Scale and ambition

Loss and damage fund may prove underwhelming

The first major guest at the 28th edition of the Conference of Parties to the United Nations Framework Convention on Climate Change, or COP28, was Prime Minister Narendra Modi. President Joe Biden of the United States is not attending, but various other world leaders, including Italy’s and Britain’s, are present. Mr Modi’s presence is perhaps less attributable to any expected high quality of summit outcomes, and more connected to the close strategic relationship between India and the host country for COP28, the United Arab Emirates. The major work stream at this conference is linked in fact to interim work — which is nonetheless essential thereby. A “global stocktake” will have to be approved to examine how countries are moving along the pathways to their intended nationally determined contributions (NDCs) that they agreed to at the Paris COP in 2015. Depending on the progress on NDCs, and on what climate science reveals about current and future impacts on emissions, it is expected that additional commitments may have to be made.

One major announcement that has emerged out of COP28 already is the launch of a fund for the “loss and damage” caused by climate change. This answers a long-standing demand from vulnerable, smaller, and poorer countries. The plan is for this fund to be given almost half a billion US dollars to spend. But the US’ own commitment will be negligible — perhaps $17.5 million. Most will come from the European Union, which has demonstrated far more commitment to the cause of climate action and to equity than the US. The US’ inability to spend taxpayer money on any major climate-related issues and the uncertainty attached to its political transition in 2024 severely limit what can and cannot be done at the multilateral level. The loss and damage fund itself may prove underwhelming eventually. The problem essentially is that it is hard to quantify such loss and damage and that deciding between various alternative allocations of this money may turn out to be a political and procedural nightmare.
 

The broader question of climate finance, however, is likely to dominate discussions in the remaining days of this COP. Mr Modi, when making India’s net zero commitment for 2070 at the Glasgow COP two years ago, was quite clear that any such commitment could be conditional only on the availability of technology and finance. Financial flows have, however, not been scaled up sufficiently. Driven by activists’ concerns, in fact, financing mitigation — the reduction of emission — has also taken the back seat in political energy to financing the adaptation to climate change or to loss and damage. However, it is necessary that the primary issue for COP remain the scaling up of finance, especially private finance, into activities that ensure that emission does not increase. In this context, at least one major move has been the host nation’s commitment of a $30 billion climate fund that will focus on mobilising seven to eight times that amount in private finance in the next decades. The Prime Minister has offered to host COP33 five years from now, in 2028. By that time the Indian leadership in this field — especially in the raising and efficient disbursement of climate finance — should have been made apparent.