Cop: Agreement on loss and damage fund setup: Update

adds UNFCCC executive secretary quotes

Countries at the UN Cop 28 climate summit agreed today on the setup of a loss and damage fund — to tackle the unavoidable and irreversible effects of climate change — and several pledged financial contributions.

Parties to the UNFCCC — the UN's climate body — agreed to adopt recommendations that were set out by a transitional committee earlier this month. The committee was set up to hash out the details of a fund's operationalisation, or setup, after parties agreed at last year's Cop 27 to establish a fund aimed at helping vulnerable countries address the extreme effects of climate change.

"For the first time a decision has been adopted on day one of any Cop", the summit's president Sultan al-Jaber said. Cop 28 host country, the UAE, committed $100mn for the fund. Germany also pledged $100mn, the US $17.5mn and Japan $10mn. The UK committed £40mn ($50.5mn) to the fund and £20mn for "the funding arrangements, including for early warning systems and disaster risk finance."

UNFCCC executive secretary Simon Stiell said the fact that some donor countries are willing to commit millions moments after the decision was adopted is significant. He added that more countries are likely to pledge money into the fund during the world's leader summit tomorrow. He warned that the "the scale that will be required and the mechanism" for the fund is complex, but that today's contributions are encouraging. "If that approach were to continue, I think it bodes well for rest of the process," Stiell said.

The loss and damage fund falls under the wider theme of climate finance, which is typically expected to be delivered from developed to developing countries. The UAE's contribution is notable, as it is designated under the UNFCCC as a 'Non Annex I' country — developing, rather than developed. The UNFCCC list of developed and developing countries dates from 1992, and the EU has called for it to be updated.

The adoption of the committee's recommendations on the first day of Cop 28 is likely to open the floor to other topics throughout the summit. Loss and damage was the dominant theme at Cop 27, overshadowing other discussions.

Although the recommendations have been agreed, there was some dissatisfaction during the transitional committee's process. The fund will be hosted on an interim basis by the World Bank, and some developing countries had pushed for it to sit within the UNFCCC. Contributions to the fund will be voluntary, and no amount has been agreed.

But today's agreement is "groundbreaking", said Germany's minister for economic co-operation and development Svenja Schulze.

"We invite all countries to make further contributions for this further capitalisation of the new fund responding to loss and damage," she said.

Non-profit World Resources Institute (WRI) applauded today's decision, but its president Ani Dasgupta said "it is disappointing that the US and Japan chipped in so little" given the size of their economies. The WRI and non-governmental organisation ActionAid welcomed the UAE's contribution in particular.

By Madeleine Jenkins, Georgia Gratton and Caroline Varin