If World Bank does not agree to the terms set at COP28, it could lead to further delays.
The $700 million announced at COP28 is less than 0.2 per cent of the irreversible economic and non-economic losses developing countries are facing from global heating every year. Photo of Khulna district in Bangladesh after Cyclone Amphan: iStock Developed countries have delayed nominating members to the Loss and Damage Board, hampering efforts to fully operationalise the fund to developing countries in time.
At the 27th Conference of Parties to the United Nations Framework Convention on Climate Change (COP27) held in Egypt, Parties reached an agreement on providing loss and damage funding to nations most vulnerable and impacted by the effects of climate change. At COP28, the fund was formally established.
A decision text released at COP28 stated that the fund would be governed and supervised by a board, a decision-making body. It is tasked with setting up a strategic direction for the Fund as well as its governance and operational modalities, policies, frameworks and work programme, including relevant funding decisions.
The Board will comprise 26 members, 12 members from developed countries and 14 from developing nations.
While developing countries have nominated 13 members, developed countries have yet to do so as of February 23, 2024. This could lead to a delay in disbursing money pledged at COP28. Wealthy countries most responsible for the climate crisis have committed to providing over $700 million to the loss and damage fund at COP28.
“The full operationalisation of an adequately financed Loss and Damage Fund is potentially a matter of life or death for millions of people around the world facing the most severe consequences of global warming, such as droughts, floods, rising sea levels, ocean acidification, desertification and loss of livelihoods,” Ann Harrison, climate justice advisor at Amnesty International, said in a press statement.
Harjeet Singh, strategic advisor, Global Partnerships to the Fossil Fuel Non-Proliferation Treaty Initiative, said the delay is possibly due to a disagreement between developed countries on the distribution of seats.
“The European Union (EU) is asking for eight seats as they have pledged more money. They may settle for seven. The United States, which has pledged $17.5 million, is also asking for a seat. But I hear they are close to finalising the members,” he told Down To Earth.
“The major issue between developed countries has remained the availability of seats and the basis of allocation. Countries that have not pledged money to the Fund, have allegedly been refused a seat on the Board,” Tamanna Sengupta, programme officer, Climate Change, Centre for Science and Environment.
She, however, added that it would be important to note which EU countries will have a full seat. “Some such as France and Germany have focused on narrowing the Fund's recipients to ‘particularly vulnerable’ countries,” Sengupta added, highlighting that this could lead to more conflict.
Even if developed countries finalise their nominations to the Board, the first meeting might happen only towards the end of March or April, Singh noted. United Nations, he added, would need 4-6 weeks to organise a meeting as they would have to reach a hosting agreement with a country.
The first meeting was initially scheduled for January 31, 2024, but could not take place as the Board was not fully formed. Sengupta said it remains unclear when the first meeting of the confirmed Board will occur and subsequently how the timeline of the operationalisation of the Fund itself might change.
In the meetings in 2024, the Board is expected to agree on policies and procedures, including allocation of funds. The Board will also have to enter into a hosting arrangement with the World Bank as interim trustee and host of the Fund’s secretariat. “Until these things are done, the money will not be disbursed,” Singh highlighted.
Amnesty International noted that the continuing delay now threatens the entire 2024 timeline set out for the fund, including a June deadline for the World Bank to confirm its willingness to host the Fund under conditions set at COP28.
Last year, developed countries pushed for the World Bank’s hosting of the fund, arguing that it would help ensure its more rapid operationalisation.
Developing nations, however, raised concerns around the working culture of the Bank, its primary role as a lending institution, its donor-driven and shareholder-based interests and its rigid, inflexible policies, according to Climate Analytics. Later, developing countries came on board only after they put forth a set of conditions that need to be adhered to by the World Bank.
If these conditions are agreed upon, the Board will have to ensure that the Bank is meeting those terms. “They will have to carry out periodic assessments,” Sengupta said.
But if the World Bank does not agree, it could lead to further delays. “If this situation arises, the Board is expected to take steps to establish the Loss and Damage Fund as an independent institution. This could push the timeline even further and is worrying,” she explained.
Singh is hopeful that the Fund will get fully operationalised this year. He also called for more pledges from developed countries. The $700 million announced at COP28 is less than 0.2 per cent of the irreversible economic and non-economic losses developing countries are facing from global heating every year, according to the the news publication Guardian.
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