The transitional committee held 4 scheduled conferences and two workshops in Egypt, Germany, Thailand and the Dominican Republic throughout March-October 2023.
After the failure of the fourth assembly to achieve consensus, it additionally held an emergency fifth assembly in Abu Dhabi from 3-4 November 2023.
The committee’s activity was to provide you with a collection of suggestions for the loss-and-damage fund that might then be authorised by leaders at COP28.
This included establishing which monetary sources would feed into the fund, what sort of actions it may assist and the way it might work alongside current funds. The suggestions additionally coated the place the fund could be positioned and the way it might be structured and ruled.
Over the course of those conferences, nations and civil society teams submitted proposals for the fund. These concepts have been assessed by the committee and, in the end, fed right into a collection of paperwork that have been topic to additional scrutiny and debate.
As talks entered further time in Abu Dhabi, the committee co-chairs offered members with what one in all them, Outi Honkatukia of Finland, known as a “take it or depart it bundle”. This tried to distil all of the competing views right into a viable set of suggestions that might kind the premise of a COP28 determination.
After passing up alternatives to object earlier on, US committee member Christina Chan raised a last-minute concern about language “urg[ing]” developed international locations to assist the fund.
All through the talks, the US had persistently pushed again towards any language that compelled developed international locations to pay into the fund. (Whereas “urge” is in the direction of the stronger finish of the lexicon of UN authorized drafting, it doesn’t, actually, indicate compulsion.)
Chan requested for this textual content to be bracketed, indicating it had not been resolved.
The co-chairs reasoned that every one members had objections to the ultimate textual content for varied causes, however the committee had already reached consensus and it was too late to reopen negotiations. “As soon as we begin bracketing, that doesn’t cease,” Honkatukia instructed the assembly.
Given this, Chan mentioned the US didn’t view the ultimate determination as reaching consensus. Teresa Anderson, international lead on local weather justice at ActionAid Worldwide, tells Carbon Temporary that the US’s “forceful objections to the transitional committee’s suggestions counsel that this textual content may not sail easily by COP28”.
Who would obtain cash from the fund?
At COP27, nations agreed to create the fund to help “growing nations, particularly these which are notably susceptible” to local weather change. Nonetheless, the interpretation of “notably susceptible” remained a degree of rivalry.
EU committee members, for instance, urged that the fund ought to solely serve least developed international locations (LDCs), small-island states and “different notably susceptible international locations primarily based on particular eligibility standards”.
Members of the G77 and China resisted what they perceived as efforts to slender the main focus of the fund. In a press release launched in the direction of the top of the fourth assembly, Cuban G77 chair Pedro Pedroso Cuesta mentioned:
“We should make sure that the executive preparations of the fund don’t impede direct entry to all growing international locations notably susceptible to local weather change.”
Sherry Rehman, former local weather minister of Pakistan and G77 chair at COP27, instructed a press convention that the fund needs to be “extra inclusive” – citing flood-struck Pakistan and Libya as middle-income nations which may not have the ability to entry it, ought to extra restricted standards be adopted.
The ultimate textual content agreed by the committee doesn’t specify which international locations could be eligible to obtain funds. As an alternative, it says the fund’s board would develop a “useful resource allocation system”, primarily based on the accessible proof and with a minimal proportion allotted to LDCs and small islands.
Who would contribute to the fund?
At present, solely a small group of “Annex II” international locations, which have been deemed “developed” when the unique UN local weather treaty was agreed in 1992, are obliged to offer local weather finance.
These events have persistently failed to satisfy their current climate-finance pledges to growing international locations.
Nonetheless, neither the 1992 local weather conference nor the Paris Settlement say who ought to give cash to pay for local weather change loss and injury.
The US and European nations have pressured the necessity to share the burden with wealthier rising economies – particularly singling out China and Gulf states, reminiscent of Saudi Arabia. UK local weather minister Graham Stuart instructed a UN ministerial assembly in September:
“It is going to merely not be doable to ship what is required if we keep trapped in outdated classes from many years in the past and we should escape of this to get a optimistic final result at COP28.”
Developed international locations additionally say that scaling up the fund sufficiently would imply opening it as much as contributions from non-government sources, together with the non-public sector and humanitarian teams. (See: What choices are being thought-about to boost cash for loss and injury?)
Growing international locations aren’t solely against drawing finance from this “mosaic” of funding sources. Nonetheless, as one joint submission by committee members from growing international locations states, they wish to maintain the main focus totally on grant-based finance from developed international locations.
Referencing local weather finance extra broadly, the Saudi Arabian authorities voiced its issues in a press release delivered on the pre-COP occasion in Abu Dhabi and seen by Carbon Temporary. The assertion mentioned Saudi Arabia anticipated “those that have clear obligations to come clean with them and never try to go on the baton to different international locations or entities exterior the method”.
Brazilian diplomat Matheus Bastos, representing the G77 and China, known as for language reflecting the “ideas and provisions” of the UNFCCC and the Paris Settlement.
He mentioned the perform of this might be to make it clear, as these treaties do, that developed international locations are obliged to offer local weather finance. Within the view of the G77, this prolonged to the “full prices incurred” in growing international locations, together with not solely mitigation and adaptation but in addition loss and injury, Bastos added. The US mentioned it might not settle for this textual content.
In the end, the ultimate suggestions wouldn’t oblige developed international locations to pay into the fund. Additionally they point out a “extensive number of sources of funding”.
Developed international locations are requested to “take the lead” in offering start-up finance for the fund, quite than loss-and-damage reduction.
As well as, the really useful textual content “urge[s]” developed international locations to “proceed to offer assist”, whereas different international locations could be topic to a weaker exhortation “enourag[ing]” them to do the identical “on a voluntary foundation”. (That is the factor that the US raised its last-minute objection to because the assembly got here to an in depth.)
The place would the fund be positioned?
One main problem blocking progress was the placement of the loss-and-damage fund.
The US and the EU needed to see the fund hosted by the US-based World Financial institution, a proposal that G77 and China members strongly opposed.
They argued that World Financial institution finance is predicated not on grants however on loans, which aren’t fascinating for debt-burdened international locations within the international south. Additionally they mentioned the financial institution will not be set as much as enable quick, direct entry of the sort required when coping with local weather disasters.
As well as, they mentioned it might not be accountable to all events, because of the dominance of the US – its largest shareholder – and different main donors in decision-making.
Diann Black-Layne, a committee member representing the Alliance of Small Island States (AOSIS) mentioned the World Financial institution would cost a internet hosting price of 17 per cent, which she described as “freeway theft…pure gangster behaviour”:
“[That] signifies that the largest beneficiary of this fund would be the World Financial institution. The ten,000 workers of the World Financial institution will get extra money from this fund than the 63 million folks of the inhabitants of AOSIS international locations.”
(This sum, which others have positioned at 24 per cent, refers to administration prices taken from the fund’s secretariat and is, subsequently, not a portion of the whole cash flowing into the fund. In accordance to the Loss and Injury Collaboration, it might quantity to 1-2 per cent of whole funds.)
A coalition of almost 70 US NGOs wrote an open letter to the US negotiating workforce stating that “the world doesn’t want yet one more channel for worldwide finance that’s donor-driven and unaccountable to communities within the international south”.
The World Financial institution issued a press release pushing again towards such criticism and emphasising that it may very well be versatile in the way it allowed international locations to entry loss-and-damage funds.
(This dispute remembers arguments on the 2009 COP15 local weather talks in Copenhagen. There, the so-called “Danish textual content” – which was by no means adopted – would have “hand[ed] efficient management of local weather change finance to the World Financial institution”, the Guardian reported on the time.)
Growing international locations argued as an alternative for a brand new, unbiased entity working beneath the monetary mechanism of the UN local weather conference itself.
This might be just like the Inexperienced Local weather Fund (GCF), which is overseen by a 24-person board that features an equal variety of developed and growing nation representatives.
After this dispute prevented consensus on the fourth committee assembly, growing international locations got here to the ultimate assembly stating that they might settle for the World Financial institution because the host on an “interim” foundation. Committee members pressured that they have been making a “large concession” in doing so.
Some developed nation members additionally mentioned they needed to see a transparent pathway to maneuver the fund out of the financial institution inside two years.
In the long run, the committee agreed to a textual content that might set up the World Financial institution as an interim host of the fund for 4 years. It included situations reminiscent of permitting communities to entry small grants and offering entry to international locations that aren’t World Financial institution members.
Laura Schäfer, a senior advisor in local weather danger administration at Germanwatch, tells Carbon Temporary that whereas these components are promising, they need to even be “primary situations” for a loss-and-damage fund.
She says there stay issues that the World Financial institution will find yourself being the fund’s everlasting dwelling, a problem that has confronted different funds that have been meant to be housed there briefly:
“There isn’t any exit technique outlined within the textual content, so this mainly means if the World Financial institution performs nicely and fulfils all of the situations set, it is going to be the host even after 4 years.”
One of many key calls for of growing international locations was that, wherever the loss-and-damage fund ended up being primarily based, it might have the standing of a standalone entity beneath the UNFCCC. Nonetheless, civil-society teams mentioned the ultimate language on this within the textual content was unclear.
The GCF, seen by some as a mannequin for the brand new fund, is clearly designated as an “working entity” beneath the UN local weather conference’s monetary mechanism. In contrast, the proposed textual content for the World Financial institution-based loss-and-damage fund describes it solely as being “entrusted with the operation of the monetary mechanism”.
This “considerably murky” language is predicted to face authorized scrutiny within the weeks forward of COP28.
Different points
In an earlier draft textual content launched on the fourth assembly, developing-country committee members disputed a line stating that the fund “doesn’t contain legal responsibility or compensation”.
This has lengthy been a elementary problem for the US, particularly, as a result of it doesn’t wish to be held legally accountable for its excessive historic emissions.
US committee member Chan instructed different members it was “completely unacceptable” that this was seen as “a degree of rivalry”:
“This was a key piece of the understanding that led to the settlement for this agenda merchandise at Sharm el-Sheikh.”
She mentioned that if this textual content was eliminated, “we don’t see a pathway to an final result” on the fund general. This language remained within the last suggestions.
Civil society teams additionally raised issues concerning the removing of language committing to human-rights protections from the ultimate suggestions.
How a lot cash is required to take care of loss and injury?
Growing-country transitional committee members made a submission in September calling for “no less than” US$100bn a 12 months in loss-and-damage funding by 2030.
They cited a UN-commissioned report by the Unbiased Excessive-Degree Skilled Group on Local weather Finance, which says “latest occasions counsel [costs] may very well be as excessive as US$150-300bn by 2030 to deal with instant impacts and for subsequent reconstruction”.
The knowledgeable report additionally emphasises the uncertainty of those figures, including that local weather fashions “seemingly underestimate” loss-and-damage prices in growing international locations.
Certainly, the knowledgeable group’s figures are in the direction of the decrease finish of current estimates. Their report cites different research as inserting the prices of “residual damages” from local weather hazards far larger – as a lot as £290-580bn yearly in growing international locations by 2030.
With this in thoughts, growing nation representatives emphasised {that a} £100bn aim “will not be meant as a ceiling, however quite at the least dedication.”
In contrast, US and EU submissions didn’t again any particular targets.
A draft of the ultimate final result, launched on the fourth assembly in October, included a piece titled “scale”, with the growing international locations’ proposal in sq. brackets, that means it had not but been agreed by all events.
Nonetheless, US committee member Chan mentioned that she wouldn’t settle for such a determine within the doc. “This isn’t a part of our mandate, it’s not half of what’s within the Sharm determination,” she mentioned.
In the end, any reference to the size of funding was scrubbed from the ultimate suggestions.
What choices are being thought-about to boost cash for loss and injury?
One of many transitional committee’s targets was to “take into consideration the panorama of establishments and options related to responding to loss and injury”.
As a part of the deal that emerged from COP27, international locations commissioned the UNFCCC secretariat to overview current loss-and-damage funding and determine “gaps current inside the panorama”.
The secretariat launched a synthesis report summarising its findings in Could 2023, which has fed into the choices made by the committee.
It identifies a wide range of current sources which are related for tackling loss and injury, together with adaptation funds and insurance coverage services.
In the meantime, scientists and civil society teams have proposed different sources for loss-and-damage funds, reminiscent of taxes or levies on fossil fuels and international delivery.
One paper suggests allocating lots of of billions of {dollars} in “local weather reparations” prices to fossil-fuel majors reminiscent of, for instance, Saudi Aramco and ExxonMobil.
Earlier variations of the transitional committee’s suggestions mirrored a wide range of potential sources, once more in sq. brackets. These included non-public entities, NGOs and “particular drawing rights (SDRs), levies, voluntary carbon market or worldwide pricing mechanisms”.
Nonetheless, the query of funding sources is contentious as, broadly talking, growing international locations have tried to maintain the emphasis on grant-based finance from developed international locations.
Developed international locations, in the meantime, say that “revolutionary” new sources have to be explored to boost cash on a adequate scale.
Talking on the fourth committee assembly for the G77 and China, Brazilian diplomat Bastos instructed fellow committee members that they’d “repeatedly requested for deletion” of language round elevating cash for the fund from the voluntary carbon market and different pricing mechanisms.
The ultimate suggestion textual content doesn’t embody a lot element on kinds of funding, however mentions a “extensive number of sources”, in addition to saying it is going to be open to public, non-public and “revolutionary” contributions. It additionally specifies that it needs to be open to receiving funds from philanthropic foundations.
It says the fund’s board will put together a technique to “mobilise new, further, predictable and ample monetary sources from all sources of funding”.
How may international locations declare cash from the loss-and-damage fund?
As with many points of the fund, the query of how international locations may really declare cash after experiencing loss and injury remains to be removed from being answered.
Historically, international locations entry UN local weather funds by submitting prolonged mission proposals in a course of that sometimes takes a number of years.
For the loss-and-damage fund, some international locations are as an alternative calling for a “trigger-based mechanism” to permit them to assert funds instantly within the wake of utmost climate occasions, explains Zoha Shawoo, a scientist engaged on loss and injury on the Stockholm Atmosphere Institute (SEI). She tells Carbon Temporary:
“One thing like that might work if there’s a direct restoration and reduction window. However we all know that developed international locations have been saying that that’s largely coated by humanitarian help, so perhaps the fund ought to focus extra on medium- and long-term restoration.”
There are additionally nonetheless query marks round what kind of losses and damages international locations would have the ability to declare for.
Loss and injury may be attributable to instant local weather impacts, reminiscent of extra intense and frequent excessive climate occasions, in addition to impacts that steadily worsen over time, reminiscent of sea stage rise and the retreat of glaciers.
The research of how local weather change is affecting the probability and severity of utmost climate occasions is called “attribution” science.
Attribution is taking part in an more and more necessary function in proving legal responsibility in local weather court docket instances. For instance, a latest landmark court docket case gained by younger local weather activists in Montana relied closely on attribution science.
This has prompted some to query whether or not attribution may play a task in serving to international locations to make claims from the loss-and-damage fund.
Nonetheless, Shawoo notes it might not be preferable for developed or growing international locations to make use of attribution science in deciding who ought to entry loss-and-damage funding:
“First, developed international locations might not be comfy with being held accountable for explicit losses. However then I believe it may probably even be a burden on growing international locations to must show {that a} sure occasion is because of local weather change. So I don’t assume both facet would need that.”
There nonetheless may very well be a task for attribution science in serving to to offer proof for the claims of growing international locations nevertheless, she provides:
“Fast attribution research may present further proof that growing international locations may use to again up their claims and entry funding. Not a proper requirement, however simply one thing to present them further leverage.”
Thus far, there was little cross-talk between attribution scientists and people concerned within the UN course of for operationalising the loss-and-damage fund, Dr Izidine Pinto, a scientist from the World Climate Attribution initiative, tells Carbon Temporary:
“Proper now we’re separate as a result of nobody is aware of how the loss-and-damage fund goes to work.”
He provides that attribution could solely have the ability to play a restricted function in figuring out how a lot cash international locations ought to have the ability to declare from the loss-and-damage fund:
“Attribution research are only one facet of the coin. Attribution is saying that the quantity of rainfall or warmth was made extra seemingly by local weather change. However vulnerability is the opposite facet of the coin, as a result of the identical quantity of rainfall can destroy a home in area A however not B. So it’s very difficult to only give attention to attribution with out vulnerability and publicity.”
This story was revealed with permission from Carbon Temporary.
