Winds of up to 240 kilometres per hour flattened entire neighbourhoods and toppled power and communication lines, causing damage equivalent to a third of the country’s annual economic output, according to early government estimates.

Many Grenadians cast their minds back 20 years when a similarly powerful storm – Hurricane Ivan – brought the island state to its knees, triggering a vicious circle of financial distress that eventually led to a debt default.

But, unlike in 2004, officials this time could deploy a tool that has been widely discussed in climate circles to provide financial help in the wake of fierce storms: hurricane clauses built into its agreements with international creditors.

Grenada last week became the first country in the world to use such a provision in a government bond which will allow it to postpone debt repayments to private investors, including US investment firms Franklin Templeton and T. Rowe Price.

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The move will save the Caribbean island nation a total of around $30 million in payments due this November and in May next year. While the money owed will be added to future bills, in the meantime the cash injection will help fund immediate recovery efforts and keep essential services like healthcare and education running, a senior official in Grenada’s Ministry of Finance told Climate Home.

The government is now “in talks” about triggering similar clauses with other creditors.

Fighting the debt trap

Grenada’s use of debt suspension clauses will be seen as a litmus test for their effectiveness in shoring up disaster-hit economies, as major international financial institutions like the World Bank promise to offer them more widely to climate-vulnerable countries.

Mike Sylvester, permanent secretary at Grenada’s Ministry of Finance, told Climate Home the debt repayment pause can have a “significant” impact in the short term, giving “some breathing space to the government to be able to properly and adequately respond to the crisis”.

Without this option and other relief measures, the government may have struggled to meet basic needs without making painful cuts to services, he added.

Simon Stiell, the head of the UN Climate Change body (UNFCCC), told Climate Home that “mechanisms such as this will be increasingly important as the scale, frequency and impacts of climate disasters continue to worsen”. Last month Stiell saw first hand the scale the devastation Hurricane Beryl inflicted on his home island of Carriacou – part of Grenada – where 98% of homes and buildings had been destroyed or severely damaged.

Like Grenada, many developing nations are finding it hard to deal with the combined effect of rising debt and worsening climate impacts.

Nearly half of low-income countries currently experiencing or at high risk of debt distress are also highly vulnerable to the effects of climate change, according to a March 2023 report by the UN Trade and Development agency (UNCTAD).

A separate analysis by charity Debt Justice found that debt payments for the most climate-vulnerable countries have reached their highest level in at least 30 years.

Emily Wilkinson, a senior research fellow at think-tank ODI, said that when a natural disaster hits a highly debt-distressed country, the impact on the economy is likely to prompt a default unless there are safeguards in place or the debt can be renegotiated quickly.

Disaster clauses in spotlight

Debt suspension clauses have risen to the top of the agenda since they were featured among the key recommendations put forward by Barbados Prime Minister Mia Mottley in her Bridgetown Agenda, a vision for reforming the global financial architecture and making it fit for a world grappling with rising climate pressures.

The World Bank expanded the scope of its climate-resilient debt clauses last year. Pauses on repayments of all new and existing loans, and related interest payments, are now being offered to 45 states it classes as “small” including island nations.

Other international development lenders, like the African Development Bank, the Inter American Development Bank and the UK Export Finance, have introduced similar options.

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For Marina Zucker-Marques, an economist and senior researcher with the Boston University Global Development Policy Center, temporary debt suspensions are an important tool that gives disaster-hit countries “some breathing space, allowing them to prioritise social spending, which is critical in the immediate aftermath of a natural disaster”.

But while these clauses have become more popular, they are still “a tiny fraction of debt contracts,” she added.

The lesson of 2004

Grenada is among a handful of countries that have pioneered the inclusion of hurricane clauses in their loan agreements dating back nearly a decade.

After the devastating experience of Hurricane Ivan in 2004 and a subsequent default, the island nation insisted on including such provisions in 2015 when it restructured debt with its main creditors, international private bondholders and the Exim Bank of the Republic of China (Taiwan).

One of the main challenges during the extended negotiations was to settle on specific parameters that would allow Grenada to trigger the clause in the event of a severe storm. These could be the wind-speed or the size of the economic losses caused by the disaster.

In the end, Grenada and its creditors agreed that a payout from the Caribbean Catastrophe Risk Insurance Facility (CCRIF), a regional disaster insurance fund Grenada is part of, for losses over $15 million would be the trigger.

After the passage of Hurricane Beryl, CCRIF has made a record $44 million insurance payout to Grenada as a result of the extensive damages to the islands. This enabled the government to activate its debt suspension clauses.

The aftermath of the devastating passage of Hurricane Beryl on the island of Petite Martinique, Grenada in July 2024. REUTERS/Arthur Daniel

Sylvester from Grenada’s Ministry of Finance said the country is now much better prepared to deal with the financial aftershocks of a hurricane, having learned the lesson of the events in 2004 – but more needs to be done.

“The money that we’ve received so far is still a drop in the bucket, given our significant needs,” he added. “We need to continue to build our resilience with the right financial tools, because we don’t want to pile up our debt just to reconstruct damaged infrastructure.”

Grants and debt relief

To that end, the government has set up a disaster relief fund, while looking to repurpose some of its loans and obtain new financial help from multilateral banks.

Boston University’s Zucker-Marques said support from rich countries, which are major contributors to climate change through their historically high greenhouse gas emissions, is fundamental to prevent financial crisis in developing countries on the frontline of extreme weather.

“Climate vulnerable countries need access to more grants and affordable long-term finance to invest in resilient infrastructure and economies,” she said. “Otherwise, the vicious cycle of natural disasters and financial instability will only worsen in the years to come.”

ODI’s Wilkinson said pausing countries’ debt is helpful, but she called for further action from creditors. “In the case of a qualifying disaster, they should offer some form of debt relief on repayments rather than just delaying them – which only kicks the can down the road,” she added.

The article was updated on 23/8 to add a comment from UNFCCC chief Simon Stiell received after publication.

(Reporting by Matteo Civillini; editing by Megan Rowling)

The post In a world first, Grenada activates debt pause after Hurricane Beryl destruction appeared first on Climate Home News.

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. 

The post Hurricane Beryl shows why the new UK government must ramp up climate finance  appeared first on Climate Home News.

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.

The post The Loss and Damage Fund must not leave fragile states behind  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.

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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. 

The post Seismic shifts are underway to find finance for loss and damage appeared first on Climate Home News.

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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The World Bank – the fund’s expected host – said on its website last week that its own board anticipates approving a formal plan to become the fund’s “financial intermediary” by mid-April, with a final operating deal due to be in place with the fund by the end of July.

But would-be recipients of the loss and damage fund’s resources are already jostling for position in a growing queue of nations hoping for help – and its board faces an unenviable task: figuring out how to fairly divide very little money among too many people in desperate need of it, as climate impacts accelerate in a warming world.

Timetable of steps the World Bank plans to undertake to become host of the new UN loss and damage fund (Source: World Bank)

Pakistan, for instance, is still seeking about $16 billion to rebuild roads, bridges, schools and more, after 2022 floods inundated a third of the country. In southern Africa, Zambia – hit by a severe drought that has ruined half of this season’s staple maize crop – wants support to shore up its dwindling water supplies.

Vulnerable countries – from Pacific and Caribbean island nations to Bangladesh – are looking for money to cover growing losses as warmer seas drive stronger hurricanes and cyclones. And in Senegal, where higher oceans are accelerating coastal erosion, families watching their ancestors’ skeletons float out to sea from flooded graveyards are asking for cash to rebuild crumbling coastal communities.

“The need is for trillions (of dollars) – and what we have is millions, not even billions,” said Ritu Bharadwaj, a climate finance and governance researcher at the UK-based International Institute for Environment and Development who has closely followed the new fund’s evolution. So far, it has garnered about $700 million in pledges.

With the residual costs from loss and damage projected to reach a total of $290 billion to $580 billion by 2030, according to a 2018 study, the loss and damage fund aims to ramp up its resources significantly, largely by persuading donor governments it can use their money effectively.

In partnership with a new taskforce on international taxation, it is also exploring how to harness innovative but politically tricky funding sources such as levies on fossil fuels, aviation, shipping and financial transactions.

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To make limited resources stretch further, fund observers like Bharadwaj have urged the board to consider ways to reach vulnerable people directly, such as cash transfers when a pre-set trigger point is passed – for example, a top-strength hurricane hitting an at-risk zone.

That approach would cut out middleman delivery agencies that critics say now claim too much of climate finance flows and reduce the amounts getting to the frontlines.

Bharadwaj and some others also believe the fund should consider supporting so-far inadequate efforts to build resilience to worsening climate shocks, rather than just responding once they happen – in order to curb future demands for assistance.

That could include helping Zambia’s farmers build community irrigation systems to avoid them coming back to the fund repeatedly to cover crop losses from warming-fuelled drought.

“We need to be more responsive to the comprehensive risks the communities are facing,” said Bharadwaj.

Between relief and resilience

However, Avinash Persaud, a loss and damage fund board member from Barbados representing Latin American and Caribbean nations, said the fund should focus on its core mission – helping the worst-hit communities and countries recover and rebuild after climate impacts – rather than responding to well-intentioned pleas to expand its work.

“This fund is not replacing relief agencies. This is not a resilience-building fund,” he told Climate Home. “This is doing the stuff in the middle – what happens the day after the relief agencies pack up and leave your people fed and watered but under blue tarpaulins.”

The fund could support the reconstruction of devastated towns in a safer location, repairs to roads, bridges and schools – or anything else that “reboots the community”, said Persaud, an economist noted for helping design the Bridgetown Initiative, which aims to reshape international finance flows to help debt-strapped countries boost climate protection.

Damage in a Miskito indigenous community called Wawa Bar, after being the epicenter of Hurricane Eta, on the Caribbean side of Nicaragua. The North Caribbean, one of the poorest regions of Nicaragua, was plunged into uncertainty and despair after the double blow of hurricanes Eta and Iota, which sowed death and destruction in Central America, Puerto Cabezas, Nicaragua, November 23, 2020 (Photo: Katlyn Holland/CRS / Latin America News Agency via Reuters)

With the loss and damage fund’s 26-strong board now in place – albeit several weeks late and yet to name one developing-world member with only an alternate from India listed for that seat – it is expected to start work in April to establish its operating rules. 

The board is set to grapple with a range of contentious discussions, including whether a share of support should be given as concessional loans rather than simple grants.

Also up in the air is whether money should move straight to governments and local organisations or also through international partners – including development banks and UN agencies – and how much direct access to the fund vulnerable communities should have.

African dismay at decision to host loss and damage advice hub in Geneva

With the UN-backed Green Climate Fund, for example, about three-quarters of funding has been channeled to countries via international organisations and only a quarter has been delivered directly to developing countries and regions for projects.

Harjeet Singh, who has tracked efforts to establish the fund for more than a decade and is now global engagement director at the Fossil Fuel Non-Proliferation Treaty Initiative, said he was hopeful “this fund is going to be different from the ones we’ve had so far”.

Fund with ‘a clean slate’

Michai Robertson, a senior advisor for the Alliance of Small Island States and a research fellow at the UK-based global affairs think-tank ODI, said language in the agreement setting up the fund should help ensure it operates in new ways.

In making allocations, for instance, the board – which aims to disburse money far faster than existing climate funds – will have to balance the needs of countries that have sustained large climate losses with setting aside a basic floor of support for poorer or highly vulnerable nations where the overall bill is smaller but some communities are hit very hard.

Currently, small island developing states get just 2% of international climate finance and least-developed countries, largely in Africa, about 8-10%, Robertson noted.

“You don’t want one country to take up all the scarce resources,” he said.

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The fund’s agreement also says that vulnerable countries and communities should have a large say in deciding priorities for using its money – and that Indigenous and other community knowledge of local risks should be considered as a valuable source of information, especially when climate risk modelling is lacking in some countries.

The fund will also address some “non-economic” losses and damage – such as the disappearance of nature a community relies on, or cultural institutions – in the form of finance to help rebuild a ruined museum or replant lost mangroves, Singh said.

Bharadwaj said she hoped the fund can act in a way that is catalytic, helping countries fill the gaps in other funding streams – from climate adaptation and resilience, to development and humanitarian aid.

“When an existing institution or organisation does things in a certain way, it takes a lot of effort to change that. But the loss and damage fund is not carrying any baggage behind it. Here we have a chance for a clean slate,” she said.

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In January, the two United Nations agencies that will manage the Santiago Network on loss and damage recommended that its headquarters should be in Nairobi as it is a relatively cheap location and home to other UN environmental bodies.

But during the first meeting of the network’s advisory board this week, at the four-star Warwick Hotel in Geneva, government climate negotiators rejected that proposal and instead chose the Swiss lakeside city as its headquarters.

The Advisory Board of the #SantiagoNetwork convenes for its inaugural meeting on 18-20 March in Geneva. Established in 2019, the Santiago Network aims to address loss & damage from climate change in vulnerable countries. Learn more: https://t.co/w9UwskGMW1#LossAndDamage pic.twitter.com/m3DTUCiT6g

— Adaptation Exchange by the NWP (@AdaptXChange) March 20, 2024

Last year, the Economist Intelligence Unit ranked Geneva as the third most expensive city in the world, twice as expensive as the 141st city on the list: Nairobi.

“Missed opportunity” for Global South

Swiss climate ambassador Felix Wertli called the decision an “honour”. “Geneva will offer great added value to the network” because of the wide range of relevant organisations in the city, while the network will in turn help strengthen that international ecosystem, he added.

But, according to a source who attended the meeting, African climate negotiators only accepted the decision grudgingly, asking for their reservations to be officially noted.

The source said Geneva had been pushed mainly by Latin American negotiators, who were angry that Panama had been ruled out for time-zone reasons and argued Nairobi was difficult to get to and did not have enough embassies.

At December’s Cop28 climate summit, the Swiss government said that, if the network was based in Geneva, it would donate 1 million Swiss francs ($1.1m), cover office costs and provide up to 10,000 francs ($11,000) per person for office materials and infrastructure. The network will spend about $8m a year. The source said the Swiss government had emailed board members last month, making the case for Geneva.

Mohammed Adow, the Nairobi-based founder of the Power Shift Africa think-tank, called the decision “yet another stitch-up by the Global North to keep power away from the places where the impacts of climate change are being felt”.

It “fails to put affected communities at the centre of decision-making” and further erodes the trust between the Global North and South that is needed to tackle climate change, he added.

Tasneem Essop, head of Climate Action Network International, told Climate Home it was “a real missed opportunity”. “It is unfortunate that wealthy countries can use their ability to resource infrastructure as a way to secure the presence of UN bodies in their territories,” she said.

Loss and damage expertise in demand

Governments agreed at Cop25 in 2019 to set up the Santiago Network and tasked it with “averting, minimizing and addressing loss and damage associated with the adverse effects of climate change” by collecting and sharing expert advice. Since then, the host organisation and location of the network’s secretariat has been debated at UN climate talks.

Small islands wanted the Barbados-based Caribbean Development Bank to host it, while African countries wanted the United Nations Office for Project Services (Unops) and the United Nations Office for Disaster Risk Reduction (UNDRR) to host it in Nairobi.

Both groups thought the other would not place sufficient priority – or have enough expertise – on the types of climate damage they are facing. For small islands, the main threats are rising sea levels and destructive storms, whereas Africa is grappling with more frequent and severe floods and droughts.

At Cop28, governments agreed that Copenhagen-based Unops would be the operational host, while Geneva-based UNDRR would organise the expert advice. The two agencies were commissioned to explore the best physical location for the network’s headquarters.

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They shortlisted five options that were safe enough for staff to bring their families, in the European and African time zones, and had a UNDRR presence: Nairobi, Geneva, the German city of Bonn, Brussels in Belgium and the Ethiopian capital Addis Ababa.

They evaluated the five locations based on staff, office and set-up costs, “operational efficiency” criteria like security, infrastructure and the skills of the local workforce and other factors, including being close to other UN agencies. 

The reviewers recommended Nairobi as “the optimal location”, citing strong UN relations with the Kenyan government, “maximum time zone coverage” for co-ordinating with developing countries, and its hosting of other UN agencies.

Nairobi is the base for the UN’s African headquarters, the United Nations Environment Programme (UNEP), and its sustainable towns and cities programme (UN Habitat), as well as Unops and UNDRR’s African regional offices.

But now that the Santiago Network’s advisory board has opted for Geneva, Unops and UNDRR will look for office space in the city. The network will have eight full-time staff members in Geneva and four regional officers based around the world. 

A Swiss government spokesperson said Switzerland had “emphasised its stance of accepting any location choice deemed most beneficial to the affected regions”. It had suggested Geneva to advisory board members “as an alternative venue in case discussions over the future location stalled progress in the creation of the [Santiago Network] Secretariat and its important work”, the spokesperson added.

This article was updated on 21/3/2024 to include the Swiss government’s comment

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With rich countries failing to deliver promised amounts of their taxpayers’ money to help developing countries tackle warming, global attention has turned to so-called “innovative” sources of climate finance – like levies on ships, planes or fossil fuel firms – to make up the shortfall.

But at the International Maritime Organisation (IMO), the United Nations’ shipping arm, governments have made clear they want the bulk of the revenue from a shipping emissions levy to go towards making it cheaper and easier for companies to put clean fuel in their vessels.

Sitting in the 7th-floor boardroom of the IMO’s riverside London headquarters, Arsenio Dominguez, the IMO’s new head, said “we need to focus on shipping as a sector, as that is what we regulate and that’s where we need to focus the efforts”.

IMO secretary general Arsenio Dominguez (March 18/IMO)

Asked if the money could go into a new UN fund to repair and reduce loss and damage from climate change, Dominguez told Climate Home: “That’s another UN agency – we have no remit there.” The fund, set up under UN climate change talks, is set to be hosted by the World Bank.

While conversations are at an early stage, Dominguez’s view is broadly echoed by the shipping industry – as well as by most governments that have so far submitted formal proposals at the IMO, although Pacific nations want some of the funds to be used outside of shipping.

Loss and damage fund board member Avinash Persaud, from Barbados, urged finance and environment ministers to intervene at the IMO to secure a share of any future shipping levy for addressing the harm caused by worsening extreme weather and rising seas.

Big-emitting sector

As it moves goods around the world, the international shipping industry emits a similar amount of greenhouse gases to Germany but has lagged behind when it comes to setting targets to reduce that pollution.

In July last year, governments at the IMO agreed to aim for net zero emissions in the sector “by or around, i.e. close to 2050” – with interim targets for 2030 and 2040.

At the same time, they agreed to look into putting a price on the industry’s emissions. On Monday, Dominguez said he was confident such a levy would be agreed by this time next year, although the details are still to be fought over.

While nations are split on how high the charge should be – with a group of island nations arguing for the highest tax of $150 per tonne of greenhouse gas emissions – submissions from governments, industry and campaign groups all specify that the funds should be used mainly for cleaning up shipping.

Climate protesters dressed as mermaids lie on the floor at an IMO drinks reception last year (Photo credit: Guy Reece)

Kept in house?

A joint submission from the European Union, South Korea, the International Chamber of Shipping, the Environmental Defense Fund and others says a portion of the money should go to cleaning up shipping through investments, research funding and rewards for using clean fuels. 

The money should also address “disproportionate negative impacts” of the transition to clean shipping through training, technical advice and finance for green investments, it adds. An impact assessment is currently being carried out by experts under the guidance of the IMO.

Another joint submission from eight Pacific nations and Belize says the funds should be collected and spent using the principle of “the polluter pays”. That would require the shipping industry as the polluter to stop burning planet-heating fossil fuels “whilst making reparation for the impact on the environment, including people and communities”, the submission specifies.

A shipping negotiator from the climate-threatened Marshall Islands, Albon Ishoda, said the money should be “reinvested in the shipping industry to trigger research, development and deployment into zero-emission maritime technologies and to address climate mitigation efforts”, as well as in “an equitable transition” for small islands and the world’s poorest countries.

How to hold shipping financially accountable for its climate impacts

A Pacific negotiator, who was not authorised to speak to the media, told Climate Home that this transition funding should go to projects both in and outside of the shipping sector according to “the priority needs of the climate most vulnerable”.

A Canadian proposal says each ship’s operator should decide, within certain limits, where the money it pays should go.

International climate finance sought

Loss and damage expert Persaud said shipping industry executives – and even maritime ministers – could not be expected to support a plan to spend money raised from the sector outside the industry. “It’s almost beyond their remit,” he said.

Rather, finance and environment ministers “would need to be part of the push to get the world’s most significant economic system – the trading system – to contribute to the loss and damage caused by current and past emissions in the production, consumption and transportation of goods”, he added.

Friederike Roder from Global Citizen, an anti-poverty campaign group, agreed it is “not surprising” that the IMO and the shipping sector “are trying to retain the proceeds for themselves”. But, she said, the polluter pays principle should apply more broadly to at least part of the proceeds raised from a shipping emissions levy.

Aoife O’Leary, head of shipping-focused environmental think-tank Opportunity Green, also called for some of the money to be spent on protection from climate impacts, such as projects to help flood-hit communities in Bangladesh or build sea walls on Pacific islands.

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A global finance summit in Paris last year, attended by about 50 heads of state, came to a similar conclusion and led to the launch of a taskforce by France and Kenya to explore “innovative sources” of climate finance ahead of the Cop30 climate summit in late 2025.

Danish climate minister Dan Jorgensen, meanwhile, has called a shipping tax “a potential global source” of “international climate finance”.  

At the IMO, a working group of government shipping negotiators has been formed to hammer out how to raise and spend the money, with a decision expected by this time next year.

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At international climate talks, developing countries are trying to draw a clear line between expected new funding to help them deal with the worsening “loss and damage” caused by climate change and existing finance for measures to adapt to more extreme weather and rising seas. But in drought-hit Zambia, that distinction is proving hard to make.

Climate-vulnerable nations want wealthy governments to provide additional money to repair and reduce loss and damage via a new fund set up at the Cop28 UN climate summit late last year, but fear that money could be diverted from budgets already earmarked for adaptation.

The lack of a globally agreed definition of what constitutes loss and damage will likely make hard to know whether that is happening – and there is already considerable confusion on the ground.

In a week-long trip around Zambia, Climate Home spoke about the issue with maize farmers in their dried-up fields, besuited bankers in air-conditioned offices, and the minister for green economy and environment around a polished boardroom table.

Asked what they wanted from the UN loss and damage fund, all mentioned one thing first: support for water supplies in the form of irrigation or rainwater collection, to lessen farmers’ reliance on increasingly scarce rainfall.

At the end of February, the president declared the severe drought affecting much of the country as a national emergency, blaming the El Niño weather phenomenon and climate change. He noted that the drought had destroyed nearly half the maize crop and was expected to continue.

Farmer Benson Chipungu’s healthy irrigated corn (foreground) and his dying rain-fed corn (background) on March 7, 2024 (Photo: Joe Lo)

Reliance on rain

“The drought has hit us very bad,” said farmer Benson Chipungu at his house in Chongwe, a meagre batch of corn drying behind him during a rare and brief bout of rain. “The fields are a sorry sight.”

He said he had not followed developments at Cop28 closely, but added “if I was able to access [the loss and damage fund] then irrigation systems is the major thing”.

Clara Shangabile and Gertrude Nangombe, also maize farmers and members of the Katoba youth climate champions group, tuned into Cop28 on a TV at their local secondary school.

Like many corn producers Climate Home spoke to, they want help to move into what they call “gardening”, which means growing high-value crops that don’t need much land, like tomatoes, kale, green beans and peppers. While vegetables require more water per square metre, they use less overall because a smaller sized plot yields the same amount of money as growing corn.

Gertrude Nangombe (left) and Clara Shangabile (right) stand outside Katoba secondary school on March 6, 2024 (Photo: Joe Lo)

Zambia’s green economy and environment minister, Collins Nzovu, who chaired the African Group of nations at Cop28, said the new loss and damage fund – whose arrangements are still being put in place and is unlikely to start disbursing money until 2025 – should contribute to expanding water harvesting and dams. “Food security won’t be guaranteed until we can grow our own crops,” he said.

Asked if these activities fall under adaptation or loss and damage, he told Climate Home: “they are one”. “We are being forced to adapt because of the change in climate,” he said. “I shouldn’t be building any dams if the weather pattern was the same as it was 50 years ago. But now we need that – it’s loss and damage.”

Green economy and environment minister Collins Nzovu, pictured in Lusaka on March 7, 2024 (Photo: Joe Lo)

Blurred boundaries

Climate Home asked watchers of loss and damage talks in the UN climate process – including government negotiators and campaigners – whether irrigation should be classified as adaptation or loss and damage. Their answers were varied and nuanced.

Veteran campaigner Harjeet Singh said large-scale infrastructure projects like dams are adaptation, but community-based irrigation can be a response to loss and damage. He said it was tough to distinguish clearly between the two at the local level “due to frequent overlaps”.

Adao Soares Barbosa, who is a board member for the UN loss and damage fund and a finance negotiator for the Least Developed Countries group to which Zambia belongs, said rainwater harvesting and irrigation are generally viewed as adaptation, but if they are put in place to deal with loss of water induced by climate change, then they fall under loss and damage.

Zoha Shawoo, from the Stockholm Environment Institute, said it is “not very useful to draw strict boundaries” as the two types of activity are “super-blurred on the ground”. Ideally, she said, medium-term loss and damage funding for things like relocation of communities or financial compensation for lost crops would build on emergency humanitarian aid such as food parcels.

A sign in Lusaka’s central business district advertises maids on March 10, 2024 (Photo: Joe Lo)

Support to help families struggling with drought migrate to other places would be useful in Katoba. Shangabile and Nangombe said many of their friends had moved to Lusaka to work as maids. Both are open to the idea of following them, but Nangombe worries about not being her own boss.

“If you break a cup or something, you’re fired,” she said through a translator, adding “the best is to identify something you can do as a person within the same community” – such as diversifying into vegetable production.

Mattias Soderberg, from humanitarian agency DanChurchAid, said helping these women settle into their new lives is the kind of thing the new loss and damage fund should be used for. His organisation, for example, has enabled Kenyan herders displaced by drought to learn to fish.

Board to decide

Zambians are also wondering who will be able to access the fund. In Katoba, Catholic Relief Services project officer Harrison Zimba said the community is setting up a cooperative to access grants and loans as a group, and hopes they will be able to get money from the loss and damage fund.

In Lusaka’s central business district, Cheyo Mwenechanya, head of agriculture at commercial bank Zanaco, told Climate Home his organisation also plans to tap the fund, probably working with government. He would like to channel the money into irrigation.

One certainty is that Zambia, as a member of the UN’s Least Developed Countries (LDC) group, will be eligible.

Wealthy governments have tried to restrict loss and damage funding to countries judged to be “particularly vulnerable to the adverse effects of climate change”, as stated in the decision on operationalising the new fund approved at Cop28.

It is unclear how that will be defined in practice – but if recipients are limited to LDCs and small island developing states, then Zambia’s southern neighbours Zimbabwe and South Africa, which are suffering from the same drought, would not qualify.

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

All these matters will be decided by the fund’s board. After a three-month delay caused mainly by rich nations squabbling over which of them should get seats, the board is now expected to hold its first meeting by the end of April – around the same time Zambia will be counting its paltry harvest.

The fund will need not just to agree on its rules, but also find new money – and sources of funding are likely to be scarce. The cost of loss and damage for developing countries is projected to reach $290 billion–$580 billion in 2030, according to a 2018 estimate. But wealthy governments pledged only around $0.7 billion at Cop28 in a first round of pledges, with the US offering no more than $17.5 million.

In Zambia, Minister Nzovu described those pledges as “exciting” but said “we need billions, trillions if we are going to develop our economies”. “Those who pollute more – the developed world, the Americans, must get out their cheques and pay for these losses and damages.”

Travel for this story was funded by Catholic Relief Services.

The post Is water provision in drought-hit Zambia climate ‘loss and damage’ or adaptation? appeared first on Climate Home News.

Its third and fourth Assessment Reports helped elevate adaptating to climate change into a critical issue on par with reducing emissions.

The United Nations-sanctioned organisation is in a position to once again push forward global efforts for addressing the climate crisis, especially on Loss and Damage (L&D).

Room for innovation

The outcomes of the 60th IPCC meeting were criticised for a lack of significant innovation regarding its seventh assessment report (AR7).

Despite proposals for a new structure of reporting, the body agreed to keep the current approach of three main reports and a special report.

Some experts and observers claim this approach is unlikely to produce any new groundbreaking findings on mitigation or climate science.

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As a result, it is unlikely that there will be a special report on L&D for AR7, despite support from many developing countries.

Instead, a chapter under the group report on adaptation is likely to be dedicated to discussing it.

Such an output comes at a time of record-breaking global temperatures and a potential collapse of the Atlantic Meridional Overturning Circulation.

Without proper interventions anchored on the latest and best available science, even more people than half of the world’s population would be vulnerable to disastrous impacts of tremendous economic and non-economic costs.

A chapter on L&D would influence the entire corresponding landscape under the United Nations climate change regime, from how projects would be selected under the L&D Fund to how the Santiago Network would provide technical assistance to countries on dealing with extreme climate risks and impacts.

Non-negotiables

An L&D chapter on AR7 can lay the groundwork for countries to have a more common understanding of this issue, which is needed to accelerate implementation of solutions.

This would build on the key messages from the previous assessment report, with statements such as its uneven distribution across systems, regions, and sectors and how adaptation would not be enough to fully avoid it.

It falls on its authors to ensure that this part would cover as comprehensive of an assessment of current knowledge about L&D as possible.

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This assessment must include not only peer-reviewed studies and publications, but also documenting indigenous knowledges and practices.

This would be a tangible way of improving the IPCC’s engagements with indigenous groups, a key issue raised from the conduct of the previous assessment cycle.

Another key outcome from the recent meeting, an updating of adaptation indicators, metrics, and guidelines, should be covered within this proposed chapter.

It should present an updated definition of “losses and damages”, which from the previous report is too broad; it should be defined to emphasize impacts and risks that are beyond the capacities of adaptation or mitigation.

Through this lens already commonly-used in many countries, refining and changing said metrics and indicators would help determine clearer boundaries between adaptation and L&D.

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It would also provide more specific guidance for countries and other stakeholders to determine soft and hard adaptation limits, especially at the local level, coupled with the proper provision of means of implementation.

The chapter should present the latest developments in attribution science, especially when downscaled into local contexts. It would contribute to building knowledge and capacities among local policymakers, implementors, and other stakeholders for responding to extreme weather events and preparing for, if not avoiding, future climate risks and impacts.

If our world is going to properly address the climate crisis, it needs to adjust its strategies with current and anticipated trends and impacts. This also applies to the approach of climate science, especially on loss and damage.

John Leo Algo is the National Coordinator of Aksyon Klima Pilipinas and the Deputy Executive Director for Programs and Campaigns of Living Laudato Si’ Philippines. He is an expert reviewer of Working Groups II and III chapters of the IPCC Sixth Assessment Report.

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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.

The post Rich nations miss loss and damage fund deadline appeared first on Climate Home News.

The governments are in advanced discussions with a handful of European and Global South countries that could join the coalition in Dubai, according to a source with knowledge of the talks.

The taskforce is planning to consider a broad range of options, including levies on international shipping, aviation, financial transactions and fossil fuels, Climate Home understands.

Chrysoula Zacharopoulou, France’s development minister, said the goal is to agree on specific proposals by Cop30, in two years’ time. Those could then be negotiated in relevant international institutions, like the OECD, the UN or the G20, she added.

Barbados’s climate envoy Avinash Persaud told Climate Home the country is “happy to participate” in the initiative.

What can be taxed

Many country leaders and climate experts see taxes as among the most promising so-called innovative sources of finance that could help plug the large gap in the provision of climate funding to vulnerable countries.

“The need for additional resources internationally is paramount”, said Persaud. “The Green Climate Fund, the new loss and damage fund, these all need real resources in the billions of dollars and they can’t come from existing tax-revenues so easily, so we need additional revenues.”

Taxes on fossil fuel extraction and the emissions of the shipping industry could raise up to $210 billion and $60 billion a year respectively, according to a recent study by Climate Action Network and the European Commission.

Sources of taxation and potential revenues, according to the CAN study.

However, reaching an agreement over those measures is politically challenging and would require several years.

French-Kenyan alliance

Political momentum has gathered pace since the global financial summit in Paris last June, when 40 countries agreed to look into new avenues for international taxation, focussing initially on large greenhouse gas-emitting sectors.

Speaking at the end of the event, France President Emmanuel Macron stressed the importance of global coordination. “It doesn’t work when you do it alone, the financial flows go elsewhere”, he said.

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Macron found a crucial ally in Kenya’s President William Ruto, who put the issue on the agenda at the African climate summit in Nairobi in September.

That summit’s final statement floated the idea of a global carbon taxation regime, formed by levies on fossil fuel trade, maritime transport and aviation, and potentially “augmented” by a global financial transaction tax (FTT).

Broad framework

The French and Kenyan governments have accelerated efforts over the last couple of months to form a broad coalition, receiving interest from countries, a source with knowledge of the matter told Climate Home.

Those pushing the plan have not yet finalised a detailed framework or specific targets because they don’t want to put any country off at this early stage, they added.

Farmers’ Protest in Gerona, Philippines. Basilio Sepe / Greenpeace

France’s Zacharopoulou said during last week’s Paris Peace Forum that the coalition will both provide a detailed analysis of each taxation option and gauge how acceptable they are to  different governments.

“It is a sensitive conversation that needs to be led with a cool head”, she added.

Developing countries sensitivity

Many large developing countries have opposed climate-related international taxation. They claim they would distort markets, hamper development and shift responsibility for reducing emissions.

Brazil led resistance from a group of governments to a tax on the global emissions of the shipping sector at the International Maritime Organization (IMO) earlier this year.

They argued that such a tax would disproportionately hit developing countries and particularly Brazil, whose economy relies on shipping heavy low-value things long distances.

Countries eventually decided to study new ‘technical’ and ‘economic’ measures to tackle the climate impacts of shipping, pushing a decision into the future.

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Persaud said the taskforce will need to pay close attention to these considerations. “We need to rethink shipping and aviation emissions levies so they’re not a tax on remoteness which is a concern today,” he added.

Rachel Owens from the European Climate Foundation, which is involved in setting up the taskforce, said countries will drive forward discussions “in an equitable way”.

“This means not putting the burden on developing countries and ensuring that any adverse impacts are mitigated”, she added.

The post France, Kenya set to launch Cop28 coalition for global taxes to fund climate action appeared first on Climate Home News.

But although they grudgingly agreed on what to recommend to Cop28, members of the loss and damage transitional committee warned that their bosses may want to reject this advice and re-hash debates in Dubai.

At Cop27 climate talks in Egypt last year, governments agreed to set up a loss and damage fund to channel money to those suffering from destruction caused by climate change. They tasked a 24-member transitional committee to work out the details this year and report back to Cop28.

After five gruelling meetings, that committee completed what co-chair Outi Honkatukia described as “mission impossible” on Saturday night at a five-star hotel in Abu Dhabi.

Developing countries conceded to let the World Bank host the new fund on a temporary basis, with a view to making it independent later. They had reservations about high costs and the US’ ideological influence on the World Bank.

The US, on the other hand, made limited headway in broadening the pool of donors expected to contribute.

Bad blood

US negotiator Christina Chan expressed the most unhappiness.

Her last-minute requests to weaken developed countries responsibility to pay into the fund were rejected by the committee’s co-chairs, who said it was a “take it or leave it” text as there was no time left to negotiate.

Although the meetings cameras did not pick this up, developing countries lead negotiator Pedro Luis Pedroso Cuesta claimed that Chan left the room as co-chairs were about to finalise agreement. “Leaving the room was meant to [paralyse] the committee,” Cuesta said.

But, hearing no objections, co-chair Outi Honkatukia banged her gavel to signal agreement. As negotiators applaud, the meeting room’s camera showed Chan walking across the room back to her seat.

A few minutes later, she said that she had objected to the text a couple of times.”If this is consensus-based, I’m not sure why there is now a decision,” she said.

On the other side of the debate, Egyptian negotiator Mohammed Nasr said he was “not happy with the text” but would accept it for now.

He added: “Once we are at the Cop[28], there will be discussions around the document… we have several reservations that we have highlighted.”

Bouncing her crying baby up and down, Armenia’s deputy environment minister Gayane Gabrielyan asked: “Is it we who will be the final decision-makers?”

She added: “I don’t think so. We are going to Cop. We are going to big bosses with our suggestions.”

Who pays?

A major split was that developing countries wanted more emphasis on the group of countries the UN classified in 1992 as developed being responsible for paying into the fund.

These developed countries wanted to broaden out responsibility to wealthier countries still classified as developing, like Singapore, Qatar and Saudi Arabia.

They compromised on an agreement which "urges" developed countries "to continue to provide support" but only "encourage[s]" other countries to provide support.

It "invites financial contributions with developed country Parties continuing to take the lead to provide financial resources" for setting up the fund.

Celebrating the agreement, the EU's lead climate negotiator Wopke Hoeskstra posted on X that "all parties can contribute to it - and I believe that all who have the ability to should do so".

This evening, EU negotiators in Abu Dhabi reached an important agreement with global partners on #lossanddamage.

The world will get a fund focused on support for the most vulnerable. All parties can contribute to it - and I believe that all who have the ability to should do so.

— Wopke Hoekstra (@WBHoekstra) November 4, 2023

The negotiators agreed there will be a fundraising round for the fund every four years, like there is for the UN's Green Climate Fund. But donors can give money at any time.

Money can come from the private sector or from innovative sources, which aren't specified but could include taxes on fossil fuels, shares or airplane tickets.

Who benefits?

Developed and developing countries were split on who should be able to receive money from the fund, after governments at Cop27 agreed it should be restricted to developing countries which are "particularly vulnerable".

Developing countries argued they are all particularly vulnerable. But developed nations wanted to restrict funding to small island developing states (Sids) and the world's least developed countries (LDCs).

They settled on just repeating similar language to Cop27 that "developing countries that are particulaly vulnerable" to climate change are eligible. There is no agreed definition of vulnerability.

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They agreed that all developing countries should be able to access the fund's resources when that is "consistent with policies and procedures" that the fund's board establish in the future.

The board will have a majority of developing country representatives, despite a US push to weight it towards developed ones.

Developed countries wanted to set up sub-funds, so they could finance their preferred areas like support for small islands, climate-driven migration or slow onset events like sea level rise.

But developing countries succesfully opposed this, arguing that the fund's board not the wealthy donor countries should decide where the money goes.

There will be a minimum floor for the percentage of money that goes to Sids and LDCs.

The EU's lead negotiator Wopke Hoekstra posted that the fund will be "focused on support for the most vulnerable".

Who hosts?

The US and other developed countries wanted the fund to be hosted by the World Bank.

This would mean it would be based at the bank's headquarters in Washington DC and its staff will be employees of the bank.

Developing countries resisted this, accusing the bank of charging high hosting fees, a weak climate record and compromising its fund's independence.

The bank's head is chosen by its biggest shareholder, the US government. Opposing the bank as host, developing countries lead negotiator Pedro Luis Pedroso Cuesta said last month: "We know the history. We know the politics. We know the manipulation."

Avoid our mistake: Don’t let World Bank host loss and damage fund

They compromised on making the bank the interim host for four years, with a number of assurances that the fund will become independent.

Celebrating the agreement, Cop28 president Sultan Al Jaber said in a statement that the committee had "broken deadlocks and found common ground to deliver clear recommendations".

He added: "Parties must seal the deal in Dubai... billions of people, lives and livelihoods who are vulnerable to the effects of climate change depend upon the adoption of this recommended approach at Cop28."

The post World Bank to initially host loss and damage fund under draft deal appeared first on Climate Home News.

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.

The post Avoid our mistake: Don’t let World Bank host loss and damage fund appeared first on Climate Home News.

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.

While rich and poor countries have agreed to set up a fund to address loss and damage caused by climate change, they are miles apart on who pays and who benefits.

At a ministerial meeting on the sidelines of the UN general assembly on Friday, there was little sign of bridging the gap. The event complemented ongoing technical discussions ahead of Cop28 climate talks in Dubai this December, where decisions are due on how to get the fund up and running.

Ana Mulio Alvarez, an analyst at E3G, said the meeting “did not advance negotiations but it served as a political moment to put the cards on the table more publicly”.

A transitional committee has been working since March to draw up the rules for the fund.

Who gets the money?

One of the major sticking points is the question of who should be eligible for help.

The decision adopted at last year’s Cop27 summit in Sharm el-Sheikh, Egypt, says it should assist “developing countries that are particularly vulnerable” to climate change impacts. That is open to interpretation.

For the vast majority of rich countries, the pool of beneficiaries should be limited.

Developing countries call for $100 billion loss and damage target

The EU’s interim climate chief Maroš Šefčovič told the meeting that the resources should “explicitly target countries and its communities that are particularly vulnerable to the adverse effects of climate change, such as least developed countries (LDCs) and small island developing states (SIDs)”.

His views were echoed by the representatives of the US, UK and Australian governments, among others.

‘No discrimination’

Developing countries disagree with the position, arguing that all of them should be able to tap into the fund’s coffers.

Speaking on behalf of the G77 group of developing countries, a representative from Cuba said “the fund should operate without discrimination”.

At UN climate summit big polluters’ absence speaks volumes

Among the most vocal campaigners for a fund open to all is Pakistan, where devastating floods killed more than 1,700 people and caused damage totaling more than $30 billion last year. Classed as middle income by the World Bank, it would not automatically qualify for support based on a tight definition of vulnerability.

“All vulnerable developing countries, irrespective of their level of development and geographical grouping, must be eligible,” said Pakistan’s foreign minister Jalil Abbas Jilani. “We would not be able to lend our support to any such select, divisive and exclusionary approach.”

Speaking on behalf of the Alliance of Small Island States, Samoa said all developing countries should be eligible, but the fund’s resources should be “allocated equitably” so that the small island states are “not left behind and forgotten”.

Who pays?

The question of who pays into the fund is equally contentious.

When the European Union opened the door to a fund at the Cop27 climate talks last year, its then climate chief Frans Timmermans said large economies like China should also pay. The agreement was eventually struck without that condition, but the same debate has now reemerged.

EU’s Šefčovič said the fund should attract contributions from “all well-resourced governments”, in addition to innovative sources of financing, philanthropies, and the private sector. Spain and France floated the idea of introducing new taxes and levies as a way to bolster resources.

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The UK’s energy minister Graham Stuart said governments “must break out” of “outdated categories from decades ago”, to deliver the volume of support needed. His statement was likely referencing the UN classification of developed countries established in 1992. The fund “must be financed by all, all of those capable of doing so,” Stuart added.

Similarly, the US disagreed with the notion that only developed countries would be invited to pay into the fund. “There is no existing donor base for loss and damage funding, it is a new idea,” a government official said.

The counterargument is that history matters. Developed countries got that way by being early adopters of coal, oil and gas. Emissions dating back to the industrial revolution are still in the air causing suffering today.

“Developed countries should effectively fulfill their funding obligations,” said China’s representative. “Developed countries who shoulder historical responsibilities for climate change should provide new additional finance for the funding arrangement of the fund in the form of grants supplemented by concessional loans.”

Debt trap fears

Developed and developing countries also disagree on what the money should be spent on, how the fund should be governed and whether it should be delivered as grants or loans

Avinash Persaud, special finance envoy to Prime Minister Mia Mottley of Barbados, is on the transitional committee. He told Climate Home he feared some developed countries see the loss and damage mechanism more as a way to coordinate existing funding that is primarily loan-based.

“Countries that are particularly vulnerable are already highly indebted,” he said. “We are going to be drowning in debt if we need to get loans every time get hit by a climate event.”

Time running out

With the clock ticking to the climate summit, the time to strike a compromise is limited.

The transitional committee is holding another round of talks next month, before preparing its recommendations for governments to consider in Dubai.

Persaud said he remained “cautiously optimistic” that countries will reach an agreement.

E3G’s Mulio Alvarez said the disagreements put the negotiations in a “tough position”.

“Real steps need to be taken towards a transformation of the financial architecture in order to meet needs, rebuild trust and increase understanding between parties,” she added. “There is a real risk that the fund could be set up but not adequately funded or truly operational.”

The post Ministerial shows fault lines on climate loss and damage fund 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.

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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.

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.”

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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.

Their study, published today in journal One Earth, finds 21 coal, oil and gas companies responsible for $209 billion a year in compensation for extreme weather and other climate change impacts predicted to occur around the world between 2025 and 2050.

Emissions from these companies’ operations and the use of their products between 1988 and 2022 contributed significantly to that harm, the study concludes. Global emissions surged over that 34-year period, despite the IPCC’s increasingly urgent warnings about the need for concerted action.

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The study was led by Marco Grasso, professor of political geography at the University of Milan-Bicocca, and the Center for Climate Accountability’s Richard Heede. Heede produced the landmark Carbon Majors study, which in 2013 quantified for the first time the amount of historical carbon emissions attributable to the fossil fuel industry.

Building on the Carbon Majors database, which continues to record data on emissions from the largest polluters, and a survey of 738 climate economists, the new study estimates climate change will cause $99 trillion global economic damages between 2025 and 2050. 

Of this, it attributes a “conservative” $23.2 trillion per year in GDP loss to the coal, oil and gas industry, and the rest to non-fossil polluters, governments and consumers. That works out at $893 billion a year. The study then focuses on the world’s 21 largest fossil fuel companies, pinning them down to a collective $209 billion annually.

By far the biggest sum ($43 billion) is attributed to Saudi Aramco, which produced the most emissions between 1988-2022. The researchers describe this as “substantial but low” compared to the $161 billion the company made in profit last year.

Exxon is next with attributed annual reparation payments of $18 billion.

However, the researchers exempted four state-owned fossil fuel companies in low-income states: National Iranian Oil Co, Coal India, Petroleos de Venezuela and Algeria’s Sonatrach. And they halved the liability for companies in six middle-income countries. 

They did this to avoid penalising people in poorer countries who are more vulnerable to the impacts of climate change and have contributed much less historically.

'Tip of the iceberg'

While substantial, the researchers say the sums do not take into account the value of lost ecosystem services, extinctions, loss of human lives and livelihoods, and other aspects of wellbeing not captured by GDP. “This is only the tip of the iceberg of long-term climate damages, mitigation and adaptation costs,” said co-author Heede. 

The study only includes emissions from 1988 because that's when "claims of scientific uncertainty about the consequences of carbon emissions [became] untenable", as the Intergovernmental Panel on Climate Change was set up and scientist James Hansen testified on humans role in causing climate change to the US Senate. Many of these firms were polluting long before 1988.

The researchers say fossil fuel companies have a “moral responsibility” for remedying climate harm through their contribution to global greenhouse gas emissions, and their history of climate denial and misinformation which has slowed down global action.

They do not see a global reparations scheme as a substitute for climate finance under the United Nations (UN). But, with the UN's Green Climate Fund failing to provide sufficient funding for adapting to climate change and the loss and damage fund agreed at Cop27 yet to get up and running, they conclude that existing mechanisms should be complemented by money from fossil fuel firms.

Lead author Grasso said he hoped the work would inform future efforts to direct payments towards harmed parties. “The proposed framework for quantifying and attributing reparations to major carbon fuel producers is grounded in moral theory and provides a starting point for discussion of the financial duty owed by the fossil fuel industry to climate victims”, he said. 

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Nations vulnerable to climate change have increasingly been calling for polluting companies like fossil fuel producers to pay for the loss and damage caused by climate change. The influential prime minister of Barbados Mia Mottley, in particular, has led the debate on this issue, while United Nations secretary general António Guterres suggested a windfall tax on oil and gas profits to fund loss and damage.

Mottley's finance advisor Avinash Persaud told Climate Home: "I don’t feel talking in terms of compensation is helpful to achieving the contribution we want. Issues compensation raises is should it be producers or consumers, current or past shareholders? Gas versus oil?"

"But," he added, "the industry and its consumers do have a responsibility and a contribution of $209bn would meet the bill for those things that you can’t easily borrow against without sinking under oceans of debt, like loss and damage and biodiversity protection".

"If spread across global exports, linked to carbon content, and supplemented with contributions from other sectors, I feel this number is in the right ball park for those things that cannot be borrowed for," he said.

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A UN-commissioned report estimated that developing countries need to spend $2.4 trillion a year responding to climate change. But of this, Persaud estimates that all but around $350 billion can be funded by private companies seeking profit.

This includes projects like solar farms, which companies can develop and make money from, but excludes projects which are harder to profit from like re-training fossil fuel workers and building seawalls to protect people and property from rising sea levels.

A reparations scheme would also exist alongside the wave of climate-related litigation occurring around the world against fossil fuel companies.

The researchers said that, while a reparations scheme would not indemnify the industry from legal action “it may, for companies that pay reparations and show strong progress on reducing operational and product emissions, defer or even avoid being named as defendants in future law”

As an incentive to act, the researchers propose that companies could be eligible for reduced  payments if they stop producing polluting fuels soon or meet their verified net zero targets.

The post Study: Fossil fuel firms owe $209bn a year for climate damage appeared first on Climate Home News.

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.

I’m a COP veteran. Here are 3 suggestions for the new Loss and Damage fund

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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They can make a significant contribution to global efforts to address the climate crisis – if their rights are protected.

The Green Climate Fund – the UN’s flagship climate fund – is being put to the test to heed this call.

Indigenous representatives have complained that one of the fund’s projects in Nicaragua risks fuelling escalating violence from settlers invading their land to farm cattle and exploit the forest’s resources. They say the GCF approved the project without their consent or due diligence.

Last week, armed settlers reportedly attacked two communities and killed at least five people. The Nicaraguan government has turned a blind eye.

This is the first complaint case to reach the GCF board and a test of the fund’s ability to enforce its own safeguards.

Because of its sensitivity, board members discussed the case behind closed doors at a meeting this week. But the meeting drew to a close Thursday without a public outcome to the growing frustration of civil society groups. Meanwhile, the violence continues.

Also this week, Mafalda Duarte was selected to take the reins of the GCF’s secretariat from French UN veteran Yannick Glemarec. As CEO of the Climate Investment Funds, Duarte has launched programmes that provide direct financing for indigenous communities to protect natural resources.

Perhaps, these are some of the skills she can bring to the GCF.

This week’s stories

• Green Climate Fund credibility hangs over response to violence in Nicaragua project
• Loss and damage committee ready to start talks following Asian nominations
• Argentina secures funding boost to kickstart gas exports from ‘carbon bomb’
• IMF approves first batch of climate resilience loans
• Lawyers and activists build pressure on Korean court to rule on climate
• Chinese coal boom a ‘direct threat’ to 1.5C goal, analysts warn
• Mafalda Duarte named as next chief of UN climate fund
• Vietnam’s energy transition deal is a ‘black box’, partner warns

The expansion of fossil fuel production continues to cause significant harm to indigenous peoples around the world.

In Argentina, campaigners say president Alberto Fernández’s plans to export record amounts of gas from the Vaca Muerta fields will further trample the rights of indigenous Mapuche people.

The Latin American Development Bank recently agreed to support the Néstor Kirchner pipeline, which will channel gas to Argentina’s northern Santa Fé province for export to neighbouring countries. Fernández is also eyeing exports to Europe amid plans to build an LNG terminal in Buenos Aires.

This fossil fuel buildout and a renewed coal boom in China risks pushing the world towards more violent climate disasters. As Malawi reels from what could be the longest-lasting tropical storm on record, we are once again reminded that the most vulnerable will suffer first.

The post Nature’s stewards under attack – Climate Weekly appeared first on Climate Home News.

The move comes a little over a week before the committee on loss and damage is due to hold its first meeting in Luxor, Egypt, on 27-29 March. It means every position on the committee has now been filled.

In a breakthrough deal at the Cop27 climate talks, countries agreed to set up a fund dedicated to support vulnerable countries address climate-related losses and damages. But how the fund will operate, who will pay, who will benefit and how it will be governed remain to be worked out.

To do so, countries agreed to appoint a 24-member committee to make recommendations ahead of the next round of UN climate talks in the UAE.

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

Regional tensions

The make-up of the committee carefully reflects geographies and groupings of countries based on wealth. It includes 10 members from developed countries and 14 from developing nations.

The Asia-Pacific group was the last to nominate its members. The group has three seats, including one for a representative of the UAE Cop28 presidency. Sources told Climate Home News that competition between Asian countries caused the delay.

“It’s a fractious region,” a committee member from a different grouping told Climate Home. “Everyone hates each other. They have almost each had a war with the other and border skirmishes.”

Compromise

To resolve the issue, the group appointed representatives from six countries to share attendance to three planned meetings this year. India, the Philippines and Saudi Arabia will share one seat, while China, South Korea and Pakistan will share the other.

The Asia-Pacific group is not the only one which has had to compromise. Countries from Latin America and the Caribbean and wealthy nations are also sharing seats to allow more governments to join the discussions.

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

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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”.

UN budget cuts hindered response to Pakistan’s extreme floods

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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Flooding returned stronger every year since, upending the city in both 2021 and 2022. “We never know what kind of damage to expect when it rains,” said Razia Sunny, who lives by one of Karachi’s nullahs – narrow channels that drain wastewater from the city to the sea.

“Residents here have gotten sick because of the waste flooding into our homes during urban flooding, we’ve even had people slip and fall [into the nullahs],” Imran Gill, another resident of the informal settlement, told Climate Home News.

Since 2017, the World Bank has poured millions of dollars into Karachi. The city, population 16 million, is the backbone of Pakistan’s economy. But come monsoon season much of the city is submerged – not least during the extreme flooding of 2022.

A major problem is trash clogging the nullahs, so stormwater overflows. Sweep was supposed to help by improving solid waste management, but two years into the five-year project, there is no sign of progress. Less than 3% of its $100 million budget has been spent, and none of it on new infrastructure.

Slum clearance

Project officials took the promise of funding as a cue to clear slums alongside the waterways. The provincial authority demolished thousands of homes without, residents say, any consultation or plan to find them somewhere else to live.

Climate Home reviewed dozens of official documents, interviewed officials inside the projects and visited the sites affected by flooding. In the sites near Karachi’s sewage infrastructure, Climate Home found several cases where residents of informal housing got injured or even died during extreme floods in 2020 and 2022.

When human rights organisations raised concerns about the demolitions, the World Bank distanced itself from the project.

The Sweep project should have executed millions of US dollars (green line) by 2022, but the actual disbursed amount (in blue) was much lower (Photo: World Bank Implementation Status & Results Report Dec. 2022)

Government officials insist things are not going too badly. “We’re only delayed by three or fourth months,” Sweep director Zubair Channa said.

The World Bank seemingly agrees: its project reports in March 2021 and November 2021 declared progress “satisfactory”, even though no work had been completed on the ground. This rating changed to “moderately satisfactory” for both the June 2022 and December 2022 reports, after further inaction.

In response to Climate Home’s request for comment, the World Bank defended the project and said the consultancy was “fairly advanced and expected to deliver their outputs soon”.

“Based on the current schedule, we expect the construction of the waste disposal facility and transfer stations to commence in early 2023,” said the bank’s press office.

Karachi’s nullahs carry waste from the city to the sea, and are often surrounded by informal settlements. (Photo: Shakeel Afridi)

This is a climate adaptation issue. Global heating “likely increased” the intensity of monsoon rains in 2022, when flooding hit 33 million people across the country, an international group of scientists found. More extreme events are expected under a 2C warming scenario.

The money trail

So what has happened to the promised funding? The money comes in the form of loans to the provincial government of Sindh.

Among a few feasibility studies and some operational costs, documents show the authorities have so far spent $91,891 (which at the time was converted to almost PKR 16 million) on furniture. An official source associated with Sweep, who asked not to be named, said the number was too high and seemed out of place.

A report of operational costs by the Sweep project shows more than $91,000 spent on furniture. (Photo: Solid Waste Emergency and Efficiency Project – Procurement Plan by Zubair Ahmed Channa)

“We’re a poor country; we can’t afford to spend like this on operational costs, not when that money will be paid back by citizens who already can’t afford it,” said architect and urban planner Dr Noman Ahmed, chairperson of Department of Architecture and Planning at the NED University Karachi.

The Sindh Government’s procurement plan earmarks $8 million for equipment ranging from bins to waste collection vehicles. Another $30 million is destined for implementation “works”. This money has yet to be disbursed.

On all aspects of these expenses, bank oversight is meant to come once the project is concluded. Yet related projects raise red flags.

In November, the Sindh High Court barred the provincial government from awarding any more contracts under the World Bank’s Competitive and Liveable City of Karachi (Click) project, citing a lack of transparency over where the money was going.

Fahad Saeed, South Asia and Middle East lead at the policy NGO Climate Analytics, said: “Pakistan needs to do some introspection as to why they were unable to tap into the funds that were available. Was their own house in order to access these funds?”

In 2021, the world’s governments agreed at COP26 to double the amount of international adaptation finance by 2025, which stands at around $20 billion per year.

Why does Karachi flood?

Decades of neglect in Karachi’s sewage and waste disposal systems created the perfect recipe for flooding in the city. Every year, come monsoon season, the city’s debilitated drainage system clogs and water overflows.

More than 6 million people in Karachi live in informal settlements, many of which have encroached the city’s nullahs – the riverbeds that carry waste from one end of the city all the way to the sea.

These populations are the first victims of urban flooding, and also major contributors to the problem.

Gujjar nullah residents use a community-funded makeshift bridge to get around. The bridge can be torn down at any time by authorities. (Photo: Shakeel Afridi)

“In 2019, when the Sindh Government took the issue to the World Bank, we realised that there was a serious requirement to clean the nullahs once or twice a year,” Sweep director Channa told Climate Home News.

After bad urban flooding in 2020, the Sindh Government reached out to the World Bank to speed up the cleaning of nullahs. “We asked to be allowed to work and they agreed, so despite Sweep not having been signed yet work began, and we were to get the money back through retroactive funding,” Channa said.

The World Bank announced the decision to finance these efforts in December 2020, saying they would “improve solid waste management services in Karachi” and “upgrade critical solid waste infrastructure”. This would help to reduce floods “especially in vulnerable communities around drainage and waste collection sites.”

The reality on the ground was different.

Destroyed homes

Instead of protecting the vulnerable, the provincial authorities started by bulldozing homes that had been built without planning permission.

The World Bank denied responsibility. “There were meetings between civilians and WB officials, who claimed to us that they had never sanctioned any encroachment removal,” Zahid Farooq, senior manager at Karachi’s Urban Resource Centre, told Climate Home.

KBT PRESS RELEASE
In their recent correspondence with KBT, World Bank has confirmed that they will neither retroactively nor prospectively finance any nullah cleaning activities because affectees have still not been involved in the rehabilitation process pic.twitter.com/sk2dqLsl1U

— Karachi Bachao Tehreek (@StopEvictionKHI) July 9, 2021

The World Bank’s press office told Climate Home their projects “will be prohibited from financing any future investments on the affected nullahs. Sweep will not retroactively or prospectively finance any nullah cleaning works, or any studies related to the nullahs.”

Then, in 2022, extreme flooding hit informal settlements the hardest, turning the water filled area around the nullahs into quicksand, according to resident Imran Gill. “No one has ever died because of the nullahs before all this construction took place. And yet, the area has now seen several people lose their lives.”

Bhutta Masih died in flooding this year when the ground beneath his feet went out. He leaves behind five children and his widow, Parveen. His youngest son helped pull his father’s body out with ropes and has found it difficult to recover from the trauma.

“He used to have a job but lost it. He hasn’t been okay mentally since that day. We can’t afford this,” Parveen said.

Bhutta Masih’s widow Parveen stands next to the barricades that were added after his
death (Photo: Shakeel Afridi)

Owners of the broken homes are not permitted to rebuild what remains of their homes – even by hanging curtains.

But some have nowhere else to go. Ruksana and Sadayat, a couple in their 80s who have lived most of their lives on the nullahs, used broken bricks they found to do some repair work.

“We know they can break this down, but we have no other choice but to rebuild it. We can’t afford the rent [elsewhere], and when they come to tear it down, they will tear it down. What can we do?” Ruksana asked.

Sweep’s future

Despite all its troubles, Sweep director Channa told Climate Home that Karachi’s flooding wasn’t as bad as previous years.

Urban planning expert Ahmed said this was “completely untrue” and infrastructure under the WB’s Competitive and Livable City of Karachi (Click) project had caused flooding to worsen.

“They’ve done improvement projects, for example, the green belts, which themselves created bottlenecks,” he said. “It seems that this was nothing more than an emergency cleaning effort with no long-term thought process for solutions. When the WB is intervening with such a large portfolio, why aren’t they providing a plan to help the people who are being displaced?

Ruksana and Sadayat sit in what used to be their living room (Photo: Shakeel Afridi)

Lawyer and activist Abira Ashfaq has worked with the affected communities. She said the World Bank failed to use its influence on the Sindh government to help people living on the nullahs.

“We filed a complaint with the WB, and they deemed our case eligible. We held five meetings with WB officials and with the stakeholders,” she recalled. “Nevertheless, they distanced themselves and said their project was only meant to address waste disposal, and they eventually dismissed our complaints, claiming no responsibility,” she said.

The result of this interaction was that the nullah cleaning work was once again thrown back to the Sindh government, which has now handed it over to the Frontier Works Organization (FWO), the engineering wing of the Pakistan Army.

For now, residents can expect little more in the way of flood aid than tarpaulins from local NGOs to cover their damaged homes. They rely on each other and wait for the next flood.

The post World Bank adaptation funds slept through Pakistan’s record flooding appeared first on Climate Home News.

In August, Climate Home sent reporters to two sugar-growing states. In the first of a four-part series published today, they report that climate change is making the lives of sugar farmers much, much harder.

To grow sugar, you need steady weather. But the state of Maharashtra endured a heatwave followed by downpours – neither of which are good for growing sugar. So farmers are struggling to make ends meet.

Like farmers around the world, climate change is making them think about moving. But they are loathe to leave their community and their way of life for the city.

Why not grow something else, which isn’t so vulnerable to the changing weather’s whims? Because the government gurantees to buy sugar at a certain price. It does not do so for other crops like cotton and soy beans.

This week’s stories

• India’s sugarcane farmers struggle to cope with droughts and floods
• After developing country walkout, ministers arrive to rescue nature talks
• Climate Home’s five must-read climate change stories from 2022
• Destruction of Brazil’s Cerrado savanna soars for third year in a row
• Rich nations mobilise $15.5bn for Vietnam’s coal-to-clean transition
• Vulnerable communities must call the shots on loss and damage fund
• EU strikes internal deal to tax carbon at its borders
• Governments split on ditching nature-harming subsidies in Montreal

These sugar farmers are exactly the kind of people that Zoha Shawoo and Inès Bakhtaoui likely had in mind when they wrote for us this week that vulnerable communities must be calling the shots on how loss and damage funds are eventually dished out.

They want them on the new loss and damage fund’s board and controlling how project budgets are spent. They don’t want them to have to jump through bureaucratic hoops to get the money or have to battle over scarce funds with other victims of climate change.

As in climate talks, finance has been a key division in nature talks in Montreal this week. India was one of more than 60 nations whose negotiators got up and walked out of finance negotiations in the early hours of Wednesday.

They say the rich world says it wants to protect nature but won’t give them the money so they can do so. Ministers arrived yesterday to try and sort out the mess by Monday.

Ahead of the summit, the Global Environment Facility’s head told Climate Home this summit was “Copenhagen or Paris”. At the moment, it’s looking distinctly Danish.

The post The sweet life goes sour – Climate Weekly appeared first on Climate Home News.

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.

The climate summit in Sharm el-Sheikh delivered what vulnerable countries had asked for: a decision to establish a bespoke fund to help climate victims recover from disasters.

But as Mohamed Adow, a long-time campaigner in the UN climate process and director of Power Shift Africa, put it: the fund is currently an empty vessel.

“The next task is to get money flowing through it to the frontline communities that need it.” And on that, the message from the climate frontlines stands: “Don’t fail us.”

Who pays into the fund has become the next explosive question to be resolved between now and Cop28 in the UAE.

It’s about attributing blame for the cumulative impact of coal, oil and gas burnt since the industrial revolution and working out who is in a position to pay.

Rich countries want to spread the burden beyond countries classed as “developing” under the UN climate convention in 1992.

To find out who should be on the hook, Joe Lo crunched the numbers. Spoiler, China doesn’t make the list. And rich countries, notably the US, which are still not putting enough climate cash on the table could make the biggest difference.

This week’s news…

• Battle lines drawn in talks on new plastic treaty 
• ‘Unparalleled in the world’: Australian grid operator maps path to 100% renewables
• Vanuatu publishes draft resolution seeking climate justice at UN court
• Who should pay for loss and damage? Spoiler: not China

…and comment

• The climate vulnerable are starting to roar – Mohamed Adow, Power Shift Africa

China overtook the US as the world’s largest emitter around 16 years ago. But cumulative per capita emissions since 1990 show China is nowhere near as polluting as the US, Germany or the UK – early fossil fuel adopters. In the world’s second largest economy, the average Chinese person still earns just a third the income of the average European.

By these metrics, South Korea, Singapore and Israel, and rich oil and gas producers like Qatar, Kuwait and the UAE are prime candidates to chip in.

A broader debate on expanding the donor base for climate finance is coming down the track. This is arguably a more forward looking issue than climate damages caused by past emissions. Don’t expect people to stop asking: “What about China?”

The Pacific island of Vanuatu has little faith that countries will deliver what is needed to prevent and recover from life-threatening climate impacts. In a draft UN resolution published this week, it is urging countries to give the  International Court of Justice a mandate to clarify what states’ climate obligations are and the consequences for those causing climate harm.

The island, whose future hinges on the world meeting its climate goals, says more than a 100 countries have expressed support for the initiative to establish clear legal avenues for climate justice. The warning stands: “Don’t fail us… or we will see you in court.”

The post ‘Don’t fail us’ – Climate Weekly 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.

On one of the most contentious issues at Cop27 in Sharm el-Sheikh, EU climate chief Frans Timmermans hinted at room for compromise.

“We want to be bridge builders. We are open for this facility, but under certain conditions, and we need to discuss this,” Timmermans told reporters on Wednesday.

A group of 134 developing countries, known as the G77, and China, is calling for agreement in Sharm el-Sheikh this week to set up a loss and damage facility.

Rich countries prefer a “mosaic” of funding arrangements. The EU argues a facility is just one option to consider – and the decision should be made at next year’s summit.

Existing and new funding instruments, ranging from debt relief to a windfall tax on oil and gas profits, should form part of the solution, Brussels says. Many of these sit outside the UN Climate Change process.

Current v historic responsibility

In any case, Timmermans said the pool of contributors should be broader than the list of countries defined by UN Climate Change as “developed” in the 1990s.

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

Lula charms UN climate summit, bringing hope for rainforests

Last week, the prime minister of Antigua and Barbuda appeared to agree. “We all know that India and China… are major polluters and the polluters must pay,” Gaston Browne said. “I don’t think that there’s any free pass for any country.”

The island leader later clarified that there had to be a “differentiated assessment” that took into account historic emissions.

At a press conference last week, China’s climate envoy Xie Zhenhua said Beijing made voluntary contributions through south-south cooperation and was under no obligation to do more.

Developing countries’ position hasn’t budged. Under a detailed proposal published on Tuesday, the G77 calls for a committee to work out how the facility would work for approval next year.

The EU’s shift in position puts the spotlight on the US, which has so far rejected the proposal for a new fund. “That’s just not happening,” climate envoy John Kerry said on Saturday, citing concerns about liability for compensation. In other interviews, he took a softer tone, but remained vague about where the landing ground might be.

Need for speed

One of the arguments against a facility is it would take too long to get money flowing.

Developing countries have previously said the new fund could be modelled on the UN’s flagship Green Climate Fund (GCF), which was established in 2010. It took five years for the first projects to be approved.

The EU argues existing and new financial instruments outside the UN climate process could deliver funding at the scale needed, more quickly.

On Wednesday, Timmermans announced that the EU had allocated €60 million ($62m) for “loss and damage” from its Global Gateway programme. This would support an early warning initiative, climate and disaster risk finance and insurance mechanisms.

Other ideas include a new trust under the World Bank, a funding window at the GCF, a windfall tax on oil and gas profits and reforms of the financial system.

‘Complete contradiction’: Egypt burns dirtier fuel to sell more gas to Europe

The Alliance of Small Island States (Aosis) has so far been unimpressed with wealthy countries’ alternative proposals. In a statement, the group said it was “gravely concerned” with the lack of progress on the issue.

Aosis chair and environment minister Molwyn Joseph, of Antigua and Barbuda, said some countries like the UK and New Zealand, had been “willing to engage”.

But “some developed countries are furiously trying to stall progress and even worse, attempting to undermine small island developing states,” he said.

Following ministerial consultations on Wednesday afternoon, one source close to the discussion told Climate Home that some developing countries may be ready to accept a compromise, as long as it leads to a decision on funding arrangements at Cop28 next year.

The post EU opens the door to a loss and damage facility – if China pays appeared first on Climate Home News.