by Abdul Waheed Bhutto 3 November 2023
As the United Nations climate negotiations in Dubai draw near, an impasse has emerged among Global South countries over the establishment of a fund aimed at assisting nations in recovering from the damage caused by climate change. The committee, composed of two dozen nations tasked with shaping the “loss and damage” fund, recently concluded their meeting in Aswan, Egypt, marked by substantial disagreements. These disputes revolve around critical questions: who should oversee the fund, the source of funding, and the criteria for accessing these essential resources.
A central point of contention in the impasse is the historical responsibility for carbon dioxide emissions. When examining the records of emissions from 1850 to 2021, encompassing both land use and fossil fuel emissions, it becomes evident that the United States bears the primary responsibility. The United States is responsible for over 509 gigatonnes of historical emissions, accounting for approximately 20% of global historical emissions. China closely follows with an 11% share, while Russia maintains a 7% position. Brazil and Indonesia secure the fourth and fifth rankings, each contributing 5% and 4%, respectively. Germany and the UK, alongside other post-colonial European nations, collectively contribute 4% and 3% to global cumulative emissions, excluding emissions during the colonial era.
These statistics underscore the significant role played by developed nations in historical emissions, which are a major driver of climate change. These emissions have disproportionately affected economically disadvantaged nations, which are often the least equipped to cope with the consequences of climate change. Global South contends that historical responsibility should play a key role in shaping the allocation of climate finance.
The “loss and damage” fund, established during the 27th Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC) held in Sharm el-Sheikh, Egypt, last year, marked a historic milestone. It was designed to address the irreversible damage caused by climate change, including events such as droughts, floods, and rising sea levels. However, leaders from the Global South express their deep disappointment, believing that the fund falls short of their expectations. They emphasize that affluent nations should ensure that these countries are not forced to choose between combating climate change and enhancing the well-being of their populations.
The Global South leaders argue that addressing the profound impacts of climate change is imperative for their countries’ survival and development. They assert that the international community should consider temporarily suspending their debts to create space for investments in resilience and sustainable development. This stance highlights the urgent need for more equitable climate finance arrangements.
Amidst this backdrop, a significant divide emerges between developed and developing nations. A contentious issue revolves around the potential host for the fund. The United States and developed countries advocate for the World Bank to assume this role. They argue that the World Bank, with its experience and resources, is well-suited to manage the fund efficiently and effectively.
On the other side, the Global South is firmly against the idea of the World Bank overseeing the Climate Fund. They contend that the World Bank has a track record of endorsing policies that prioritize the interests of developed nations and multinational corporations, often at the expense of environmental concerns and the welfare of marginalized populations. They argue that the World Bank may perpetuate the existing power imbalances in climate finance.
Developing countries are pushing for the creation of a new United Nations entity to oversee the fund. They assert this position based on their concern that placing the fund under the purview of the World Bank, an institution influenced by the United States, would result in an undue level of control by donor nations and increased financial burdens on recipient countries. The Global South advocates for an entity that would prioritize their needs and aspirations while ensuring transparency and inclusivity in the management of climate finance.
The Global South’s advocacy for an independent UN entity is rooted in the quest for a more equitable and inclusive approach to climate finance. They believe that this approach aligns with their broader vision of steering the global economy toward robust, sustainable, equitable, and inclusive growth. This vision encompasses climate justice, where historical responsibility and the capacity to adapt are integral components.
While the question of hosting the fund is central to the deadlock, unresolved issues extend to the fund’s primary focus and the contributors to the fund. The United States and the European Union, for instance, have different priorities regarding the fund’s objectives, adding to the complexity of the discussions. Additionally, the question of which countries should contribute to the fund remains a point of contention.
Global South nations, represented by the G77 and China, are staunch advocates of establishing an independent entity to manage the fund. They consider this as a cornerstone of their position. The creation of this new entity is a pivotal aspect of their stance.
In response to these criticisms, the World Bank has expressed its commitment to cooperating with countries once a consensus is reached on the structure of the fund. Nevertheless, the debate surrounding the fund’s hosting remains a contentious issue and holds the potential to significantly impact the efficacy and inclusivity of climate finance.
These deliberations are taking place against the backdrop of the approaching COP28 negotiations. Failing to address the concerns of developing nations regarding funding for loss and damage could risk derailing these crucial negotiations. The outcome of these discussions will not only shape the fund’s structure but will also set the tone for the upcoming climate negotiations, underscoring the significance of an inclusive and equitable approach that accommodates the perspectives and needs of the Global South.
In summary, the impasse over the “loss and damage” fund highlights the imperative of inclusivity and equity in climate finance. The historical responsibility for emissions, the urgency of addressing climate impacts, and the need for an equitable approach all converge in the ongoing debate. As the world grapples with the climate crisis, resolving these issues is not just about financial mechanisms; it is about justice and solidarity in the face of a global challenge.