Wealthy countries might finally pay for the climate change they caused.
Today, on the opening day of COP28, the United Nations climate summit in Dubai, the host country pushed through a decision that wasn’t expected to happen until the last possible minute of the two-week gathering: the creation and structure of the “loss and damage” fund, which will source money from developed countries to help pay for climate damages in developing ones. For the first time, the world has a system in place for climate reparations.
The fund has been a goal of developing nations for years; its aim is to get financial support for the countries that suffer the brunt of climate-change disasters despite having had little part in causing them. Nearly every country on Earth has now adopted the fund, though the text is not technically final until the end of the conference, officially slated for December 12.
“We have delivered history today—the first time a decision has been adopted on day one of any COP,” the president of COP28, Sultan al-Jaber, said. (Al-Jaber, who is also the head of the United Arab Emirates’ state oil firm, has been under fire for reports that the UAE intended to use his office to further oil and gas deals at the gathering, which he denies.)
For years, wealthy nations rejected the notion that they should help defray the costs of climate disasters in poor countries, despite being responsible for the bulk of the climate warming that caused them. Although countries squeaked through an agreement on the existence of the fund at COP27 last year, the fund’s mechanics were still up for debate. Some developed countries were more obstinate on its finer points than others. Over much opposition from developing countries, the U.S. has insisted that the fund (technically named the Climate Impact and Response Fund) will be housed at the World Bank, where the U.S. holds a majority stake; every World Bank president has been a U.S. citizen. The U.S. also insisted that contributing to the fund not be obligatory. Sue Biniaz, the deputy special envoy for climate at the State Department, said earlier this year that she “violently opposes” arguments that developed countries have a legal obligation under the UN framework to pay into the fund.
The text agreed upon in Dubai on Thursday appears to strike a delicate balance: The fund will indeed be housed at the World Bank, at least for four years, but it will be run according to direction provided at the UN climate gatherings each year, and managed by a board where developed nations are designated fewer than half the seats. That board’s decisions will supersede those of the World Bank “where appropriate.” Small island nations, which are threatened by extinction because of sea-level rise, will have dedicated seats. Countries that are not members of the World Bank will still be able to access the fund.
For its part, the U.S. remains adamant that the fund does not amount to compensation for past emissions, and it rejects any whiff of suggestions that it is liable for other countries’ climate damages. Even the name “loss and damage,” with its implication of both harm and culpability, has been contentious among delegates; before al-Jaber gaveled the decision through on Thursday, he noted that the board to be convened to administer the fund will take up the issue of the name.
The Alliance of Small Island States, an important negotiating bloc at COP, welcomed the decision. Fatumanava-o-Upolu III Dr Pa’olelei Luteru, the permanent representative of Samoa to the UN and the chair of the alliance, was enthusiastic but measured. In a statement to me, he said that “we look forward to finally putting words into action, and delivering on this commitment we made to help the people who suffer most from a crisis they did not cause.”
“After the gavel drops at COP28, we cannot rest until this fund is adequately financed and starts to actually alleviate the burden of vulnerable communities,” he added.
This year, the mood at the negotiating table was all but guaranteed to be urgent after a spring and summer in which climate disasters were too extreme and frequent to pass off as normal. Temperatures soared beyond 104 degrees Fahrenheit in India, Bangladesh, Thailand, and Laos, in a stretch of record-breaking heat that would have been all but impossible without global warming. The American South and Mexico suffered under severe heat waves made five times more likely by climate change. Extreme drought made 100 times more likely by climate change devastated several East African nations. Europe sustained a devastating fire season, and dry conditions are fueling wildfires in the Amazon rainforest. Catastrophic flooding in Libya, the Democratic Republic of Congo, and Rwanda killed more than 10,000 people this year.
The differences in how each of these regions recovers from these events, of course, come down to money. And as of today, some of the important mechanics of where the money will come from, and who can get it, are finally clear. Several countries immediately announced their intended contribution to the fund. The United Arab Emirates and Germany each said they would give $100 million. The U.K. pledged more than$50 million, and Japan committed to $10 million. The U.S. said it would provide $17.5 million, a small number given its responsibility for the largest historical share of global emissions.
Total commitments came in on the order of hundreds of millions, far shy of an earlier goal of $100 billion a year. Other donations may continue to trickle in. But the sum is paltry considering researchers recently concluded that 55 climate-vulnerable countries have incurred $525 billion in climate-related losses from 2000 to 2019, depriving them of 20 percent of the wealth they would otherwise have. Still, it’s a big change in how climate catastrophe is treated by developed nations. For the first time, the countries most responsible for climate change are collectively, formally claiming some of that responsibility. Perhaps this shift in consciousness will open the door to changes in other areas of moral statehood, like what responsibility wealthy countries have toward climate refugees.
One crucial unresolved variable is whether countries such as China and Saudi Arabia—still not treated as “developed” nations under the original UN climate framework—will acknowledge their now-outsize role in worsening climate change by contributing to the fund. China is currently responsible for a huge chunk of annual global emissions—nearly 30 percent in 2019, exceeding the total emissions of every developed nation combined. Saudi Arabia, a petrostate, exports (and therefore profits from) a large share of the raw material that drives global warming.
Another big question now will be whether the U.S. can get Congress to agree to payments to the fund, something congressional Republicans are likely to oppose. Senator Sheldon Whitehouse of Rhode Island, a Democrat, pointed out to me what he sees as the hypocrisy at the core of U.S. international climate finance in a call earlier this week: Influence by oil and gas industry interests—arguably the entities truly responsible for driving climate change—now delays even public funding of global climate initiatives, he said. “The fossil-fuel industry has successfully convinced the world that loss and damage is something the taxpayer should pay for.” And yet, Whitehouse told me that the industry lobbies against efforts to use public funding this way, swaying Congress and therefore hobbling the U.S.’s ability to uphold even its meager contributions to international climate funding.
Whitehouse plans to travel to Dubai in the coming days to, among other things, push the idea that the oil and gas industries, and not just the taxpayers of wealthy nations, should be liable for climate-reparation payments. “It is their damn mess, after all,” he said on Tuesday. “And convincing the world that governments need to clean up their mess is something they’ve been very good at for a long time.”
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