming from the climate change effects”.

(Reporting by Joe Lo; editing by Megan Rowling)

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Imagine losing your home to catastrophic floods, your loved ones to unprecedented hurricanes, your livelihood to raging wildfires, or your ancestors’ graves to rising sea levels.  

Then, to add insult to injury, imagine losing your voice and rights in the very UN institution mandated to alleviate the costs of these climate-related harms for the hardest hit in communities such as yours.  

Technocrats talking about you, without you; decisions made – including, ironically, on participation and stakeholder engagement – while you have no meaningful say. Justice denied from the outset.   

This could be the dire reality when the new board of the Loss and Damage Fund (LDF) convenes for the first time in Abu Dhabi (UAE) next week (April 30 – May 2). Designed to provide long-awaited justice for those suffering the most from climate impacts, the fund risks failing right from the start by limiting access for those it claims to support. 

Expectations mount as loss and damage fund staggers to its feet

Those most affected by the climate crisis know all too well the losses and damages they are suffering and how to repair these harms. Their involvement in the LDF is essential not only for its effectiveness but for its legitimacy and for justice. Even more than any other, this fund needs to be driven by people, to respect their rights, and hear their voices. 

Let’s start with the basics: public participation and access to information are human rights. Accountability, transparency and participation in decision-making are the hallmarks of democratic governance – and their importance for the LDF’s ability to meet local needs and priorities cannot be overstated.  

These fundamental rights are rooted in the understanding that people should hold power over decisions that concern their lives and communities. Science and experience show that such participation also leads to more effective and sustainable outcomes. Getting participation right from the start is essential to the LDF’s legitimacy, equity, effectiveness and potential for transformative change.  

Sidelined in planning 

The LDF would not exist if it were not for the decades-long relentless calls for justice and affirmative action by communities, civil society and Indigenous Peoples, which escalated to an impossible-to-ignore volume over the last few years.  

Despite these loud calls, rightsholders’ representatives were sidelined during the fund’s planning stages last year. While a small group of countries in a Transitional Committee debated the fund’s scope and aims, civil society consistently had to put up a fight merely to be let into the room. 

And history is repeating itself. The LDF’s Governing Instrument (adopted at COP28) reinforces the need to support local communities and recognition of their participation. Yet the first board meeting limits participation to two people per UNFCCC stakeholder group – some of which represent millions, even billions, of people – such as Indigenous Peoples, youth, and women and girls.  

Such overly restrictive numbers do not allow for the representation of the diversity of voices, groups and organisations under the umbrellas of these groups, and will lead to the exclusion of critical voices. 

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These limitations are in stark contrast with participation at another UN fund, the Green Climate Fund (GCF), which – while it still has a long way to go to enable effective participation – does not limit board meeting observer attendance either in number or by stakeholder groups. The GCF had a significantly higher attendance than the LDF at its first meetings.  

Restricted seating in the actual room will further limit direct interaction with LDF board members making the decisions. The claimed ‘space constraints’ behind the restrictions are particularly unconvincing, coming from a country that organised the biggest climate talks in history just a few months ago.  

Climate justice requires inclusion  

The LDF has the potential to set a new precedent for climate finance – one that values human dignity and amplifies the voices of its beneficiaries. This requires more than a token dialogue with a handful of stakeholders in the first meeting; it necessitates a broad, inclusive consultation process that genuinely influences the fund’s policies.  

By explicitly endorsing the principles of inclusion, non-discrimination, transparency, access to information, empowerment, collaboration, and accountability, and proactively enabling active participation at all stages – from designing board policies and assessing community-level needs to implementation and decision-making – the LDF could live up to expectations and deliver climate justice.  

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If the Board does not explicitly and meaningfully include the diverse voices of the rightsholders who are meant to be the LDF’s main beneficiaries, the fund risks becoming another bureaucratic relic, preserving the status quo of climate injustice.  

During its first meeting next week, the board has a chance to overcome business-as-usual, as decision-makers will discuss procedures for the participation of observers and stakeholders. It must radically choose to enable and support meaningful participation by the diverse range of groups involved.  

The time to act is now. At its inaugural meeting, the board must choose to champion transformative change and genuine justice, setting a course that will define the fund’s legacy. The lives and livelihoods of far too many are on the line.

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At Cop28, governments asked the UN’s climate change arm to organise a meeting of the fund’s new board “once all voting member nominations have been submitted, but no later than 31 January 2024”.

As the deadline passed yesterday, the different regional groups of developing countries had chosen 13 of their 14 representatives. Only two are women.

But developed countries have chosen none of theirs and a UN Climate Change spokesperson said they couldn’t convene the board until all the nominations are in.

Fijian climate ambassador Daniel Lund said “there is some concern that we’re losing a bit of time given that we have quite a bit that would need to be discussed”.

Mattias Frumerie is the Swedish climate ambassador and was on the transitional committee that helped set up the fund. He told Climate Home that the group was “still working on the distribution of the seats”, adding that it was “great to see the interest to be on the board”.

A source with knowledge of discussions said that the two major blocks of developed countries – the European Union and the Umbrella Group – were debating how many seats each should get.

The source said that the EU is arguing that the number of seats should be related to the amount donated to the fund. A European Commission spokesperson declined to comment.

The EU has pledged $447m to the fund whereas the Umbrella Group – which includes big economies like the USA, Japan and the UK – has only pledged $115m.

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On top of developed countries, there has also been no nomination for the seat for developing countries falling outside of the groupings for Africa, Asia-Pacific, small island developing states and least developed countries. This group is mainly made up of ex-Soviet nations like Armenia.

Work to do

After the board is formed, it will need to negotiate the terms and conditions on which the World Bank will host the fund.

That is likely to be contentious as developing countries have tried to limit the World Bank’s role.

A decision is supposed to be made by August 12, eight months after the end of Cop28.

A board meeting will then need to be held to sign off on the hosting agreement. Subsequently, governments’ pledges to support the fund will need to be turned into signed contribution agreements and sent over to the fund’s bank account.

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Only then will the fund will be able to start dishing out money to help victims of climate disasters in developing countries.

Around this time last year, there were similar fears about nominations to the transitional committee delaying its work.

Due to regional tensions, the Asian group failed to nominate its members to the committee until just over a week before its first meeting on 27 March. In the end, seven Asian countries had to share three seats.

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On day one of UN climate talks in Dubai, negotiators rubber-stamped plans to get the fund up and running. The arrangements had been hashed out by a transitional committee over five fraught meetings in the past year.

The Cop28 president Sultan Al Jaber hailed the decision as “historic”, with a broad smile, after watching delegates burst into a round of applause.

“This sends a positive signal of momentum to the world and to our work here in Dubai,” he added.

Initial pledges

Following the text’s adoption, a handful of countries promised contributions to the start-up phase of the fund. Germany and Cop28 hosts the United Arab Emirates committed $100 million each, followed by the United Kingdom (£40m or $50.5m), the United States ($17.5m) and Japan ($10m).

EU member states, including Germany, are expected to collectively deliver at least €225m ($245m).

The relatively paltry contribution from the US – the world’s largest economy – attracted immediate criticism. Mohamed Adow, director of Power Shift Africa, called it “embarrassing.

Avinash Persaud, special envoy to Barbados prime minister Mia Mottley and a member of the transitional committee, welcomed the “hard-fought historic agreement”. But he said the pledges were unlikely to represent new and additional resources.

“Because the fund was only approved today, we can’t expect [them] to open up new budgets… so this initial money will be coming from existing budgets,” he told a press huddle, as reported by Carbon Brief’s Josh Gabbatiss.

How the fund will work

Significantly more money will be needed to help vulnerable communities benefit from the new mechanism once it gets up and running. The fund is designed to receive contributions “from a wide variety of sources”, including grants and cheap loans from the public and private sectors, and “innovative sources”.

The World Bank is set to initially host the fund for four years, despite strong resistance to its involvement from developing countries.

All developing countries “particularly vulnerable” to the effects of climate change will be eligible to benefit from the mechanism. However, the definition of vulnerability – one of the thorniest issues – is not detailed in the text.

The agreement is an “early win” for the Cop28 hosts, as it sets the start of the conference on a positive collaborative tone, Ana Mulio Alvarez, a loss and damage expert at E3G, told Climate Home.

Speaking at the plenary session, several negotiators underlined the difficult compromises needed to strike a deal.

Compromise deal

Developing countries had initially opposed a role for the World Bank, airing concerns over high costs, slow procedures and the US influence on the institution. But they eventually relented and accepted a compromise, with certain conditions attached to World Bank involvement and an out after four years.

Rich nations attempted to broaden the pool of donors expected to contribute, but made limited headway. The text “urges” developed countries to provide financial resources to the fund, while other nations are only “encouraged” to do so “on a voluntary basis”.

The EU climate chief, Wopke Hoekstra, has said China and petrostates like the UAE, Saudi Arabia and Qatar should pay into the fund. Others want to broaden the donor base to countries with high-emitting economies categorised by the UN as developing nations like South Korea and Russia.

“The UAE’s contribution of $100 million is welcome, both for its solid cash and for the pressure it puts on the world’s biggest polluters to also step up and recognise their responsibility for decades of pollution,” said Teresa Anderson, climate justice campaigner with ActionAid International.

“Innovative sources” of finance could mean carbon taxes on international aviation or shipping, financial transactions or fossil fuels. France and Kenya are set to launch a coalition at Cop28 to develop these options.

Civil society experts have said much more work lies ahead and, ultimately, the success of the fund will depend on how much money it is equipped with.

The cost of loss and damage for developing countries is projected to reach $400 billion per year by 2030.

“Although rules have been agreed regarding how the fund will operate there are no hard deadlines, no targets and countries are not obligated to pay into it,” said Adow. “The most pressing issue now is to get money flowing into the fund and to the people that need it.”

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As a board committee member of a fund hosted by the World Bank, I want to warn them. Being hosted by the World Bank is expensive and it erodes your independence and identity.

I’m the civil society representative on the board finance committee of the Global Partnership for Education (GPE), which channels around $5 billion of funding to education projects in low and lower-middle income countries.

The fund has been hosted by the World Bank for about 20 years. For over twelve of those years, there have been recurrent board discussions about moving the fund out of the World Bank and the board will discuss this again next month.

Expensive

The costs of being hosted by the World Bank are one of the most significant concerns. In recent years, the core administrative charge paid to the World Bank for hosting the GPE secretariat has been rising.

At one point, the bank charged an administrative fee for hosting the secretariat that amounted to 12% of the GPE secretariat’s costs.

A few years ago, this went up to 17% and then the bank tried to increase it to 24%. This provoked outrage from the GPE board who negotiated it down to 20.5%.

GPE are told this is an exceptional arrangement and that all other fund secretariats hosted by the World Bank are being charged an administrative fee of 24%.

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This figure could go up at any time. Once you agree to be hosted, it seems the World Bank can change the rules and increase the levies.

One of the main reasons the World Bank’s fees are going up is because because of a wider financing crisis in the World Bank owing to the cost of its final salary pension scheme from the 1970s to 1990s.

In effect some GPE funds, raised in the name of education, are paying for luxurious retirements for ex World Bank employees who left work before GPE was even created.

These direct costs are exacerbated by other costs. The GPE has to follow the excessive and hierarchical salary structure of the World Bank – with all staff being employees of the World Bank – and effectively having to pledge loyalty to the Bank.

The costs of having the main office in Washington DC are considerably higher than most other locations. The travel, security and insurance costs are also high – with most staff flying business class and staying in five-star hotels.

Not independent

In 2012, an independent review of the GPE’s hosting arrangements raised the problem of having a GPE secretariat serving two masters.

The GPE board is relatively democratic and it should be able to develop its own strategy, policies and procedures. Being hosted by the World Bank limits this.

When the GPE board agreed to expand the staffing of the GPE secretariat, this was directly blocked by the World Bank who had a recruitment freeze in place.

These issues of independence were partially addressed by a 2019 memorandum of understanding between the GPE and the World Bank relating to staffing issues but there are still challenges.

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Being hosted by the World Bank “means operating within the business model of the host” (as flagged in the 2012 review). This includes following very heavy procurement and recruitment processes.

While some see it as a benefit that funds can draw on the World Bank’s expertise, this is not always neutral and it often comes with a certain perspective and even ideological baggage.

For example, the GPE has a strong position about not supporting any for-profit education provision – but agreeing this position was difficult when the World Bank itself was supporting one of the most problematic for-profit actors.

Loss of identity

Being hosted by the World Bank takes away a fund’s identity it country level. Many see the GPE as just another World Bank project.

This seems to be a view also held by some World Bank country managers. One particularly problematic dimension of this is that when countries want World Bank funds for education, they are encouraged to use the GPE pot – displacing other funds for education.

Something similar could happen with loss and damage or wider climate finance. The World Bank could see itself as absolved of any wider responsibility if it takes on the loss and damage fund. 

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It is not a surprise that the US and Europeans are keen to see the loss and damage fund hosted by the World Bank.

It would give them more control. It would fit within their business model and comfort zone for such structures.

But it would be a disaster from the point of view of effective action on loss and damage. We must avoid the mistakes made by the GPE.

David Archer is Action Aid’s head of programmes, a former civil society representative on the board of the Global Partnership for Education and a current member of the board’s finance committee.

Correction: This article was updated on 6 November to clarify that the World Bank takes a percentage of the running costs of a fund’s secretariat on a cost recovery basis. It is not correct to say, as this article originally did, that if the loss and damage fund gets $100 billion a year, $24 billion would go to the World Bank. For the GPE, the combined cost of having the World Bank as host of the Secretariat and trustee of the fund amounts to around 1.5% of annual income.

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The United Arab Emirates’ Sultan Al Jaber addressed the 24 members of the transitional committee by video link on Friday morning, the last official day of talks.

At Cop27 in Sharm el-Sheikh, governments tasked the committee with working out what a new loss and damage fund for climate victims should look like and present their proposals to Cop28 in November.

The fund is supposed to channel money to people who have suffered loss and damage caused by climate change. This could mean rebuilding homes after a hurricane or supporting farmers displaced by recurrent drought. Failure to reach consensus risks delaying support to those in need.

But developing countries were incensed by a proposal to host the fund at the World Bank, painting it as a US power grab. And rich-poor divides persisted on how to define the “vulnerable” groups eligible for funds and who gets to control spending.

Al Jaber accused the negotiators of dragging their feet and told them not to leave this task to ministers. “I expect you to deliver,” he said. “If I don’t see real and tangible results, that will not be acceptable.”

The committee was supposed to have three meetings this year but added a fourth to try and resolve deep splits between developed and developing countries.

As open negotiations resumed on Friday afternoon, that extra meeting was expected to run into extra time. Al Jaber said the Egyptian hosts could facilitate “extra hours or even an extra day in Aswan”.

Deal with the devil

Pedro Luis Pedroso Cuesta is a Cuban diplomat and chair of the G77+China bloc, which represents all the developing countries.

Speaking from Aswan, he told reporters on Thursday: “At this late hour, a small group of nations responsible for the most significant proportion of the stock of greenhouse gases have tried to bargain potential support for a Fund on one side with eligibility and administrative arrangements.”

Pedro Luis Pedroso Cuesta represents 136 developing countries (Photo credit: UN Geneva)

Referring to the 16th century tale of Dr. Faustus, who sold his soul to the devil, he said: “Accepting this Faustian bargain now would break the Cop when we need the greatest internationalism and solidarity to solve climate and other global challenges”

He told reporters that he did not want to single out any country but “since you’re asking, we have been confronted with an elephant in the room – and that elephant is the US”. He said they came to the talks with a “fixed idea” that the World Bank should host the fund.

World Bank controversy

Developing nations have argued that the World bank is too slow, inefficient, unaccountable and lacks the organisational culture to tackle climate change.

World Bank officials addressed negotiators questions in a closed-door meeting in Aswan on Tuesday but Cuesta was not impressed.

He said that consultations with the Washington-DC based bank had “displayed clearly” that it was “not fit for purpose in relation to what we’re looking for” and the fund should be set up as part of the United Nations instead.

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He pointed out that the World Bank only added tackling climate change to its mission last week and said this showed they lacked the “operational culture” of climate action.

With the World Bank as host, he said, the fund would not be legally or operationally independent from the bank.

“We know the history”

The bank was set up by the US and its allies after the second world war and the US is still its biggest shareholder and chooses who leads it. “We know the history. We know the politics. We know the manipulation,” said Cuesta.

He added that, under the bank, the fund also wouldn’t be accountable to all governments through the Cop climate talks and the United Nations Framework Convention on Climate Change.

Developed countries have argued that setting up a new independent fund would take longer than having the World Bank host it. But Cuesta said it would be “naive” to believe that speed is  rich nations’ real motivation.

The talks’ co-chairs released a draft text on Friday morning. Climate Home has seen it and it includes four options.

The fund could be hosted by the World Bank, with or without conditions. It could be an independent institution or there could be an open process to select the fund host.

Who benefits?

The second main division is over which countries are prioritised for funding. Developed countries want the funds to be allocated “based on vulnerability”.

There is no clear definition of vulnerability and Cuesta said this criteria would impede the fund’s ability to respond to recent climate-related floods in middle-income countries like Pakistan and Libya.

Developing countries fear that in practice “vulnerability” criteria mean funds will be restricted to just the world’s least developed countries (LDCs) and small islands developing states (Sids).

The 46 LDCS are mostly in Africa and parts of Asia. Major nations like China, India, Brazil, Nigeria and South Africa are neither LDCs or Sids.

A map of the world’s least developed countries, as defined by the UN. The map does not include Sids. (Photo credit: Unctad)

Further splits include developing nations wanting a target of $100 billion of funding a year by 2030 to be included and developed countries wanting to earmark budgets for slow onset events, recovery and reconstruction and small countries.

Negotiators have almost agreed one thorny issue though. The US had pushed for the fund’s board to include seats for nations that paid into the fund, sparking accusations that they were trying to rig the board in rich nations’ favour.

Friday morning’s draft said there would be 12 board members from developed countries and 14 from developing ones. There could also be non-voting members representing indigenous peoples and climate-induced migrants, although negotiators have yet to agree that.

Update: Negotiators worked until 1.30am but left Aswan without agreement. They will meet again in Abu Dhabi on November 3-5 to continue discussions.

The post World Bank controversy sends loss and damage talks into overtime appeared first on Climate Home News.

At a hearing in the European Parliament on Monday, Dutch politician Wopke Hoekstra said that the absence of taxes on kerosene jet fuel was “the biggest absurdity of all”.

“When I drive my car to a petrol station, 50-60% of what I pay is taxes,” he said. “But when a jet is refueled, there is no tax due – zero. What European thinks that makes sense?”

Hoekstra said a tax on jet fuel and other fossil fuels could provide reliable revenue for a planned loss and damage fund for victims of climate disaster in developing countries.

Lawmakers from the parliament’s environment committee are set to decide whether to accept Hoekstra for the position on Wednesday. Some from the centre, Greens and left-wing oppose his candidacy because he’s from the centre-right and, they say, has shown minimal interest in climate change as a minister in the Netherlands.

But the EU has so far failed to agree to tax jet fuel internally to raise revenues for member states, let alone send them to developing countries.

Convincing other countries to renegotiate aviation agreements would be harder still, experts told Climate Home News, particularly as Hoekstra is only going to be in post until EU elections in June 2024.

No wider support

Avinash Persaud is a finance adviser to the government of Barbados, which is pushing the influential Bridgetown Initiative.

Although this initiative is calling for taxes on polluters to fund climate action, he told Climate Home that calls for aviation taxes were only coming from a handful of European nations.

He said he hadn’t heard any officials from developing countries or from the US express enthusiasm.

Far from increasing taxes on air travel, the US recently handed $25 billion of public money to airports to help them expand and improve their facilities.

Greenpeace East Asia campaigner Li Shuo said that China will see proposals taxes on planes, fossil fuels and shipping emissions as shifting the responsibility of climate finance away from rich nations.

“For all the ideas of innovative finance, this is where we get stuck, between large developing countries’ skepticism and developed countries’ inability to pay,” he said.

Transport and Environment campaigner Jo Dardenne said that there had been efforts to get a global tax in the UN’s aviation body but “we’ve been disappointed time and time again”.

Tourist islands opposed

Dardenne said a group of nations could implement their own taxes in a “coalition of the willing”.

EU nations like Hoepstra’s Netherlands have pushed for an EU-wide aviation tax but this requires consensus from all 27 member states and tourism-reliant islands like Cyprus and Malta have blocked it.

Persaud said that in developing island nations like Barbados, tickets are already heavily taxed to pay for expensive airports built to international standards.

“The scope for adding to these without undermining development is limited,” he said, “but there maybe more scope in rich countries”.

Legal complications

While taxing plane tickets is relatively straightforward, taxing jet fuel is complicated legally as well as politically.

A 2020 study by Transport and Environment found that EU countries can tax most flights within the EU. These make about 40% of flights in the EU.

But taxing the other 60%, flights travelling outside the EU , sometimes requires renegotiating air service agreements with countries like the USA.

Some EU member states have acted unilaterally to cut air travel. France has banned domestic flights on routes where train travel is possible in less than two and a half hours.

The post EU’s nominated climate lead wants a global tax on jet fuel appeared first on Climate Home News.

Campaigners at a crunch meeting in the Dominican Republic this week said the US proposal on how to divide the board of the new loss and damage fund “tilts power towards wealthy nations”.

But, in the meeting room of a five-star hotel in Santo Domingo, US government negotiator Christina Chan yesterday told these campaigners that they were wrong.

“From our math it is equal,” she said. “It is balanced, so if you’re feeling like it’s not, I don’t know, our math works out that it is.”

The board’s makeup

Chan is part of the transitional committee on loss and damage, which is working out the details of a new fund to address the costs of climate destruction.

A US proposal published this week said that the fund’s board should include ten members from the wealthy Western Europe and Others group, which includes North America, Australasia and Turkey and hosts about an eighth of the world’s population.

It adds that four seats should go to the biggest financial contributors to the fund. Chan said yesterday that "we're not making assumptions of where those contributors are coming from".

But as rich nations have the most money, are disproportionately historically responsible for the climate crisis and currently give the most climate finance, these four are expected to be wealthy nations like the US, Japan, France, Germany and the UK.

The US proposes that seven seats should go to the four regional groups which make up the rest of the world. These are mostly nations the UN defines as developing countries, with the exception of Japan and some Eastern European nations.

There should also be two seats each for small island developing states and the world's poorest nations - known as Least Developed Countries.

Another four seats, the US suggests, should go to representatives of civil society, indigenous peoples, the private sector and philanthropy.

Campaigners response

While Chan called this "balanced", campaigners argue that it's effectively at least 14 developed country members against a maximum of 11 developing countries.

Responding to Chan's defence of this proposal, Climate Action Network campaigner Harjeet Singh told her: "On the question of contributors being given extra seats, from our perspective it's a principle issue, it's a moral issue. We do not even have a second thought who the primary contributors are. For us, it's rich, developed countries."

So if those four seats go to developed countries, Singh said "its lopsided". He added: "We can not move away from historic responsibility. We need to recognise the reason we are facing loss and damage is because of actions and inaction over the last 30 years."

Developing countries call for $100 billion loss and damage target

In the same meeting, Liane Schalatek from the Heinrich Boll Foundation told Chan: "It's not an equitable representation".

She said it is a model borrowed from banks like the World Bank, where those that pay in get the biggest say.

But she said it is not appropriate for this fund because developed countries have a historic responsibility to deliver funding because of their outsized role in causing the loss and damage.

Avinash Persaud, a transitional committee member from the government of Barbados agreed with campaigners.

Referring to rich nations' at least ten seats, he told Climate Home: “Developed countries are represented to that extent, not because of need nor population, but because they are a donor group, which makes sense."

"But", referring to the extra four seats for contributors, he added," we can’t then add them in again as donors. That’s double counting".

The post US denies rigging loss and damage fund’s board in rich nations’ favour appeared first on Climate Home News.

The 14 developing country members of the committee drawing up rules for a new international loss and damage fund included the target in their joint proposal, ahead of a crunch meeting in the Dominican Republic this week.

Citing a UN-commissioned report that foresees climate-related loss and damages reaching $150-300 billion a year by 2030, the proposal says $100 billion “is not meant as a ceiling but rather as a minimum commitment”.

Adao Soares Barbosa is a member of the committee from the south-east Asian nation of Timor-Leste. He told Climate Home that ideally money should flow sooner. “We need it now,” he said.

ActionAid campaigner Brandon Wu told Climate Home $100 billion “is quite scant in contrast to the actual need” but is “at least the right scale to begin the conversation”.

A rival proposal by the US and European submissions does not include a target. In climate talks, $100 billion is a highly charged symbol as rich nations promised and failed to deliver $100 billion a year in climate finance by 2020.

Zoha Shawoo, a researcher from the Stockholm Environment Institute, said that while a target is "useful for accountability purposes", it "has little meaning when it isn't legally binding".

Given that, she said, "I wonder if its's more useful to have a target that actually reflects the full scale of the needs". A 2019 study put it at $290-580 billion a year by 2030.

Tricky talks

Loss and damage refers to the destruction caused by climate change, that cannot be prevented or adapted to. After decades of pressure from vulnerable countries, rich countries agreed last year to set up a fund to address the costs of this destruction.

A group of 24 negotiators from around the world are meeting in Santo Domingo for the third of four meetings to hash out how the fund will work, ahead of Cop28 in Dubai in December. Talks will be held largely behind closed doors, to encourage frank and free conversation on thorny topics.

The documents published yesterday reveal the battle lines.

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The US and developing countries disagree over who should pay into the fund, who should get money from it, what the money should be spent on, how much money should flow, whether it should be delivered as grants or loans and how the fund should be governed.

Even the name is controversial. While developing countries want it to be known as the Loss and Damage Fund, the US has suggested calling it the Resilient Futures Fund.

Who pays in?

The question of who pays into the fund is among the most contentious.

When the European Union opened the door to a fund at the Cop27 climate talks last year, climate chief Frans Timmermans said large economies like China should also pay.

Kenyan president William Ruto courts logging controversy

But the EU eventually approved the fund without that condition. China and other developing countries remain opposed to asking any countries to pay in other than those the UN classified as developed in 1992.

The developing country proposal says that the fund will be given money by developed countries and "may also receive voluntary financial contributions from other parties".

The US proposal just leaves a placeholder for the topic with a footnote explaining that "there are currently differences of views" so "this needs to be discussed".

A shorter submission from the French government calls for funding from "high income/high emitting developing countries" as well as developed nations, the private sector, charity and possibly taxes on polluting sectors.

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A joint submission from Germany and Ireland says that while "developed countries have historic responsibility, all countries with responsibilities for loss and damage and in a position to do so should contribute to the fund".

Under these criteria, wealthy, polluting countries like Saudi Arabia, South Korea and Israel could be asked to pay in.

The case for China and India to contribute is far weaker, as their average incomes and historic emissions per person are much lower than developed countries'.

Who takes out?

The issue of who gets help from the fund is similarly controversial.

Rich nations stipulated money should go to "particularly vulnerable" developing countries - language agreed at Cop27. The US proposes tasking the fund's board "to develop a system for allocations based on vulnerability".

The developing country representatives argue they all suffer from climate impacts and should be eligible for funding "without discrimination or any form of exclusion".

US aims to limit loss and damage fund

Board membership

This board, the US says, should have 29 members. Under the US's proposal, 15 of the 29 are likely to be from developed countries with 10 from developing nations.

The remaining four would represent civil society, the private sector, philanthropy and indigenous peoples.

The developing country proposal says there should be an "equitable" balance between developed and developing countries and have one co-chair each from developed and developing countries.

Harjeet Singh from Climate Action Network told Climate Home the US proposal "tilts power towards wealthy nations" and "represents an ethical failing".

Debt traps

Developing countries are keen to receive money in a way that doesn't add to their debt while wealthy nations would rather raise money in a way which doesn't permanently deplete their coffers.

The developing country proposal says "the fund will be primarily sourced through grant-based public financing". The US says the money should be grants and concessional loans, which are loans given on better terms than the market offers.

The US envisions that the fund will have three sub-funds. One for slow onset events like sea level rise, one for recovery and reconstruction after climate disaster and one for small countries with a population of less than five million.

The board will be tasked with allocating money to each of these sub-funds "in a balanced way that takes into account factors that include vulnerability and demand", the US proposal says.

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The developing country proposal does not address what the money should be spent on, saying they will outline their thoughts this week in Santo Domingo.

Both proposals want the World Bank to act as trustee for the fund, managing its finances.

But the US one goes further in making the World Bank the host of the fund, providing the staff running the organisation. Developing countries want the fund to have a separate dedicated secretariat.

Wu said that getting the bank to run the fund would be a mistake because the fund "could be subject to aspects of [the World Bank's] governance and policies that run counter to key climate justice principles, particularly around equity".

"The Fund could be much more innovative and fit-for-purpose as a fully independent entity," he added.

The post Developing countries call for $100 billion loss and damage target appeared first on Climate Home News.

Developing nations successfully demanded at last year’s Cop27 climate summit funding for loss and damage caused by climate change, including a dedicated fund, which countries will adopt this year.

In climate negotiations, “loss and damage” refers to existing costs incurred from climate-fueled weather impacts, such as last year’s devastating Pakistan flooding.

EU puts Maroš Šefčovič in charge of climate policy

The new Loss and Damage fund should target the most vulnerable countries and focus on areas not already covered by development banks or emergency relief funds, two U.S. State Department officials told Reuters.

The European Union has taken a similar position. But the G77+China umbrella group of countries classified as developing by the United  Nations argues that they are all particularly vulnerable and should be eligible.

Need to specialise

US negotiator Christina Chan is part of a 24-country committee deciding how the fund will work before the Cop28 climate summit in Dubai can officially adopt it this year. The committee will meet again next week in the Dominican Republic.

“We don’t really want redundancy with existing funds, because that’s not an effective and efficient way to deal with the issue,” said Sue Biniaz, deputy special envoy for climate at the State Department.

Instead, she said, the new fund should develop an expertise “as opposed to covering everything in the universe.”

Germany set to miss net zero by 2045 target as climate efforts falter

The U.S. had wanted a two-year process to analyse funding gaps before launching a fund, but it went along with the Cop27 consensus for action this year, Biniaz said.

At the committee’s last meeting in July, the U.S. proposed focusing the fund on covering slow-onset events such as sea level rise and desertification, as such needs can fall through the funding cracks, said Chan. This would mean less focus on climate disasters like floods, heatwaves and storms.

She said the US also suggested the fund be used for post-disaster reconstruction if a country needs more beyond eligible development bank grants.

Reluctant evolution

The U.S. position on loss and damage has evolved in recent years, from a point at which Washington and the EU resisted even discussing the issue for fear of legal liability for historic emissions.

At Cop27, the EU agreed to a fund on the condition that China pays into it – although it later abandoned that insistence. The US did not block the Cop decision approving the fund.

Biniaz said she “violently opposes” arguments by some countries and environmental groups that developed countries have a legal obligation to pay into the fund.

Nonprofit Action Aid has said, for example, that the 1992 U.N. Framework Convention on Climate Change implies this obligation with the idea that industrialized nations responsible for emitting most of the carbon dioxide in the atmosphere over the last century should do more to address climate change.

“That’s just completely inaccurate,” she said on whether developed countries are liable, adding that the 2015 Paris Agreement did not include such an obligation.

Other sources

Instead, both Washington and Brussels say the fund should be filled from myriad sources including industry taxes, philanthropic donations or other schemes. Biniaz said one example might be revenues from the U.S.-proposed carbon reduction accelerator.

The U.S. and EU have also said a big economy like China could contribute, despite its low per person income and relatively small historic contribution to climate change .

Biniaz said this came up during recent bilateral meetings with China, but she did not offer more details.

Other negotiators and officials have proposed ideas including creating new revenue streams through taxing environmental pollution, such as methane emissions or shipping pollution and windfall profits from oil and gas.

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“We need to have a global system with a broad contribution heavily weighted to the richest people to make the biggest contribution,” said Avinash Persaud, special finance envoy to Prime Minister Mia Mottley of Barbados.

With many national budgets strained, Persaud said the idea of taxing emissions was gaining popularity in some countries.

Who benefits?

Another sticking point likely to emerge is who should benefit from a fund, with disagreement over which countries are most vulnerable

“It's very difficult to create a straight cut dividing eligible and noneligible,” said Dileimy Orzoco, senior policy advisor at climate advisory group E3G.

The world’s least developed nations and small island developing nations want to be prioritised for funding.

Others worry that limiting funds to these countries will leave out some of the worst hit by climate impacts, such as middle-income countries like Pakistan or the Philippines.

The post US aims to limit loss and damage fund appeared first on Climate Home News.

And they matter in domestic politics too, as we found out when a hostile Republican Congressman asked US climate envoy John Kerry yesterday if he was “planning to commit America to climate reparations”.

Before the Republican could finish his sentence, Kerry had shot back “no, definitely not” and asked him to put an exclamation mark beside the answer.

That pleased the Trumpian congressman from Florida but it angered many climate campaigners, after it was reported in some quarters as a refusal to pay into the new loss and damage fund, which the US had reluctantly agreed not to block at Cop27.

But that’s not how it was interpreted by Avinash Persaud, Barbados’s representative on the loss and damage transitional committee, and the veteran, Washington-literate climate campaigner Alden Meyer.

The word “reparations” implies liability and links climate rhetorically to slavery, Meyer said. It was a political trap that Kerry’s been around long enough not to fall into.

A friendly Democrat later asked Kerry about his goals for Cop28 and one of them was the creation of a loss and damage fund.

But historically, the US has been the main blocker not just of “climate reparations” but of loss and damage – and nobody has been more personally associated with that than John Kerry.

Whether it’s now the word he objects to or the principle, we’ll find out when the time comes for rich governments to make their loss and damage pledges, which campaigners are calling for at Cop28.

This week’s news:

• Kerry rejects “climate reparations” but praises loss and damage fund
• UAE’s Cop28 president plans “brutally honest” climate summit
• EU to push for fossil fuel phaseout ‘well ahead of 2050’ at Cop28
• Canada pledges US$340m to UN’s Green Climate Fund
• IEA celebrates energy transition minerals investment, as fears of shortage lessen
• After “sleepless nights”, governments strike deal on Green Climate Fund strategy
• Green Climate Fund backs scheme financing farming corporations accused of destroying forests
• ‘Historic milestone’: Ecuador nears vote to keep Amazon oil in the ground

…and comment:

• With corporate climate cheats on the chopping block, net zero is growing up
• The EU lacks ambition on Cop28 renewable targets

And domestic politics impinges on climate finance north of the US border too. Announcing an allocation to the Green Climate Fund (GCF) on Wednesday, Canada’s climate minister came close to doing what all rich country climate ministers must long to do: blame their finance minister for an underwhelming climate finance pledge.

After announcing the US$340m over four years pledge, former Greenpeace activist Steven Guilbeault said: “Would I like Canada to put even more money on the table? I’m the environment and climate change minister, not the finance minister unfortunately. But I think we can always do better”.

Still, the GCF had a busy week approving millions of dollars in new climate change projects and gavelled a new 2024-2027 strategy.

But that didn’t kept the fund from making some controversial decisions. The GCF also approved a $190 million project for a Dutch investment fund with a history of financing deforestation in the Brazilian Amazon. The project “is paying the polluters instead of having them pay,” one campaigner said.

The post What’s in a word? – Climate Weekly appeared first on Climate Home News.

In a combative discussion with Republicans on Congress’s house foreign affairs committee this Thursday, Kerry was asked by Republican Brian Mast if he was “planning to commit America to climate reparations”, adding the US would have to “pay some other country because they had a flood or they had a hurricane”.

Before he could finish, Kerry jumped in: “No. Under no circumstances.” As Mast moved to write “no” on a prop behind him, Kerry joked: “Why don’t you create an exclamation point beside it too?”

Some media outlets and campaigners interpreted this as a refusal to pay into a new loss and damage fund that is scheduled to be set up at Cop28 in November. But several experts told Climate Home that was the wrong interpretation, defending the USA’s position of rejecting liability.

At last year’s Cop27, countries agreed to set up a fund to help victims of extreme climate-related disasters, focusing on countries particularly “vulnerable” to climate change.

At this year’s Cop28, nations will clarify operational details such as who contributes money to the fund and who receives it.

Climate reparations

Alden Meyer, a veteran Washington-DC based climate campaigner and policy analyst at climate think-tank E3G, told Climate Home that Kerry was rejecting the notion of climate ‘reparations’, which “was in bold letters on the big chart that Chairman Mast had behind him as he asked the question”.

Meyer said that the US has “always rejected any suggestion of liability or that it must provide compensation for its historical emissions” and Mast “was using a deliberately loaded term to characterise loss and damage, and Kerry refused to take the bait.”

With corporate climate cheats on the chopping block, net zero is growing up

The word reparations implies liability, Meyer added, and is also “a particularly charged term in the US given our atrocious history on slavery and continuing systemic racism”.

In an interview with The Guardian in January, Kerry said the US was committed to contributing with loss and damage finance. “How can you look somebody in the eye, with a straight face, and not accept the notion that there are damages, there are losses? We see them all around the world,” he said.

Loss and damage fund

In yesterday’s Congress session, Kerry said that, among his objectives for upcoming Cop28 in Dubai, was the “finalisation” of the loss and damage fund created last year.

“(The fund) is simply a recognition…it does not have any liability in it – we specifically put phrases in that negate any possibility of liability but it is there to try and help some of these vulnerable less developed areas from the problem that they’re facing,” he testified.

Avinash Persaud, a finance adviser to Barbados’s prime minister Mia Mottley and a member of the transitional committee hammering out the details of the new loss and damage fund, defended Kerry’s position.

“There is an unhelpful conflation between climate reparations and funding an international loss and damage fund. Reparations imply payment for past deeds. The loss and damage fund finances a resilient recovery after a climatic event, including slow onset events,” Persaud said.

He also defended the USA’s “global solidarity”, saying that it contributes to international relief after disasters and is helping expand development banks’ lending for climate resilience.

But, he added “immediate relief is not enough” and linked rich countries “unwillingness” to contribute to a loss and damage fund to developing countries “unwillingness” to spend money cutting their emissions. “Solidarity, along the lines of capacity to contribute, is in everyone’s long-run interests,” he said.

In Congress, that argument was not shared by Republican Tim Burchett who said: “You’ve also agreed that countries need to pay poor and developing countries for loss and damage due to climate change, why do the good folks in east Tennessee – they work very hard for their dollars – why do they have to pay for a flood in Africa or South Asia?”

Kerry responded: “We’re not specifically paying for a flood in Africa although sometimes money may go to something like that but the United States is proudly the largest humanitarian donor in the world…we try to help the world”.

The post Kerry rejects “climate reparations” but praises loss and damage fund appeared first on Climate Home News.

Since 2019, the Danish NGO DanChurchAid has been monitoring projects, implemented by our local partners, that address loss and damage. I believe our experience can provide some helpful perspective for the ongoing negotiations.

As an NGO working across the humanitarian and development nexus, we were already monitoring, and reporting, on projects related to cutting emissions and adapting to climate change. However, we also wanted to learn more about the efforts to address loss and damage.

Loss and damage is a reality now. The people we meet in the drought-affected Turkana region in Kenya, the flooded villages in South Sudan, and the farmers who lost their livelihoods due to cyclones in Malawi, know what we are talking about.  

Defining loss and damage

Yet at the international level, there is no agreed definition, and no accepted marker to identify the projects. Our solution was to develop our own methodology.

The support we give to communities to reduce exposure to climate-related hazards, for example by setting up an early warning system for cyclones, is labeled as ‘adaptation’.

Meanwhile, the provision of emergency response, for example by delivering cash to families who lost their belongings, is labeled ‘loss and damage’.

Morocco’s centuries-old irrigation system under threat from climate change

One of the first lessons we could draw is that attribution is difficult. Is a drought climate-related or weather related? And are people being displaced as a result of the drought or due to local conflicts?

It is not clear-cut and, in reality, it is often a combination of factors. For people on the ground, the label doesn’t matter. They are concerned about whether any support for them exists at all.

We have therefore chosen a pragmatic, but still science-based, approach. We talk about climate-associated loss and damage, rather than climate-induced loss and damage. A small but important difference that can determine whether a community will receive support or not from a future loss and damage fund. 

Funding streams

Our monitoring indicates that the projects are funded from a variety of funding sources, both humanitarian and long-term development funds. That is relevant for the negotiations about ‘funding arrangements’ for loss and damage.

Most of our support is directed to rapid-onset disasters, such as a hurricane, while few projects have a focus on slow-onset events, like desertification, and non-economic loss. The gap would need to be addressed by the loss and damage fund, as it was also agreed at the Cop27 climate talks last year.

Senegal shows African countries are not passive beneficiaries of climate finance

Another lesson relates to how the projects are designed. More than four-fifths of our activities include elements of both loss and damage on one hand, and adaptation or mitigation on the other. That indicates that the projects not only build back to pre-disaster situation after a loss, or damage, but that they do so in a way that improves conditions. It means that communities are more robust when the next extreme event strikes.

The UN negotiations must ensure a new fund will be eligible for cross-cutting activities, addressing both loss and damage and adaptation, to ensure the long-term perspective. 

Local engagement

Finally, our monitoring makes it clear, that it is the local communities and local actors themselves, that are spearheading the work. They are the first responders, and those staying behind when the hazard is under control. Yes, they need support, but they are best placed to know what kind of support is needed.

Even if the new loss and damage fund is negotiated within the UN, decisions about the actual destination of the money must engage the local communities that are affected.

We need locally-led actions to address loss and damage, and this must be a priority when the new fund is operationalised. 

Mattias Soderberg is a chief advisor at DanChurchAid and co-chair of the climate justice group of the ACT Alliance

The post Identifying loss and damage is tough – we need a pragmatic but science-based approach appeared first on Climate Home News.

The UN warned against a “catastrophe” in Ethiopia, Kenya and Somalia, which it described as the epicentre of the world’s worst climate emergencies.

Donor countries have pledged a total of $2.4 billion for 2023, but only $0.8 billion in new financial support was announced at this week’s event. The US will provide nearly two-thirds of the money, followed at some distance by the European Commission, Germany and the UK.

The money raised at a pledging conference this week will help humanitarian agencies provide food, water, healthcare and protection services to over 30 million people across the three countries.

Tinebeb Berhane, country director for ActionAid in Ethiopia, told Climate Home News she was “extremely disappointed” and “saddened” with the outcome. “The pledges do not even touch the surface of the level of support needed on the ground”, she added.

Oxfam has called the commitments “dismally inadequate”.

The shortcomings of UN pledging events like this one will put the spotlight on the implementation of the landmark loss and damage deal struck at Cop27. Governments agreed to create a fund for vulnerable communities hit by climate impacts.

Climate-induced drought

The Horn of Africa has been suffering its worst drought in 40 years since October 2020. Five consecutive seasons of rainfall below normal levels have led to crops failing and farm animals dying.

A group of scientists estimated that human-driven climate change has made these events “much stronger” and “about 100 times more likely”.

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The World Weather Attribution group said the drought was made much more severe because of the low rainfall and increased evaporation caused by higher temperatures in the world.

Kenya, Somalia and Ethiopia combined now contribute less than 0.5% of the greenhouse gas emissions that cause climate change despite having 2.5% of the world’s population.

“People in the Horn of Africa are paying an unconscionable price for a climate crisis they did nothing to cause,” UN chief Antonio Guterres told the pledging event in New York.

The crisis has been made worse by conflicts and rising global commodity prices as a result of the war in Ukraine. More than 32 million people are facing acute food insecurity and 2.7 million people have been displaced.

UN advises against offsets for carbon removal technologies

The United States made the top pledge – an additional $524 million on previous announcements, taking its total for 2023 to some $1.4 billion. The European Commission committed $185 million, Germany $163 million, Britain $120 million and the Netherlands $92 million.

“This is a global problem that requires all of us,” U.S. Ambassador to the United Nations Linda Thomas-Greenfield told the event.

‘Moral failure’

Andrew Mitchell, the UK minister for development, said “the clear and present threat remains, and we must act now to prevent further suffering”. But aid groups have criticised the pledge made by the UK, branding it a “moral failure”.

A group of organisations led by the International Rescue Committee has called on donors “to take immediate steps to break the cycle of short-term, inadequate funding” in the Horn of Africa.

ActionAid’s Berhane hopes the limited funding promised will be delivered swiftly. “Time is a big factor for these life-saving humanitarian interventions,” she said.

The Eastern African drought is only one of the many climate-induced crises in which financial aid has been slow-moving.

Echoes of Pakistan

Devastating floods struck Pakistan last year, causing $10 billion in estimated damage. After a UN appeal, wealthy countries pledged a sum roughly sixty times smaller in support. But even those funds were slow to arrive.

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Subsequently, at a pledging event last January, a group of 40 countries, multilateral banks and private donors committed more than $8.5 billion towards Pakistan’s recovery.

But Pakistan’s climate minister Sherry Rehman said yesterday that “pledges made at international conferences solely for Pakistan have still not been realised”.

“UN flash appeals are no longer capitalised as they used to be,” she said, as “at least half of the UN flash appeals go unfunded”. She called for the loss and damage fund to be set up as soon as possible.

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Agreement to establish a “loss and damage” fund was secured at Cop27 in Egypt last November, but the deal did not spell out who would pay into the fund or how money would be disbursed.

Before Cop27, rich Western countries had long resisted calls from vulnerable states for a loss and damage fund, fearing it could make them liable for historic emissions.

A committee tasked with deciding how funding should work held its first, three-day meeting this week in the Egyptian city of Luxor. It includes 14 representatives of developing countries, and 10 from developed countries.

Logistics not substance

The talks did not substantively tackle contentious issues such as sources of financing or the type of projects the fund would cover, but there was some convergence between delegates over a road map to create a fund, said Mohamed Nasr, Egypt’s lead climate negotiator.

Asked if a fund would be up and running by the time of Cop28, which will be held from Nov. 30 to Dec. 12 in the United Arab Emirates, he told an online briefing: “Will it be created? I hope so and I assume so, and this is what we are working towards.”

“Will it be delivering? I think this is a question of how complex this fund will be, and what will be the governing modalities and the working modalities of the fund.”

Not much time

The main points of divergence at the Luxor meeting were over whether to identify gaps in the existing system of climate finance before looking at the mechanics of the fund, or to work on both in parallel, Nasr said.

“Although they have different views, in many cases there was this mood of cooperation and understanding and responsibility that part of the outcome in UAE has to be these funding arrangements and the fund,” he told journalists in an online briefing.

Delivering on time would be a “major challenge”, he added.

Nasr said that countries had not changed their positions since the Cop27 talks.

Countries differ on how to interpret the Cop27 decision and on what to prioritise, he said.

Who gets funds?

The Cop27 agreement said funds should go towards “developing countries, especially those that are particularly vulnerable to the adverse effects of climate change”.

That encouraged developing country governments to push to be recognised as “particularly vulnerable” in the recent Intergovernmental Panel on Climate Change scientific report

The G77+China block of developing countries has said that all of them are “particularly vulnerable” whereas the European Union has pushed for a more limited definition, although it has not spelled out its criteria.

At the transitional committee, Ireland’s negotiator Sinead Walsh said: “You can’t focus on all the the countries if you have to focus on particularly vunerable countries. I agree we need to know what that means. But the one thing I do know – and this is just as an English speaker, this is not coming with any expertise – is that “particularly” and “all” do not mean the same thing.”

At the briefing, Nasr told Climate Home: “Many countries, I think, don’t want to go into a discussion of vulnerability competition because this is the wrong direction…it’s not a productive discussion”.

“One could not say that a small island facing hurricane after hurricane is not particularly vulnerable even if they are middle-income or high-income countries,” he said, and “you can not say that Pakistan is not partiuclarly vulnerable with what they have faced”.

Another contentious issue is who will pay into the fund, with the European Union and other developed countries pushing for China to pay despite its small contribution to climate change, relative to its population size. That was not substantively discussed at this week’s meeting.

The committee decided it would need four meetings this year instead of three and that South Africa’s Richard Sherman and Finland’s Outi Honkatukia would co-chair the committee.

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This is true for southeastern Africa where the devastating passage of Cyclone Freddy laid bare low-income countries’ high vulnerability to extreme climate events.

In the worst-hit Malawi, the storm killed more than 600 people and displaced at least 650,000 more, while also dismantling infrastructures and livelihoods.

A patchwork of disparate tools under the loose umbrella of ‘loss and damage finance’ is now being fast-tracked to help countries like Malawi recover from Cyclone Freddy and prepare for future hazards.

But the nation’s leaders and international campaigners are urging rich nations to quickly deploy more substantial, structural and unconditional funds. If it takes too long for loss and damage money to be available – they warn – communities could be trapped in a state of perpetual vulnerability.

Devastating impact on Malawi

In Malawi extreme weather events, like floods and seasonal droughts, are becoming more frequent and more intense due to climate change.

Government estimates suggest the country loses an average of 1.7% of its GDP every year as a result of climate change-related disasters. It is already one of the poorest countries in the world.

A group of Malawians rushes towards a rescue boat after an extreme climate event. Photo: UNDP/Flickr

Cyclone Freddy was the longest-lasting and most travelled tropical cyclone ever recorded, according to meteorologists. The floods caused by the storm affected half of the country. Dozens of major roads and bridges have been swept away, making vast swathes of the country inaccessible by road.

It was the third extreme weather event to strike Malawi in a 13 months period.

Zoha Shawoo, a researcher at the Stockholm Environment Institute, says if communities cannot recover from the loss and damage caused by one event they will be more and more vulnerable to future ones.

“There is a need for urgency in delivering funds, but also for dedicated, long-term support for recovery and rehabilitation,” Shawoo told Climate Home News.

‘Funds are needed right now’

At Cop27 governments agreed to set up a fund for vulnerable communities hit by climate disasters. Now a UN Transitional Committee is tasked with setting the details of how that will work: who pays in, who benefits and how the money is handed out.

The group is made up of 24 government representatives (most of whom are from the developing world) and met for the first time in Egypt this week.

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A few days before the meeting kicked off, Malawian President Lazarus Chakwera said loss and damage payments are needed “right now”.

“Those nations that have made pledges in the past need to put their money where their climate change mouths are,” Chakwera told CNN in an interview.

Long road ahead

Concrete help is not expected to arrive from the UN loss and damage fund anytime soon though. While the inaugural meeting has been described as successful in laying the groundwork, some observers have expressed concern over the pace of the action.

The Transitional Committee has scheduled three more meetings this year before making its initial recommendations ahead of Cop28 in November. Then the fund will need to be filled and made operational.

The SEI’s Shawoo doesn’t expect to see money flowing from the fund for at least the next two years. In the meantime, she says developed countries should do everything they can to fill this gap with other forms of financing.

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Ideally, she says, this should take the form of unconditional, grant-based finance that goes directly to the local level.

Scotland became one of the first nations to stump up cash for loss and damage by giving a small grant to Malawi.

Speeding up support

In the aftermath of Cyclone Freddy, other measures to avert, minimise and address loss and damage are being fast-tracked.

A spokesperson for the World Meteorological Organisation (WMO) told Climate Home the tragedy had “added impetus” to the United Nations-backed initiative to get everyone in the world protected by early warning systems by 2027.

The head of the UN, Antonio Guterres, has now convened an advisory panel on the initiative made up of leaders of UN agencies, multilateral development banks, humanitarian organisations, civil society, insurance and IT companies.

They’ve chosen 30 vulnerable countries to focus their initial efforts on. These include Mozambique and Madagascar, which were hit by Cyclone Freddy along with Malawi.

Vulnerable communities must call the shots on loss and damage fund

Another initiative is known as the Global Shield, a G7 scheme for pre-arranged financial support to be quickly deployed in times of climate disasters.

The Global Shield has initial funding of $210m available, with Germany by far its biggest backer, and works with a group of countries that are highly vulnerable to climate change called the V20.

Its initial focus has been mostly directed at insurance-based measures like social protection systems, risk-sharing networks, and credit guarantees. Its promoters say this increases the leverage potential of the limited funding available.

But critics have pointed the finger at various pitfalls with insurance products including limited coverage for certain events, unpredictable payouts and obstacles to access to certain sections of the population.

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Germany and V20 told Climate Home News negotiations are driven by the recipient countries so the packages will include the most suitable tools for them.

Hopes for rapid Global Shield package

While there is no specific timeline, the expectation is the first batch of funding could be delivered by the end of 2023. The V20 Finance Advisor Sara Jane Ahmed says all parties need to “work round the clock” to get a deal with Malawi over the finish line.

“Extreme weather events are not new in Malawi. They should have resources available ahead of time so they could reduce the damage of the impact. That’s why we are accelerating things as fast as possible”, she said.

Alongside insurance products, Ahmed says the V20 is working on giving Malawi small grants so that impacted communities can replace infrastructure and livelihoods quickly.

A spokesperson for the German Ministry of Economic Cooperation and Development told Climate Home News the Malawian government is leading the in-country dialogue and determining its speed. “The Global Shield stands ready to start the work with Malawi and to in the process potentially fast track the development of solutions to prepare for the next climate disaster,” it added.

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The process for doing this was also agreed by setting up a Transitional Committee (TC) on funding loss and damage with 24 members representing different geographical and other constituencies which would meet three times before Cop28 in Dubai in December.

The TC has just been formed with some eminent people as members and will have its first meeting in March in Egypt. They will have to come up with ways in which the fund can be set up and managed for a decision at COP28.

As a veteran of the UN climate change process and having engaged on the topic on behalf of the most vulnerable developing countries and communities, I have some recommendations for the newly set up TC.

Loss and damage committee ready to start talks following Asian nominations

1. Do not operate on ‘unfccc time’

My first recommendation is the need for urgency.

In the last few days alone, hundreds of victims of human induced climate change have lost their lives and livelihoods in Vanuatu from two successive cyclones.

In Mozambique and Malawi, Cyclone Freddy hit both countries twice within a few days. They need help today, not tomorrow.

So please do not operate in ‘UNFCCC time’ which would mean talking and talking for years before a penny is available in the fund. Please try your best to get something up and operational by Cop28 rather than Cop29 or Cop30.

Do not make ‘perfect’ the enemy of ‘good enough’! An imperfect fund that starts to operate quickly is better than waiting years for the first dollar to be delivered.

Vulnerable nations set up alliance to prepare loss and damage action plans

2. Partner with experienced actors

The second message is on how to deliver funds and to whom. The existing funds under the UN climate process, such as the Adaptation Fund (AF) and the Green Climate Fund (GCF), take a long time to evaluate and approve. That money doesn’t start flowing for many years.

For the victims of a flood or cyclone that is absolutely unfit for purpose. The global humanitarian actors have a much better and fast delivery system to respond rapidly to such rapid onset weather events.

It is worth engaging with the UN Office for the Coordination of Humanitarian Affairs (OCHA), the Red Cross, the Red Crescent and the World Food Programme (WFP), among others, who have in fact developed methods of pre-positioning materials, as well as providing anticipatory funds.

However, not all climate change impacts manifest themselves as rapid onset extreme weather events. A major impact of human induced climate change is from sea level rise, which is quietly displacing thousands of people living in low lying coastal zones of islands and deltas.

Hence, this should be a very high priority for the TC under the UNFCCC, as it cannot be fobbed off on to other agencies.

3. Become a formative voice

My third and final message for the TC is to become the main voice and explainer of what loss and damage entails. This is still a highly confusing topic and needs to be explained to a wide variety of decision-makers very rapidly.

My request to the TC and UNFCCC Secretariat is to invest in a very robust and effective communication strategy for all your work on a rapid and regular basis.

This also means making your own deliberations as transparent as possible.  I hope that you will welcome and facilitate the engagement of observers to each of your meetings and meet with us after each meeting to share what you are working on and be open to engagement from us.

Let me end by wishing every success to the TC and hoping that it can be the first Committee set up under the UNFCCC that can operate in ‘reality time’, rather than ‘UNFCCC time’.

Saleemul Huq is the director of the International Centre for Climate Change and Development

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Nepal, Bangladesh, Senegal, Malawi, Jamaica, Trinidad and Tobago, Tonga and Vanuatu are exploring setting up national facilities to channel resources for climate disasters response and disburse money where it is most needed.

The initiative will help communities inform governments on how to respond to future climate shocks from a local perspective.

The alliance is being supported by the International Centre for Climate Change and Development (ICCCAD) in Bangladesh, and the International Institute for Environment and Development (IIED) in the UK.

Ritu Bharadwaj, a researcher at IIED, said the bottom-up approach would avoid “pre-conceived solutions” and ensure countries are “ready to deploy any additional funds which might be available in the future”.

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Money for climate victims

In a breakthrough deal at the Cop27 climate talks in Egypt, countries agreed to set up a fund dedicated to support vulnerable countries address climate-related losses and damages.

But it could be a long time before money is mobilised. A transitional committee is due to work out how the fund would operate, who will pay, who will benefit and how it will be governed and make recommendations ahead of the next round of UN climate talks in the UAE.

The 24-people committee is due to hold its first meeting in Luxor, Egypt, on the 27-29 March despite the Asia Pacific group’s failure to nominate their two representatives. Several sources told Climate Home News this was because of several countries competing for the positions.

Mohamed Nasr, Egypt’s lead climate negotiator and one of the committee members, said: “This issue is of extreme importance to everybody, so everybody wants to be sitting at the table.”

Two sources told Climate Home that nominations from the group are expected soon.

Locally-led solutions

The alliance will help vulnerable countries prepare for the handling of loss and damage funds, said Saleemul Huq, director of the ICCAD.

“Money is not going to come for a while so part of the exercise is to know how to use it when it comes,” Huq told Climate Home. “So this is a knowledge-first approach.”

Huq said the alliance will support the development of locally-led solutions, co-created with communities, which are cost-effective.

“It’s about getting a better handle on what is needed to respond to unavoidable climate impacts so countries are ready to address them when they come. People can’t afford to wait until the world wakes up and starts filling the coffers of the loss and damage fund,” he said.

Pooling resources 

To make the most of the patchwork of existing but limited funds, the alliance urged countries to create a national facility that pools funding from the private sector, development aid, philanthropies, insurance, debt relief mechanisms, national budgets and new funding opportunities under the G7-backed Global Shield.

These national entities can act as a ready vehicles to disburse any future loss and damage cash in a cost-effective, accountable and transparent way, researchers say.

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Christopher Bartlett, a member of Vanuatu’s national advisory board on climate change and disaster, said the nation was “one of the strongest allies” of the initiative.

Vanuatu is reeling from the devastation caused by two cyclones which hit the small-island state within 24 hours of each other last week.

Lubna Yasmine, joint secretary on climate change at Bangladesh’s environment ministry, described the approach as “very good”.

“It’s very important to put people at the center of the action because if we can help communities directly, they can solve their own problems and come up with innovative solutions,” she said. “There is no time for delayed action, we need to get to work immediately.”

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The move piles pressure on the block to choose its members or risk the world’s biggest continent going unrepresented at talks on setting up a loss and damage fund.

At last November’s Cop27 climate summit, governments agreed to set up a fund for vulnerable communities hit by climate disaster – a breakthrough after years of stalemate.

They said a 24-member transitional committee should work out the details of this fund, such as who pays, who benefits and who oversees how money is spent on the ground, ahead of the next major conference in Dubai.

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Governments agreed to nominate the committee’s members, which are carefully divided on geographic and wealth lines, by 15 December.

But they were slow to pick their members. Two months after the deadline, just ten of the 24 had been chosen.

According to the UN's website, the Asia-Pacific group of developing countries has yet to pick its two nominees.

A source with knowledge of deliberations said seven Asia-Pacific governments wanted their candidates chosen.

These delays have sparked fears that the process, and much-needed funding for climate victims, would be delayed.

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Saleemul Huq, a Bangladeshi climate scientist and veteran of all 27 Cop talks, said the delay was “certainly worrying” and “will leave very little time for the work [the committee] must do before Cop28”.

But, according to a document seen by Climate Home dated yesterday, the UN's climate division told committee members that the meeting would happen on 27-29 March in Egypt.

The committe's rules have yet to be drawn up but the UN's rules generally mean meetings can take place and make decisions with two-thirds of members present.

So the meeting could take place without nominees from Asia-Pacific - a continent on which most of the world's people live.

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The UN is piling pressure on the block, chaired by Pakistan's Nabeel Munir, to nominate its members, one committee member told Climate Home.

Sameh Shoukry, president of Cop27, will host a retreat for the committee on 24 and 25 March.

As of yesterday's document, the city and precise venues for both meetings had not been decided.

But a source with knowledge of arrangements told Climate Home the meetings will either be in Aswan or Luxor, two cities on the banks of Egypt's river Nile.

Munir and the UN's climate change division did not reply to a request for comment.

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At last November’s Cop27 climate summit, governments agreed to set up a fund for vulnerable communities hit by climate disaster – a breakthrough after decades of stalemate. But contentious questions remain.

A 24-member transitional committee is set to deliberate on who pays, who benefits and who oversees how money is spent on the ground, ahead of the next major conference in Dubai.

The deadline for negotiating blocs to nominate committee members was 15 December 2022. As of 31 January, only ten members had been announced.

One source involved in the committee, who did not want to be named, told Climate Home: “This is delaying the process a lot as we have lots of organisational matters that need to be agreed before work can start, and an already crazy international schedule of meetings.”

Another committee source said: “The delay gives a wrong signal that Parties are relaxed and not really assessing the amount of work needed. Official work is expected to start in March but there is a lot of prep that needs to happen before.”

Saleemul Huq, a Bangladeshi climate scientist and veteran of all 27 Cop talks, said the delay was “certainly worrying” and “will leave very little time for the work [the committee] must do before Cop28”.

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According to the Cop27 decision, the committee should have its first meeting by 31 March and at least two more meetings by the end of the year.

The committee is expected to present a detailed proposal at Cop28 in November, spelling out how a fund to compensate victims of climate change would work.

Competition for places

Various regional groupings are entitled to seats on the committee.

African, Latin American and Caribbean, and small island developing states have made their choices, as have the presidencies of Cop27 and Cop28.

Developed countries, which blocked loss and damage talks for decades before relenting last year, were allocated ten members. They have yet to nominate them.

A source with knowledge of their position said that they will announce all these nominations soon after a few formalities have been finished.

The bloc of the world's least developed countries (LDCs), has yet to nominate its two members. Developing countries in the Asia-Pacific region have not nominated their two.

A source with knowledge of developing countries' position told Climate Home that the delay was because nine countries wanted these four spots and were unwilling to back down.

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Madeleine Diouf, chair of the LDC group told Climate Home she expected nominations to be finalised this week.

Harjeet Singh from Climate Action Network International said that "any delay in setting up the institution will stall momentum in providing support to people already facing climate impacts".

Nominations have been made by the African group, the Latin American and Caribbean region, small island developing states, by the United Arab Emirates as Cop28 president and developing states not included in other categories.

The Latin American and Caribbean region has split its three members between six individuals. The first three will hand over to the next three at the end of June.

A spokesperson for the UN climate change division said: "We are planning to hold the transitional committee meeting as mandated by end of March. All groups are actively working on finalizing their nominations and we expect a full set of nominations this month."

This article was updated on 10 February to add a comment from a committee source

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It was the first time developed countries recognised the fundamental injustice of climate change: The poorest and most vulnerable people in the world, who’ve barely contributed to global emissions, are the ones disproportionately losing their homes, livelihoods, and entire ways of living to climate shocks.

But now comes a crucial test. Countries only agreed at Cop27 to establish the fund and create a “transitional committee” to decide how it will be operationalised.

They did not say where the money should come from, who should have access and under what conditions, and how the fund should be governed. It will be up to the transitional committee to ponder these questions and make recommendations for Cop28 next year.

We believe the key to a successful loss and damage fund is to build it around the needs and priorities of the world’s most climate-vulnerable people. Strong evidence shows that existing climate finance is not only insufficient, but also fails to reach the poorest and most marginalized groups.

In a detailed analysis we prepared for Cop27, we showed that existing funds like the Green Climate Fund and Adaptation Fund exclude those who are in greatest need because of their governance and their delivery mechanisms.

Based on our analysis, we identified guiding principles for loss and damage finance that delivers for climate justice:

Listen to affected communities and let them decide

Too often, climate investments are disconnected from the realities of vulnerable communities. The results are then at best ineffective, at worst harmful.

The new fund should enable the people most affected by loss and damage to decide how finance is used. This means including civil society – in particular, people from vulnerable communities – on the fund’s board.

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At the same time, within countries, devolved decision-making structures can be used to enable local communities to manage project budgets and determine how best to spend the funds they receive.

The transitional committee can start putting the new fund on the right track by organising consultations with local governments, local funders, and representatives of grassroots groups, to ensure their insights are reflected in the design of the fund. Ideally, these actors would be members of the committee itself, but the text of the Cop27 decision implies that it will be solely national governments.

Provide direct access to funds when they’re needed

Most climate finance flows through competitive processes. These can be very cumbersome for recipients and take years to complete. The loss and damage fund must do better. When a disaster hits, it is irrelevant and unfair to ask the victims to prove their worth. It’s even worse to make them compete with one another.

The new fund should avoid difficult requirements for accessing funds that delay the delivery of finance and exclude those without lots of money and know-how. Instead, the fund should prioritise quick and efficient access. The transitional committee can look for examples in humanitarian aid as well as in the Green Climate Fund and Adaptation Fund’s enhanced direct access pilot programmes.

Provide grants, not loans, and take a long view

Most climate finance today is delivered as loans, not grants. This exacerbates recipient countries’ debt burden and limits their ability to develop. Loss and damage finance should be grant-based.

Moreover, instead of supporting one-off projects, the fund should seek to provide sustained support, recognising that rebuilding after a disaster takes time, and often communities experience additional shocks during their recovery.

The fund should also support small grants and unconditional cash transfers, which are delivered quickly to affected people. The transitional committee should start by looking at existing examples, such as the GEF/UNDP small grants programme.

The Cop27 decision has the potential to prove historic and transformative – but only if countries follow through both with real money, and with a fund design that puts vulnerable people front and centre. We look forward to lively and productive discussions to inform action at Cop28 in Dubai.

Zoha Shawoo is a researcher at the Stockholm Environment Institute, working on climate inequality, sustainable development & loss and damage.

Inès Bakhtaoui is also a researcher at the Stockholm Environment Institute, working on climate change adaptation, loss and damage, finance, climate justice.

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The G77+China bloc of developing countries wanted all developing countries to be eligible for the funds. The European Union – which caused a lot of climate change and so will be expected to pay into the fund – wanted the money to only go to “particularly vulnerable” developing countries.

In the end, the two sides settled on agreeing to set up a funding arrangement and funds “for assisting developing countries, especially those that are particularly vulnerable to the adverse effects of climate change”.

That sets up a battle over how to define which developing countries are “particularly vulnerable”. That battle will be fought over the next twelve months by the 24 members of the new transitional committee.

The European Commission’s vice-president Frans Timmermans meets Pakistan’s environment minister Sherry Rehman (Photo credit: European Commission/Twitter)

What does vulnerability mean?

Vulnerability to climate change has three aspects. Is your country at risk of floods, storms, heatwaves, droughts, sea level rise and all the other nasty things climate change can throw at you? Are there people and precious things in the areas of the country at risk? And does your country have the money, experience and government capability to deal with these disasters?

Some countries, like Australia and the USA, are geographically vulnerable to fires, heatwaves and droughts but have the money to deal with them. Others, like Mongolia or Libya, don’t face any particularly severe climate threats but would struggle to deal with any that they did.

Measuring vulnerability by country is difficult and inherently flawed. Climate change is felt by people not nations.

The Notre Dame Institute judges Switzerland to be the least climate vulnerable country and Niger to be the most vulnerable. But an elderly homeless person in Switzerland will find it harder to deal with a heatwave than the president of Niger does.

As the Adelphi think-tank’s Janani Vivekenanda told Climate Home: “If you want to ensure that the most vulnerable are getting the support that they need, this is often at the sub-national level. You have pockets of fragility, of communities that are particularly vulnerable because they are politically excluded. They are marginalised communities, they are not part of the state architectures.”

What does the EU want?

Of the wealthy nations, it was the EU that first ended its decades-long resistance to dedicated loss and damage finance. It was then the bloc most active in placing conditions on that support.

Its negotiators have been tight-lipped over who they want to exclude. The European Commission’s climate lead Frans Timmermans said at Cop27 that China should pay into a loss and damage fund, which implies that it wouldn’t be a beneficiary.

The European Commission’s chief negotiator Jacob Werksman said at a Politico event recently that the UN climate convention’s classification of developed and developing countries, based on who was a member of the OECD in 1992, is out of date.

He added: “We have to reach the particularly vulnerable. It’s still for the negotiators to work on what that means. For us, I think it means setting a priority that really does focus on the countries that are recognised as vulnerable from both a physical and economic point of view but also takes into account vulnerable communities in countries that might have capacities as a whole that might describe them as middle-income in nature.”

Analysis: Who should pay for loss and damage? Spoiler: not China

In UN climate talks, particularly vulnerable has been used to mean small island developing states (Sids) and the world’s poorest countries – known as least developed countries (LDCs). This would exclude countries like Pakistan, which suffered catastrophic floods this year.

Timmermans clarified at Cop27 that “particularly vulnerable” would extend to Pakistan, in his view.

What do developing countries want?

In United Nations climate talks, 134 developing countries are represented by the G77+China bloc. After Cop27 ended, their chief negotiator on loss and damage Vicente Yu tweeted that “all developing countries are particularly vulnerable”.

He told Climate Home that the characteristics of being particularly vulnerable, as defined in the 1992 UN Framework Convention on Climate Change (UNFCCC) and the 2015 Paris Agreement, are applicable in one way or another to all developing countries.

The UNFCCC says that “low-lying and other small island countries, countries with low-lying coastal, arid and semi-arid areas or areas liable to floods, drought and desertification, and developing countries with fragile mountainous ecosystems are particularly vulnerable to the adverse effects of climate change”.

It adds to the list “countries whose economies are highly dependent on income generated from the production, processing and export, and/or on consumption of fossil fuels and associated energy-intensive products” and “landlocked and transit countries”.

Indeed, this definition is broad enough to include every nation in the world.

What do the poorest countries want?

Senegal’s Madeleine Diouf represents the smaller, poorer group of countries known as the LDCs. Diouf pointed to the narrower interpretation offered by the Intergovernmental Panel on Climate Change (IPCC). She said: “There is a definition for loss and damage, where the existing capacity of the country is key.”

In a 2022 report, the IPCC defined vulnerability as “the propensity or predisposition to be adversely affected” and said it “encompasses a variety of concepts and elements, including sensitivity or susceptibility to harm and lack of capacity to cope and adapt”.

They added: “Global hotspots of high human vulnerability are found particularly in west, central and east Africa, south Asia, central and south America, small island developing states and the Arctic.”

Those hotspots cover all of the developing world except southern Africa, north Africa, the Middle East, southeast and east Asia. These regions are generally wealthier.

High income countries are in dark-green. Upper middle in light green. Lower middle in light purple. Least developed in dark purple. (Photo: World Bank)

In its loss and damage fund proposal, published before Cop27, the small island negotiating group (Aosis) uses similar language to that pushed by the EU. It stresess the need to protect “the vulnerable especially the particularly vulnerable such as Sids and LDCs”.

How do you measure vulnerability?

In March 2022, the IPCC tried to map vulnerability. It was contentious, giving a flavour of the battle to come.

Its classification was based on the INFORM Risk Index and the World Risk Index, which use indicators such as access to basic infrastructure and health care, nutrition, extreme poverty levels, literacy rates, inequality, governance and perception of corruption.

It did not take into account exposure to sea level rise, storms, heat stress or floods – now or in future projections. That reflected a lack of consensus on how to compare the severity of various climate hazards.

On this basis, much of sub-Saharan Africa was judged to have “very high” vulnerability. China was “medium” while much of the Arabian Gulf, much of South America and parts of southern Africa were “low”.

Some government representatives expressed concerns the national averaging couldn’t account for differences within countries. Others considered criteria on governance and corruption as policy-prescriptive and biased towards wealthy nations. They did not approve it for inclusion in the report’s “summary for policymakers”.

A draft map on observed human vulnerability which was deleted from the report’s summary for policymakers. A similar map was published in the full report. (Source: Draft SPM IPCC Working Group II)

The US-based Notre Dame Institute combines geographic factors with countries’ ability to adapt for a more precise ranking. To measure a country’s food system vulnerability, it forecasts how much cereal yields will change, how dependent a country is on food imports and its agricultural capacity.

It placed China at 68 out of 182 countries with adequate data, where a low number means less vulnerable.

Ultimately, vulnerability is not static. Who gets money will be determined as much by political relations and resources available as objective indicators of need. For rich countries, that may come down to: not China.

The post Which countries are ‘particularly vulnerable’ to climate change? appeared first on Climate Home News.

This was a big breakthrough, but it came with a catch: they want to expand the donor pool. Who pays into the fund is still open to debate.

For existing channels of climate finance – to cut emissions and adapt to climate impacts in developing countries – the obligation to contribute falls on a list of countries drawn up in 1992. That list is based on membership of the OECD at the time: Western Europe, North America, Japan, Australia and New Zealand.

The world has changed in the past three decades. Some countries have become much wealthier and more polluting.

“I think everybody should be brought into the system on the basis of where they are today,” the European Commission’s Frans Timmermans argued. “China is one of the biggest economies on the planet with a lot of financial strength. Why should they not be made co-responsible for funding loss and damage?”

There are two main counterarguments: history and population.

‘Finger-pointing’

Every lump of coal and gallon of petrol burned since the industrial revolution has stoked the threat vulnerable communities face today. Early adopters of fossil fuels bear the biggest responsibility for cumulative emissions.

And when you take China and India’s huge populations into account, personal consumption levels are still much lower than North America’s or Europe’s.

The carbon footprint of a Chinese person today is just over half that of a US resident’s and only slightly bigger than a European’s. Indians are much less polluting, on average.

Greenpeace East Asia analyst Li Shuo told Climate Home that developed countries’ “finger-pointing” at China at Cop27 “indicates to me that countries are more willing to fight each other than climate change”.

Analysis: What was decided at Cop27 climate talks in Sharm el-Sheikh?

More compelling targets for expanding the donor pool would be development success stories like South Korea, Singapore and Israel, or countries that have got rich off oil and gas like Qatar, Kuwait and the UAE.

The arguments over who should pay will be hashed out by 24 people on a transitional committee of the planned loss and damage fund. After three meetings in 2023, the committee will report to Cop28 in the UAE in December.

Many of the same considerations apply to parallel negotiations on a broader climate finance target for 2025 onwards.

Who caused the climate crisis?

Modern-day taxpayers may be reluctant to accept blame for their country’s historic emissions for a couple of reasons. One is that the harm done by greenhouse gases was not always obvious. Another is that for many countries, it was not the ancestors of today’s citizens that profited from pollution, but their colonisers.

Counting emissions only from 1990 mostly solves these problems. By then, scientists were in no doubt that humans were causing climate change and most of the world had freed itself from colonial rule. There’s also a fairly comprehensive dataset for this period.

So a reasonable measure of responsibility for causing the climate crisis would be a country’s cumulative emissions since 1990 divided by its current population. That shifts the onus onto countries that have developed rapidly since 1990, but only slightly. By this metric, China and India are still nowhere near as polluting as the USA, UK or Germany.

EU-developing countries’ Cop27 deal offers hope to climate victims

The countries who caused the climate crisis are the ones who currently pay into climate finance – with a few exceptions.

No Arabian Gulf state is counted as developed in the UN climate process. But Qatar’s emissions per capita since 1990 are higher than the US’s or Germany’s. The emissions of the United Arab Emirates (UAE) and Saudi Arabia are similarly high. Qatar and the UAE are in the top 20 emitters per person in Carbon Brief’s analysis of emissions since 1850.

Israel, Singapore and South Korea also avoided the “developed” classification. But they are not far behind Germany in per capita emissions since 1990. There’s a decent case for them paying in to a loss and damage fund.

Who can afford to pay?

Working out who can afford to pay is easier than attributing blame - as you don't have to deal with history. But the conclusions are the same. It's the traditional developed countries who can afford to pay - plus a few others.

Although China's wealth has soared over the last 30 years, the average Chinese person earns a third the amount of the average European.

There are a few countries which the UN's climate system defines as "developing" though that are richer than some "developed" countries. Singapore and Qatar are among the richest nations in the world.

Israel, the UAE and South Korea have similar wealth to Europe. Saudi Arabia is comparable to poorer European countries like Portugal and Lithuania.

What difference would it make?

If these countries did pay, how much should they pay? The ODI think tank has previously calculated each developed country's "fair share" of the collective $100 billion climate finance target for 2020.

At Climate Home's request, ODI researchers ran the numbers on potential new contributors. They found that adding the richest and highest emitting countries would not make a huge difference to the overall numbers, due to the size of their economies.

Based on their income and historical emissions, Qatar, Singapore, Israel, the UAE, Kuwait and Brunei's individual fair shares were each less than 1%. South Korea's fair share would be larger at 4%, comparable with Canada. South Korea voluntarily provides some climate finance - $200m in 2020.

UN nature pact nears its ‘Copenhagen or Paris’ moment

While the moral case for China paying in is weaker, it could be a gamechanger if it did. Based on its total income, its fair share of any climate finance target would be 24%, the ODI found. Based on its total historical emissions, its fair share is 36%.

In practice, climate finance flows have never been determined by a top-down assessment of what is fair.

"In the absence of a burden-sharing mechanism for the new climate finance goal, China could decide to provide climate finance without making a meaningful difference to the total resources available," said ODI economist Laetitia Pettinotti. "This is what the US has done."

Among the current set of donors, the US's "fair share" is 43% of the climate finance. But, due mostly to Republican opposition in Congress, it pays a fraction of this.

Timmermans' attention would arguably be better directed westwards. Never mind China, South Korea and Qatar: getting the USA to cough up is the biggest challenge for climate victims seeking loss and damage funds.

The post Who should pay for loss and damage? Spoiler: not China appeared first on Climate Home News.

A shortage of weather monitoring stations in places like West Africa’s Sahel region make it difficult to prove a disaster was caused by climate change.

But that shouldn’t stop people affected by disasters like droughts from getting money to rebuild their lives when their livestock die, scientists Friederike Otto and Joyce Kimutai told Climate Home.

At Cop27 in Egypt last weekend, countries agreed to establish a fund to support climate victims and tasked a transitional committee with working out the details by Cop28 in Dubai next year.

UN nature pact nears its ‘Copenhagen or Paris’ moment

This committee will work out how to determine under what circumstances rich countries should pay out funds to developing ones for climate disasters.

Last week,  scientists from World Weather Attribution said they could not work out climate change’s role as in this year’s food crisis in the Central Sahel region of north-west Africa.

Erratic rainfall in 2021 triggered a severe food crisis, leaving 9.7m people in Burkina Faso, Mali and Niger facing hunger.

Scientists used three observational data sets and three indices of wet season characteristics. These were how much it rained in June, when it started raining and how long it rained for. They concluded that they “could not detect significant trends or a climate change influence in the 2021 rainy season.” 

What was decided at Cop27 climate talks in Sharm el-Sheikh?

But they said this could be due to uncertainties in the observational data and problems when working out the climate models for drought. 

“It could either be because the data is quite poor or because we have found the wrong indices. Or it could be because there really is no climate change signal,” said Friederike Otto, co-lead of World Weather Attribution. “We have no way of identifying which of these three options it is.”

The data gaps are partly due to a lack of weather stations in Africa. The data gaps are partly due to a lack of weather stations in Africa. Mali, for example, has just 13 active weather stations, compared to 200 in Germany – a country one third the size of Mali, Bloomberg reports.

Weather stations are expensive to set up and maintain but are critical to understand the current and future climate trends. 

In low-energy finish, oil and gas escape censure at Cop27

“The real problem is the long-term investment in capacity building,” said Otto. “That’s not just about building weather stations, but about [investing] in people.” 

Climate attribution informs the debate on loss and damage. 

Joyce Kimutai, climate scientist at the Kenya Meteorological Department, said there are serious concerns about attempts to connect loss and damage finance directly to attribution data. 

“It’s an ethical issue because if you do not provide compensation for losses and damages [in the case of] events that cannot directly be attributed to climate change or where the signal is not good enough, it’s going to really disadvantage communities that are the most vulnerable and most exposed,” she said. 

“This kind of finding is not atypical for regions of very high [climate] vulnerability,” said Otto. “That needs to be taken into account when designing the mechanism by which a loss and damage fund releases finance. If you would require proof of the role of climate change every time funds are released, you will basically create a fund that benefits the Global North [developed countries],” she said.

EU-developing countries’ Cop27 deal offers hope to climate victims

“The actual release of the funds cannot be directly linked to concrete [data] and a regional attribution study,” said Otto. 

“You cannot design a loss and damage fund completely independent of any scientific evidence, because then we can also get loss and damaged funds after an earthquake,” she acknowledged, but said other factors should also be taken into account, such as the country’s overall vulnerability to climate shocks. 

The loss and damage fund will be paid in to by developed countries and perhaps some wealthier or more polluting developing ones. The funds will go to “vulnerable developing countries”.

The transitional committee will work out the definition of “vulnerable”. It does not have an official definition in the UN climate process.

It has previously been used to describe the world’s least developed countries and small island states.

Greenwash alert as Cop27 draft allows double claiming of carbon credits

But the European Commission’s climate lead Frans Timmermans said last week that it should be broader than that, including countries like Pakistan which aren’t among the world’s very poorest.

The developing world’s lead loss and damage negotiator Vicente Yu tweeted yesterday that “all developing countries are particularly vulnerable”.

“What do we mean by vulnerability and losses and damages?” asked Kimutai. She said the African network on loss and damage is working hard to define these terms over the next year, ahead of Cop28. 

Instead of looking at the climate attribution for every specific event, regional climate trends underpinned by data and the vulnerability of certain ecosystems, such as drylands, should be taken into account, said Kimutai. 

The post Scientists warn data gaps must not block loss and damage appeared first on Climate Home News.

Developing countries have long called for the rich countries which disproportionately caused climate change to pay to repair the damage caused.

While keeping up these calls, groups like the Alliance of Small Island States (Aosis) and the influential prime minister of Barbados Mia Mottley are now switching their focus more to polluting companies rather than governments.

Developed governments have long resisted setting aside funds to address loss and damage, for fear of being held legally responsible for their pollution. But they have been more open-minded about calls for private sector funds.

Michai Robertson, Aosis lead finance negotiator told Climate Home that there should be a universal tax on the fossil fuel and other carbon intensive industries. “It’s time for the private sector to stand up and we need to hold them accountable”, he said.

UN gives platform to convicted fraudster lobbying for African gas

Mottley made a similar call in her Cop27 opening speech. “It can not only be an issue of asking state parties to do the right thing,” she told leaders. “The oil and gas companies and those who facilitate them need to be brought into a special convocation between now and Cop28.”

She recently pitched the idea on the phone to US climate envoy John Kerry, according to her advisor Avinash Persaud.

Kerry later told reporters they “had a deep discussion” and “found a lot of agreement on where we’re heading and what we have to do here”. He did not go into details and the state department did not respond to a request for comment.

Asked about Mottley’s proposal, EU negotiator Jacob Werksman told Climate Home: “We’re all looking for innovative finance right…we’ve missed our $100bn goal, its proved to be much more of a stretch than we imagined.”

But, he said, “the idea of taxing oil companies is a very kind of headline notion. We’d have to know much more about the details of what that means in practice. The EU itself, in terms of the Commission, doesn’t have the authority to do that kind of taxation”.

‘Toxic cover-up’: UN blasts oil majors’ fake net zero pledges

Asked about a fossil fuel levy for loss and damage, the African Group’s lead loss and damage negotiator Alpha Kaloga told Climate Home: “This is something that we should explore”. He added: “We do support innovative sources of finance such as revenue from divestment from fossil fuel subsidies by developed countries, debt cancellation, Tobin taxes on [financial] transaction and air passenger levels, based on the historical responsibility of developed countries”.

A recent NGO report found that over the last decade, climate-induced economic losses suffered by a group of 58 vulnerable nations, known as the Vulnerable 20, amounted to just 1.7% of the fossil fuel industry’s profits.

Robertson said Aosis’ proposal was just at an “exploratory phase” and that there are “limitations” on the authority of the UN’s climate talks. If a Cop meeting reaches consensus, it can ask all governments to do things like set taxes but they cannot order them to.

Persaud said Mottley’s proposal is that, to avoid raising the cost of living, the levy would start at zero on today’s prices. But every time, the price of coal, oil and gas dropped by 10 percentage points, a 1% levy would go to a loss and damage financing facility.

As Glasgow forest pledge turns to action, most signatories drop out

When an independent agency declares a climate disaster or event in a country then money, perhaps based as a percentage of GDP, would be disbursed to the government to spend as needed, Persaud said.

He suggested the fund could be based on a similar model to the International Maritime Organisation’s oil pollution compensation funds. Those funds are financed by contributions paid by entities that receive certain types of oil by sea. The contributions are based on the amount of oil received and cover expected claims and the costs of administering the funds.

Details around the governance structure still need to be worked out but Persaud said the mechanism must be “dedicated and simple”.

“Every mechanism that requires a lot of institutional development, a lot of boards and flawed structures tend not to favour the powerless,” he said.

As Cop27 kicks off, where are the coal to clean deals at?

While he wanted more details on a fossil fuel levy, the EU’s Werksman said that there were “interesting examples” of innovative finance from specific sectors.

He mentioned the UN aviation body’s (Icao) rules which mean airlines have to buy offsets to cover emissions above a certain cap and the cap on shipping sector emissions which the UN’s shipping body is considering.

In September, United Nations secretary general António Guterres called for a windfall tax on oil and gas profits to fund loss and damage and to help people struggling with high food and energy prices. “Polluters must pay,” he said.

This article was updated on 9/11 to clarify Antonio Guterres proposal and on 11/11 to update Alpha Kaloga’s comments.

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It is more than 30 years since vulnerable nations first demanded support to address the losses and damages caused by fossil-fueled storms, floods and sea-level rise. Rich countries, wary of endless liabilities, pushed back. But with costs of extreme weather mounting, the issue has become unavoidable. It is set to dominate negotiations in Sharm el-Sheikh, Egypt.

The Alliance of Small Island States (Aosis) has drawn up plans for a Loss and Damage Response Fund. This is an evolution of the “facility” proposed by developing countries and opposed by wealthy ones at the Cop26 Glasgow summit last year.

Michai Robertson, of Antigua and Barbuda, lead climate finance negotiator for Aosis, told Climate Home the fund could centralise and disperse public and private sources of finance to help developing countries rebuild after climate disasters.

The negotiating bloc is hoping to get broader backing from the group of 134 developing countries known as the G77.

Category 5 Tropical Cyclone Harold devastated Northern Vanuatu, resulting in over US$500 million #LossAndDamage. Development aid to Vanuatu for recovery was < US$100 million. Recovering from #climatecrisis should not detract from our development.#WeNeedLDFinance #COP27 pic.twitter.com/SNGIU3gR8u

— AOSIS (@AOSISChair) October 17, 2022

Discussions on how to provide financial support to developing countries hammered by worsening climate impacts remains one of the most contested issues in the talks.

Disastrous flooding in Pakistan, which left the government with a reconstruction bill of more than $30 billion, has sharpened calls for an urgent solution to the deadlock.

Wealthy countries argue that existing financial instruments can be enhanced to meet some of the needs. The EU is working on a package of alternative funding options. This includes Germany’s Global Shield initiative, backed by the G7, to strengthen disaster risk finance and insurance.

But Robertson said the gaps in the existing financial architecture are too great. A dedicated funding structure would help disburse funding from different propositions, including the Global Shield, and avoid a piecemeal approach, he explained.

“This fund is not a panacea. It’s not going to solve everything,” said Robertson. But it can be “catalytic and begin to pilot approaches in areas where other funds are not set up to deal with loss and damage response”.

Funding model

Aosis tested the idea last month at a seminar hosted by the European Capacity Building Initiative in Oxford, UK. It would follow a similar model to the UN’s flagship Green Climate Fund, with regular – voluntary – fundraising rounds. Government donors should deliver support mostly as grants, on top of existing climate finance commitments, the bloc envisions.

Other potential sources of revenue include – as UN chief António Guterres advocates – a windfall tax on oil and gas companies’ profits.

Robertson said the response fund wouldn’t replace humanitarian aid, but focus on the reconstruction phases that follow extreme weather events.

Governments and communities would apply for budgetary support to rebuild their economies and critical infrastructure. This could include activities such as cleaning up ecosystems, rehabilitating cultural sites and restoring education and health services.

Money could also go to communities threatened by slow-onset events such as sea level rise or desertification, for example to help them relocate with dignity.

“What we are discussing is purpose-driven financing. We are trying to make sure that we can get money that is going to get us the results and the effectiveness that we need,” said Robertson.

While recognising the proposal is unlikely to win universal acceptance at Cop27, Robertson hopes it will bring solutions within reach over the next 12 months.

“We’ve been burnt so many times trying to be as pragmatic as possible and as reasonable as possible but I really want to be optimistic,” he said.

Aosis hopes an agreement to operationalise the fund could be reached by Cop28 in 2023.

The post Small island states to propose ‘response fund’ for climate victims at Cop27 appeared first on Climate Home News.

But the wealthy nations who bear most responsibility for causing climate change have yet to deliver all the funds they have promised, let alone enough funds to cover the damage done.

Immediately after the floods, Pakistan’s planning minister Ahsan Iqbal said a conservative estimate of the damage done was $10bn. “It is a preliminary estimate likely to be far greater,” he said.

Despite this, Pakistan and the United Nations (UN) put out an appeal on 30 August for just $160m, a figure roughly 60 times smaller than Iqbal’s estimate for damages.

Oxfam's humanitarian lead Magnus Corfixen told Climate Home this figure was low because the UN's assesment "didn't include some of the worst affected districts as they were not hit by the first floods".

Last week, the UN upped its appeal to $816m. “We need all of these funds, and we need them quickly,” said the UN's humanitarian coordinator for Pakistan Julien Harneis.

UN data analysed by Climate Home shows that rich countries have so far failed to deliver even enough aid to meet the UN's original appeal. This data relies on donor countries to report to it so is not comprehensive but it is used by the UN and updated daily.

A UN spokesperson told Climate Home that governments have pledged more than $160m, but the data shows they have only actually delivered $51m. They have signed contracts for a further $39m.

Of this, only $28m comes directly from governments, with $26m of that from the US government.

A further $16m comes from a group of British charities called the Disasters Emergency Committee (DEC), whose funding comes from the government and from ordinary citizens.

The UN's Central Emergency Response Fund (CERF) donated a further $7m. They are funded by governments, mainly in northern Europe, and distribute funds to humanitarian relief as they see fit.

This lack of funding is having an impact on the ground. Gul Wali Khan leads the Catholic Relief Service's response in Pakistan. "It's a couple of months now," he said, "and assistance is not coming to the speed or to the level which is required."

After a recent visit to an affected area, Khan said: "There are 7.9 million people displaced, mostly standing on the road side. On one side it's a sea and the other side it's the sea and the vehicles cross in the middle, so there's not much privacy, not even a latrine available."

Khan said his NGO is prioritising handing out cash, trucking in clean drinking water, building latrines and providing shelter with funds part-provided by the US government.

Displaced people take refuge on the roadside in the village of Thatta (Photo: Islamic Relief)

If he had more money, he said he would expand this help to more areas of Pakistan and would try to enable more children to return to school, by fixing the sanitation in flood-damaged schools and by building temporary schools. UN data says no money has been donated for education.

Khan is not the only one making tough choices. A UN report found that "enormous needs" and "extremely limited resources" meant NGOs were having to hand out just one tarpaulin for households to shelter from the sun and rain under rather than two.

The World Food Programme's James Belgrave told Climate Home that the WFP, government and NGOs had assessed hunger across the whole of Pakistan, based on measures like how many people are skipping meals.

They prioritise the areas where hunger is most severe and, he said, "based on how much funding is forthcoming, we'd be able to scale up and provide more food to more people".

Funded by USAID, Concern Worldwide hands out cash in Pakistan (Photo: Concern Worldwide)

Sherzada Khan is Concern's Pakistan country director. He said his NGO has also had to do some "very unfortunate prioritisation" because the money is "insufficient".

He said the response has focused on giving out cash and, while this kind of "flexible assistance is very welcomed", people need more long-term help.

The floods wrecked many crops which were about to be harvested. If the next harvest is to be a success, farmers need seeds and fertilisers to plant crops in the next few weeks, he said.

With Pakistan being the world's fourth-biggest rice exporter, failure will bump up already high prices globally.

Children fill up water from a truck. (Photo: Action against hunger)

Needs on the ground have grown and changed over the last two months, Khan said.

Water-borne diseases have spread among displaced people and now, with winter coming, respiratory illnesses are likely to rise.

"Winterisation kits", like warm clothes for children, are also now needed as the country cools.

"We understand that [donor governments] will have their own mechanisms and bureaucratic procedures and administrative hurdles...but if you translate the impact of [relief] not hitting the ground timely and efficiently, it’s going to cost a lot more,” said Khan.

None of the humanitarian groups Climate Home spoke to said the slow pace of the donor response was unusual. "Funding for these things can often come fairly slow, it takes a while to trickle in", said Belgrave.

One solution, according to the International Institute for Environment and Development's Clare Shakya, is to scale up the CERF. While the damage caused by disasters has soared, its funding has flat-lined.

Donations to the CERF (Photo: CERF/Screenshot)

"Countries suffering loss and damage as a result of climate impacts that they can’t adapt to, should receive finance ideally in advance of a forecast emergency or at least within days of it happening," she said.

Shakya added that countries should be able to access sovereign insurance for disasters which are likely to happen once in every ten years or so and that Pakistan's lenders should suspend its debt repayments.

Pakistan has pled for debt relief with prime minister Shehbaz Sharif warning "all hell will break loose" without it. But his government dropped this call after credit rating agency Moody's cut its rating, meaning it will have to pay more to borrow.

Climate Action Network's Harjeet Singh said: "The response to Pakistan floods is a clear example of how impacted communities are now at the mercy of individual pledges that may or may not be delivered".

He called for a loss and damage financing facility to be set up, a key demand of many developing nations in climate talks which is set to dominate Cop27 next month.

EU outlines funding options to help climate victims recover

This would assess the needs after a climate-caused catastrophe and request specific amounts of money from governments based on factors like their contribution to climate change.

A spokesperson for Canada's development minister Harjit Sajjan said that the government was "ensuring that those funds are delivered in a timely manner to enable partners to respond to urgent needs" and "we remain in close contact with our humanitarian partners and continue to look at ways to provide support to the people of Pakistan.”

A spokesperson for the UK's foreign, commonwealth and development office said: “We have committed over £16m ($17.7m) of funding to deliver life-saving aid to those most affected by these devastating floods.” Asked if this includes DEC funding, the spokesperson had not responded at the time of publication.

This article was updated on 14 October to include a table showing pledges made against pledges delivered.

The post Funds for Pakistan flood relief come too little, too late appeared first on Climate Home News.

Many developing countries have become trapped in a spiral of rising debts levels, high borrowing prices, the inability to print money and soaring costs of recovering from unavoidable climate impacts.

But this week may have offered a ray of hope.

Denmark has become the first UN member state to pledge loss and damage finance: cash for developing countries to recover from climate losses and damages which couldn’t be adapted to. This is a critical milestone.

While the amount pledged is small, the symbol is mighty.

In practice, it will demonstrate what loss and damage support can look like on the ground.

Part of the money is earmarked for innovative partnerships with civil society groups working to address loss and damage in affected countries.

Another chunk is for an existing insurance initiative, which sponsors insurance in poorer countries. These mechanisms have been criticised by some campaigners who argue that poor nations are still left with a bill and that insurance isn’t a solution to slow-onset events such as sea-level rise.

Who pays for damages caused by climate disasters remains a difficult conversation. “I’m not going to take the ‘feeling guilty’,” US special envoy John Kerry snapped at an event this week.

Addressing the UN general assembly in New York, UN chief António Guterres sought to offer a solution. He told advanced economies to tax oil and gas companies’ windfall profits and channel some of the revenues to vulnerable nations recovering from climate impacts.

But the most ambitious idea came from Barbados’ prime minister Mia Mottley: an overhaul of the financial system that, she says, can deliver trillions of dollars for investing in climate action and resilience.

It will require reforming the IMF and the World Bank and a massive expansion of cheap lending to developing countries. Mottley tested out the plan with a select group of leaders during a retreat in Bridgetown this summer. This week, she took it to the rest of the world.

Her plan will require the leadership of the top financial institutions. That of World Bank president David Malpass has come under serious questions.

Malpass repeatedly refused to say whether he accepts that burning fossil fuels is warming the planet during an interview with New York Times’ reporter David Gelles. The exchange sparked global outcry and widespread calls for the US, the bank’s largest shareholder, to push Malpass out.

The Trump-appointed banker later rowed back on his comments in an interview with CNN. Yet the row is unlikely to be forgotten quickly.

This week’s stories… 

• Vanuatu backs fossil fuel non-proliferation treaty at UN general assembly
• Mia Mottley builds global coalition to make financial system fit for climate action
• US under pressure to force out World Bank chief over climate doubt
• UN chief: Windfall tax on oil and gas can pay for loss and damage
• Denmark becomes first country to pledge ‘loss and damage’ finance
• Bedbugs, sh*t shows and algae hype: 5 reveals from Big Oil emails
• UN climate chief Simon Stiell: 2030 is only two Olympic finals away

and comment…

• When the EU and US score climate points off China, Africa suffers – Faten Aggad, African Climate Foundation

The post Compact for the climate frontlines – Climate Weekly appeared first on Climate Home News.

The Nordic nation committed 100 million DKK ($13m) to build resilience and help climate victims recover during a ministerial meeting on the sideline of the UN General Assembly in New York on Tuesday.

While the amount pledged is relatively small compared to mitigation and adaptation finance, the move breaks a taboo among rich countries over giving money to address the unavoidable losses and damages already caused by climate change.

Announcing the funds, Denmark’s development minister Flemming Møller Mortensen said: “I saw for myself in Bangladesh this spring that the consequences of climate change need increased focus.”

“It is grossly unfair that the world’s poorest should suffer the most from the consequences of climate change, to which they have contributed the least. With this new agreement, we are putting action behind words,” he continued.

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Mattias Söderberg, chief advisor at Danish Church Aid, told Climate Home the initiative is “good climate news”.

“I hope it will have effect both for the people on the ground who already are facing climate induced loss and damage, and for negotiations between rich and poor countries, where the debate about loss and damage for far to long has been full of conflict,” he added.

The commitment by Denmark to mobilise funds for loss and damage is “a step in the right direction”, he added. The move “hopefully can inspire other countries to follow,” Söderberg said.

During last year’s Cop26, the G77, a block of more than 130 developing countries, made a push to create a finance facilty to support victims of climate-related disasters. The initiative was blocked by the EU and the US.

Under the Paris Agreement, all countries agreed to address the “loss and damage associated with climate change impacts”. But rich countries have fiercely resisted providing specific finance for this, as they do not want to accept liability and risk being sued by climate vulnerable nations.

UN climate chief Simon Stiell: 2030 is only two Olympic finals away

Previously, only Scotland and the Belgian region of Wallonia have pledged funding for loss and damage. Neither is a member state of the United Nations.

Of the 100m DKK ($13m), 35m DKK ($5m) will go to a Frankfurt-based organisation called InsuResilience, which subsidises insurance in poorer countries. In 2021, InsuResilience aimed to spend €7m, conducting projects on a small scale.

In a statement, the Danish foreign ministry said another 32.5m DKK ($4m) will go towards the Danish foreign ministry’s “strategic partnerships with civil society, which work with climate-related loss and damage with a special focus on the Sahel region”, which spans North Africa’s Sahara desert.

Five burning climate issues for the 2022 UN general assembly

A further 25m DKK ($3m) is set aside for “strategic efforts within climate-related loss and damage which can support the current climate change negotiations up to and during Cop27”. Further details will be published in the coming months.

Finally, 7.5m DKK ($1m) will go civil society actors in developing countries who are working on resilience to climate change, the Danish government said.

Harjeet Singh, a long-time campaigner on loss and damage from Climate Action Network International, told Climate Home that pledges to the German government backed InsuResilience fund were “merely a smokescreen to distract from the direct support that impacted communities need”.

He said that insurance is not a solution to slow-onset events like sea-level rise, glacier melt or desertification. Singh added that the world’s poorest often can’t access insurance, even if it’s subsidised, because of a lack of money or financial literacy.

Egyptian government denies Cop27 hotel price gouging

“(Insurance) allows financial corporations from the developed countries to further profit from peoples’ misery,” said the campaigner.

Singh called for rich countries to stop blocking the proposal from developing nations for a new finance facility to address loss and damage at Cop27.

Some campaigners consider such a facility to be more reliable, as it would ask for money from rich countries based on a formula which works out what they owe. As such, it would be less dependent on the whims of wealthy countries.

Opponents of such a facility say that it would take a long time to set up and would still not be able to force rich countries to give money to it.

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If “massive” is the word for the heatwave losses we experienced here in Pakistan, I struggle to find an appropriate one for the losses incurred from the ongoing monsoon floods. “Colossal”, “mammoth” and “gigantic” don’t do justice to what we are witnessing.

Before now, 2010 marked the year with the worst flooding in Pakistan’s history, directly affecting an estimated 14-20 million people, and killed over 1700. Nearly 1.1 million homes were damaged or destroyed, causing $9.7 billion in damages in 46 of the country’s 135 districts.

This year’s monsoon season is not over yet and the scale of destruction from the flooding is already expected to be far higher than 2010. One third of the country is suffering from floods: 30 million people.

The critical difference between the two is that the 2010 flood was mainly a riverine flood originating from the north of the country, providing a considerable lag time for regions downstream to take evacuation measures.

This time the deluge is caused by torrential rains which began in mid-June, seeing flooding outside areas that are usually prepared for such events. This is compounded by the no-less devastating riverine flooding, which has already caused the collapse of two dams in the north of the country.

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As of 29 August, Pakistan’s national disaster risk management authority estimates over 1,100 casualties. Over one million homes have so far been damaged or destroyed, 800,000 livestock have been killed, 3500 km of roads have been damaged and 162 bridges have collapsed. The economic damages are likely to go well above the $9.7 billion in damages from the 2010 floods.

Pakistan is at its nadir of political stability. Thirteen political parties joined forces to oust the Pakistan Tehreek-i-Insaf (PTI) government earlier this year, after which PTI resigned from the national assembly. PTI, however, remains in power at the provincial level and is ruling over 75% of the country’s population. In a recently-called all parties conference, PTI was not even invited, a reflection of the political bitterness, even during the time of worst flooding of country’s history.

One doesn’t need to think hard to understand how this would affect the relief activities carried out in the provinces where PTI is in power. This aspect is important to highlight because in May, the Pakistan Meteorological Department forecast a more than average rainfall in the country, warning of flash floods. But because of the political scenario, this information fell on deaf ears, including the country’s media.

To make the situation worse, Pakistan’s economy is also crippled. Pakistan was kneeling before the IMF to revive a bail-out package, including a disbursement of about $1.1 billion, to save the country from going bankrupt, funds which were released by IMF in the days after the flooding started.

With estimates of $10 billion in economic losses from the 2010 floods, a larger scale of devastation would lead to even higher level of losses.

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The record-breaking heatwave in March-April this year which gripped large parts of the country, and now the worst flooding in history, are back-to-back calamities which present a classic case of what we call “loss and damage” in climate circles. Loss and damage is the loss of lives, land and infrastructure from climate impacts that cannot be recovered, nor adapted to.

A recent climate attribution study has concluded that climate change has made a 2022 heatwave across India and Pakistan 30 times more likely compared to a world without climate change. It is too early to state unequivocally (as additional studies will be conducted once the monsoon is over) but climate scientists believe that climate change will most likely have had a role in increasing the intensity of the present flooding. It certainly fits with the models and predictions of climate change driving more intense monsoons.

Flood affected people stand in a long line with utensils to get food distributed by Pakistani Army troops in a flood-hit area in Rajanpur, district of Punjab, Pakistan, Saturday 27 August 2022 (AP Photo/Asim Tanveer)

For a long time now, developing countries have been asking for a separate finance facility for loss and damage in the international climate negotiations under the UNFCCC.

So far, there has been resistance from the developed world to talk about the costs of loss and damage. At Cop26 in Glasgow last year a finance facility could not be agreed, despite a push from developing countries, and only a formal dialogue on loss and damage made it into the final outcome of the negotiations.

Loss and damage is likely to be a hot topic during Cop27 negotiations in Egypt this year. In the wake of this year’s record-breaking climate catastrophes it has already witnessed, it would make sense that Pakistan, as the chair of the largest group of developing countries – the G77 plus China – could make a strong case to push developed countries to agree on the establishment of a loss and damage finance facility.

This flooding must also be a wakeup call for the global community to speed up its efforts towards climate action. Pakistan emits less than 1% of global greenhouse emissions, but it is bearing a massive burden from climate change. And the large majority of the people affected are the poorest of the poor.

The devastation faced by Pakistan now is a mere precursor of what we may see at higher levels of warming. Even at the Paris Agreement’s 1.5C warming limit, some of the impact of climate extremes will go beyond the tolerable limits of human and natural systems.

As the world continues on its go-slow in getting out of fossil fuels and decarbonising the global economy, the losses and damage will continue to mount, and countries like Pakistan – and those others suffering damage they cannot pay for – need financial support.

Dr Fahad Saeed is a climate impacts scientist at Climate Analytics, based in Islamabad. This article was originally published on Climate Analytics’ blog.

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It aims to fix flaws in the humanitarian system, which can deliver aid after disasters like drought or storms but slowly and patchily. Instead, the German government want to improve insurance and social security schemes so that support comes fast and systematically.

Critics say the initiative is rich countries’ latest attempt to avoid paying for climate damage by keeping the burden on individuals in poorer countries through insurance premiums.

German chancellor Olaf Scholz told ministers assembled for the Petersberg Climate Dialogue in Berlin on Monday “we want to establish a global shield against climate risk”.

“We must acknowledge that there is climate-related loss and damage and that the most vulnerable countries, in particular, need our solidarity in dealing with it,” said German development state secretary Jochen Flasbarth. “This is where we want to build bridges for the upcoming global climate conference in Egypt by putting forward concrete solutions.”

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In a statement, the German development ministry BMZ said: ” If there is no protection scheme in place, a drought can mean that a smallholder farmer loses not only her harvest but also her entire livelihood because she cannot afford to buy new seeds.”

On the other hand, “when a preparedness and protection scheme is in place which kicks in automatically in the case of a crisis, money for new seeds is immediately available and damage is limited. That is much cheaper in the long run than having farmers slip into poverty,” BMZ said.

Germany is working on the global shield with the V20 group of countries which are highly vulnerable to climate change. The German-hosted G7 agreed in principle to support this concept and details are expected to be announced at Cop27 in Egypt in November.

According to a source with knowledge of discussions, the German government wants to work initially with 5-10 vulnerable “pathfinder” countries to identify climate risks and needs and link those to existing funding instruments like the Insuresilience Solutions Fund (ISF) and the Global Risk Financing Facility (GRFF). The ISF is funded by Germany’s state development bank KfW and the GRFF is co-funded by Germany, the UK and the World Bank.

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The money will go towards areas like insurance, risk pooling and strengthening social security systems. Risk pooling is when several government entities pay money into a pot which they can draw from when disaster strikes.

No additional finance has been dedicated to these facilities as part of the global shield. In 2021, the ISF spent €6.9m  ($7.0m) co-funding insurance premiums and the GRFF spent $203m.

Campaigners told Climate Home that insurance is inaccessible to many of the world’s poorest and only covers certain types of climate disasters.

They expressed fears the global shield was a distraction from setting up the dedicated loss and damage finance facility which low and middle-income countries are demanding and rich ones are blocking.

Roseline Isata Mansaray, the founder of Fridays for Future Sierra Leone, told Climate Home that insurance in Sierra Leone, one of the countries ISF works in, was accessible only to people who are “rich and middle class”.

“If, for you to have your daily bread is very difficult for you, how are you ever going to feel like insurance is something you can pay?” she asked.

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Even with the money, Climate Action Network’s Harjeet Singh added that some older and marginalised people can struggle to fill in the forms, set up the bank accounts and deal with the officials necessary to arrange insurance and then claim a pay-out.

While the global shield intends to subsidise some payments, Singh questioned whether rich countries would continue to provide these subsidies indefinitely as the climate worsens, disasters become more frequent and insurance premiums rise. If not, he said, the cost would quickly pass on to individuals and governments in poorer countries.

And insurance companies often pay out far less than the real costs from climate disasters. When Hurricane Maria hit Dominica in 2017, the financial costs were estimated at $1.4bn but the Caribbean Catastrophe Risk Insurance facility paid out just $0.02bn.

“The German government loves insurance because [Germany has insurance companies like] Munich Re,” Singh said. “They see a lot of opportunities of selling insurance to the developing world where the penetration is very low.”

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Stockholm Environment Institute researcher Zoha Shawoo said that insurance only works for sudden disasters like storms, droughts and wildfires and not slower ones like desertification and sea level rise. It also doesn’t cover non-economic losses like the losses of cultures, which is hard to put a price on.

Germanwatch researcher David Ryfisch told Climate Home the global shield was “just an initiative” at this stage. He said: “The ideas behind it are good but as long as it isn’t backed by finance, it risks disappointing the developing countries which are anyway already cautious as to how much the shield can do and whether it is meant to be a distraction from their loss and damage finance ask”.

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Heavy rain began in northern Bangladesh and north-east India on Saturday, killing at least 32 people and forcing millions to flee from their homes.

The intensity of the rain took aid agencies and residents by surprise. “The flood caught us off guard because the extent was enormous,” WaterAid’s Bangladesh director Hossain Adib told Climate Home News.

“This is monsoon season but what climate change has resulted in is more than normal rainfall,” added Sudipto Mukerjee, Bangladesh representative at the UN Development Programme (UNDP).

A family in Sylhet sit in their flooded home (Photo: WaterAid/Drik/Sultan Mahmud Mukut)

Both Adib and Mukerjee told Climate Home that the Covid pandemic and the war in Ukraine had diverted funds away from their budgets.

UNDP’s disaster response and recovery facility, whose biggest funders are the UN, Sweden and Canada, had a budget of $11m in 2020. This fell to $7.5m in 2021 and $6.8m in 2022.

The dwindling funds are stretched increasingly thin. They have been used to provide protective equipment for Covid-19 and respond to the Rohingya refugee crisis as well as weather-related disasters.

The budget of the UNDP’s disaster response and recovery facility (Photo: UNDP/Screenshot)

With limited cash, mobile communications disrupted and the airport’s runway flooded, the Bangladeshi government and aid agencies are struggling to respond quickly to the emergency. Local community groups, including young climate activists affiliated to Fridays for Future, have stepped into the gap.

Siyam Afzal said he and other activists from YouthNet for Climate Justice launched an online appeal and used the money to buy food, medicine and drinking water to give people in overcrowded shelters. The intensity of the floods has left even designated ‘flood shelters’ flooded, meaning only a few are safe for people to us.

Hospitals too have flooded, making it harder for injured people to find medical care. Afzal met one child whose injured leg was splinted with a piece of bamboo and some plastic yarn.  “He was crying badly,” Afzal said.

An injured boy has a leg splint made from bamboo and plastic yarn. (Photo: Syed Afzal Siyam)

At the UN climate talks last week in Bonn, Germany, developing countries argued that the humanitarian aid system was inadequate to respond to climate disasters.

They pushed for a facility to be set up that would source funds from rich countries to help poorer ones respond and recover to climate disasters which they had a disproportionately small role in causing.

Developing countries pushed to get the issue on the formal agenda for the talks but were defeated by rich nation opposition.

In the wake of the floods, climate campaigners and humanitarian workers in Bangladesh called for developed countries to deliver loss and damage finance. Mukerjee, of UNDP, explained that Bangladesh has a good track record of rolling out measures that have minimised deaths from floods. But communities still suffer from losses and damages to infrastructure, including houses, schools, hospitals and roads.

“If there is a direct link between a disaster and climate change…there is a need for the global community to be able to help countries like Bangladesh deal with the consequences of climate change,” he said.

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European and other rich nation negotiators believe they have shifted dramatically in recognising the need for funding in addition to that for carbon-cutting and adaptation efforts.

One developed country negotiator told Climate Home: “One year ago, I wouldn’t have been allowed to say ‘loss and damage’…a lot of progress has happened in the last year or so”.

But despite showing more willing to address the issue, the gap between rich nations and developing countries’ position remains glaring. During the Bonn climate talks, which closed Thursday, the EU led resistance to developing countries’ demand for a bespoke loss and damage facility and for that to be on the formal agenda at Cop27 in Egypt.

“The fact is that the EU is still unable to grasp the scale of harm that climate impacts cause in the Global South nor of its direct responsibility on loss and damage,” said Adrián Martínez Blanco, of the Costa Rican campaign group Ruta Del Clima. 

Rich nations have avoided setting out an alternative solution to the loss and damage facility demanded by developing countries. Climate Home approached five wealthy country delegations in Bonn, none of whom wanted to discuss the issue on the record.

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At Cop26, in Glasgow, UK, last year, developing countries were pressured by wealthy nations into settling for a three-year ‘dialogue’ on funding arrangement for loss and damage, with no decision-making powers.

Developing countries’s attempt to push the issue on the formal agenda for the Cop27 talks this November have so far been unsuccessful and consultations on the issue will continue. In response, they appealed directly to the UN climate head Patricia Espinosa to intervene on their behalf.

Under current plans, the discussions will remain a ‘dialogue’ which is due to end in June 2024. The next session isn’t planned until June 2023. Vulnerable nations say they cannot afford to wait two more years to have certainty on funding arrangements. 

Alex Scott, of think tank E3G, said progress at the talks was “divorced from the climate impacts that are hitting on the ground outside this venue, outside these negotiations”.

“No more blah blah blah. Loss and damage finance now.”

“Put loss and damage on the agenda.”

Final message from campaigners at the #BonnClimateConference pic.twitter.com/8dTINNJYwX

— Chloé Farand (@ChloeFarand) June 16, 2022

However, some rich nations have been more forthcoming about promising hard cash outside of a funding facility.

New Zealand’s climate ambassador Kay Harrison told the meeting last week: “There should be no question – climate finance must be available to avoid, minimise and address loss and damage… we think the solutions may lie in bilateral, regional and multilateral solutions”. She added this needed to be done “urgently” and without “delay and procrastination”.

On Friday, a foreign ministry spokesperson told Climate Home that “New Zealand is developing a strategy for delivering climate finance to support our partners’ climate action, including addressing loss and damage”. If it happens, New Zealand would become the first UN-recognised country to provide explicit loss and damage finance.

Representatives of Australia’s new government, keen to build links with their climate-vulnerable Pacific neighbours, supported New Zealand’s position.

Denmark’s chief adviser on climate diplomacy Frode Neergard said: “Current financing mechanisms do not recognise the urgency of loss and damage and the need to act now. It’s a drop in the ocean. Existing finance mechanisms are overwhelmed.”

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A recent Oxfam report found that for every $2 needed for UN extreme weather-related appeals, donor countries are only providing $1. The World Food Programme recently scaled down its work in South Sudan because of lack of funds, leaving up to 1.7 million people at risk of starvation. 

Alpha Kaloga, lead negotiator for the African Group on loss and damage, told Climate Home that besides from being insufficient, humanitarian aid and disaster relief doesn’t provide equal support to all countries, with some getting more help for geopolitical reasons. Friends and families of victims, often poor themselves, have to pick up the slack when aid money doesn’t cover needs, he added. 

To address this funding gap, Germany, supported by the US, has proposed a ‘global shield’ which aims to provide targeted support to a select number of particularly vulnerable countries. It will push this idea when it hosts the G7 leaders’ summit later this month and the Petersberg  Climate Dialogue in July.

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But, throughout the talks, the US and the EU insisted that existing aid schemes could be increased and improved to address countries’ loss and damages needs. 

“We think the next set of our process should focus on how existing resources can be strengthened,” the EU’s lead negotiator Jacob Werksman told the meeting. 

Climate Home understands that, after years of avoiding the issue, the EU feels politically exposed by its recent recognition that loss and damage needs to be addressed with funding but its failure to provide an alternative to developing countries’ proposed facility. 

Under the governance of UN Climate Change, they bloc argues the fund would be bureaucratic, slow to set up and won’t resolve the quality of finance, such as the share of loans versus grants. In private, some EU negotiators further recognise that there are no compensation mechanisms for slow-onset events, such as sea level rise, or the loss of culture, language and traditions because of climate impacts. 

But not every capital is ready to face the consequences of ramping up existing aid. In fact, the UK has cut its development aid in the wake of the pandemic. “Every country has this fight between the climate ministry and the ministry of finance,” said the developed country official.

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