Developed nations' L&D funding proposals threaten progress at COP28, Global South experts warn

Experts from the Global South have expressed concern that developed countries' attempts to narrow the eligibility criteria for receiving loss and damage funding and expand the contributor base may slow down negotiations on the critical issue at COP28.

They also stressed that developing countries must present a united front during COP28 — the annual United Nations climate talks — in Dubai in December to achieve a substantial decision on the matter.

Loss and damage refer to the consequences of climate change that go beyond what people can adapt to.

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The creation of a Loss and Damage Fund (LDF) marked a significant milestone at COP27 in Egypt's Sharm El Sheikh last year and represented the culmination of years of advocacy by climate-vulnerable developing nations. The fund's primary objective is to offer financial support to countries that are highly vulnerable to severe impacts of climate change.

Ministerial consultations held in New York last week on the funding arrangements for loss and damage highlighted stark disagreements between developed and developing nations regarding who should be eligible for the fund and who should contribute to it.

Developed countries are advocating for a restricted definition of "most vulnerable" countries, limiting eligibility primarily to Least Developed Countries and Small Island Developing States. This approach excludes countries such as Pakistan and Libya, which recently suffered substantial climate change-induced damage.

They also assert that all capable nations should contribute, with a focus on major emitters such as India and China.

On the other hand, developing nations argue that the fund should be accessible to all developing countries impacted by climate change, particularly those hosting vulnerable communities. They contend that this aligns with the principles of equity, which ensure that countries' efforts to combat climate change are viewed in the light of their contributions to greenhouse gas emissions, historically and currently.

Experts from the Global South believe these actions indicate developed nations' lack of commitment to operationalising the Loss and Damage Fund at COP28.

They contend that the expansion of the contributor base, the reduction in eligible countries and private sector involvement in loss and damage funding — as advocated by developed nations — undermine the agreement's obligations.

They also say that conditioning the funding on contributor base expansion contradicts existing obligations, which require developed nations to provide finance to developing countries.

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Diego Pacheco, head of the Bolivian delegation and spokesperson of the Like-Minded Developing Countries at the United Nations Framework Convention on Climate Change (UNFCCC), told PTI that any discussion on loss and damage that lacks a connection to the operationalisation of the principles of equity and common-but-differentiated responsibilities "leads nowhere, it is a dialogue of the deaf".

The developed countries are now violating the provisions of both the Convention (UNFCCC) and the Paris Agreement by suggesting that financing should be shifted to countries capable of providing it, "anyone but themselves", he said.

The negotiator said the transitional committee on loss and damage will have to discuss a text that is heavily bracketed by developed countries, reducing the likelihood of reaching a significant decision on the issue at COP28.

"This shows that developed countries do not take multilateral cooperation seriously and that, for them, their climate responsibilities no longer exist. We have reached a time when each country is alone facing the losses and damages of the climate crisis," he said.

RR Rashmi, distinguished fellow and programme director at The Energy and Resources Institute (TERI), expressed concern that developed countries are attempting to divert attention to the sources or countries that will contribute to the fund.

He called this "unfortunate" and anticipates that it will "slow down discussions on loss and damage".

Rashmi suggested that India should insist on consistency with UNFCCC principles of equity and common-but-differentiated responsibilities.

He argued that responsibility lies squarely with developed countries, emphasising that there cannot be two sets of rules — one for general climate finance and another for loss and damage.

T Jayaraman, senior fellow in climate change at the MS Swaminathan Research Foundation, told PTI that the ministerial consultation clearly revealed that developed countries are once again hesitating to make serious commitments.

"The way developed countries are framing it, neither the floods in Libya nor Pakistan would have been considered, which is an untenable situation," he said.

Jayaraman pointed out that recent research demonstrates India and China are not at par with developed countries in terms of contributing to loss and damage. He argued that it is unjustified to ask India to contribute to the fund, given that the country accounts for only four per cent of historical emissions (between 1850 and 2019).

Loss and damage is due to cumulative emissions, he said, adding that the developing countries will have to put up a united front at COP28.

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Climate Action Network-International's Global Policy Lead Indrajit Bose said the loss and damage ministerial reaffirmed the lack of seriousness exhibited by developed countries in operationalising the Loss and Damage Fund at COP28.

"Developed countries are pushing for an expansion of the contributor base, a reduction in the number of countries eligible to receive loss and damage funding and private sector involvement in loss and damage funding," Bose said.

"Conditioning funding for loss and damage on contributor base expansion is a display of bad-faith negotiations. These developed countries have signed both the Convention (UNFCCC) and the Paris Agreement, where the obligation to provide finance is unequivocally directed from developed countries to developing countries," he added.

The climate policy expert recalled that the US referred to loss and damage funding as a "new" concept during the ministerial discussions.

"Given the US' history of exiting multilateral agreements and reneging on commitments, this statement, though unsurprising, suggests that they will obstruct the effective operationalisation of a loss and damage fund," Bose warned.

Concerning the reduction of eligibility, he said it is evident that there are vulnerable developing countries beyond the Small Island Developing States and Least Developed Countries categories.

While developed countries acknowledge this fact, their commitment to establishing a meaningful fund that assists people in developing countries remains questionable, he said.

Bose added the argument that the private sector will transition billions into trillions lacks substantial evidence and may result in increasing the indebtedness of developing countries.

"The private sector's reluctance to invest in adaptation has been a longstanding challenge. The inclusion of the private sector in loss and damage discussions appears to be a delaying tactic. It's high time that developed countries demonstrated a genuine commitment to addressing loss and damage while honouring the decisions made at Sharm el Sheikh (during COP27)," he said.

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