COP28: Climate Cash Agreement Signals Historic Win for Poor Countries

In a surprising turn of events at COP28, delegates have made a groundbreaking decision to launch a much-anticipated fund that will provide financial assistance for damage caused by climate-driven storms and droughts in poor countries. Normally, such agreements are reached after days of negotiations, but COP28 president Sultan al-Jaber shook up the conference by bringing the decision to the floor on the first day itself. Immediately, the EU, UK, US, and other nations announced contributions totaling around $400 million to support countries grappling with the devastating impacts of climate change. This deal is expected to provide the necessary momentum for a comprehensive and ambitious agreement on climate action during the summit. The sense of urgency surrounding the summit couldn’t be clearer, as UN chief António Guterres warned of the ongoing “climate collapse in real-time” and the virtual certainty that 2023 will be the hottest year on record. Three decades after the idea of a ‘loss and damage’ cash agreement was introduced, its announcement was met with sustained applause on the conference floor, signaling a significant victory for efforts to address the consequences of climate-related weather events.

The decision to establish a loss and damage fund marks a crucial step towards assisting countries in dealing with the destruction caused by storms and droughts. While funding has been provided in the past to help countries adapt to rising temperatures and mitigate their emissions, this is the first time financial support will be given specifically for climate-induced losses. The concept was initially introduced in the 1990s but faced strong resistance from wealthier nations concerned about potential liabilities for historic carbon emissions. However, at COP27 last year in Egypt, the moral arguments in favor of the fund prevailed, leading to an agreement to establish it. In the months leading up to COP28, countries engaged in discussions regarding the fund’s rules, its location, and the contributions required. An initial agreement was reached before the conference in Dubai, although final approval typically occurs in a plenary session where negotiators meticulously scrutinize the text, often resulting in intense disagreements. Remarkably, COP28 deviated from this pattern, with the motion passing without opposition and delivering what COP28 president Mr. Jaber referred to as a historic moment. Countries wasted no time in pledging funds, with the UAE committing $100 million, Germany making a similar pledge, and the US promising $17 million pending approval from Congress. Notably, the US emphasized that contributing to the fund did not imply acceptance of it being a form of reparations for historical emissions. John Kerry, the US Special Climate Envoy, highlighted the cooperative nature of the fund’s design and emphasized that it does not involve liability or compensation.

The UK also stepped up with a commitment of £60 million to the fund. Climate campaigners cautiously welcomed this move as a positive step in the right direction. However, criticism was directed at the UK government for not providing new money and for the pledge falling short of what is urgently needed. Chiara Liguori, Oxfam’s Senior Climate Justice Policy Advisor, stressed that while encouraging, the UK’s commitment is insufficient to address the scale of loss and damage experienced by vulnerable nations. Nonetheless, the establishment of the fund sets a precedent and highlights the shared responsibility to support countries disproportionately affected by climate change.

This historic agreement serves as a turning point in international efforts to address climate-related losses and damage. By acknowledging the need for financial assistance specifically for the consequences of extreme weather events, COP28 has emphasized the importance of providing support to vulnerable nations grappling with the devastating impacts of climate change. The willingness of major contributors like the EU, UK, and US to provide immediate funding signals their commitment to climate justice and the urgency of addressing climate collapse. However, it is crucial to ensure that these contributions are sufficient and delivered as new money rather than diverting existing development funds. Additionally, ongoing collaboration and active involvement of all countries will be vital to ensure the fund’s effectiveness and equitable distribution. The establishment of this fund lays the foundation for continued progress in global climate action, reinforcing the principle of shared responsibility and providing hope for a more resilient and sustainable future for all nations.