Global leaders reach deal on structure for fund compensating developing countries for climate damage

After tense negotiations, global leaders over the weekend set up the operations of a fund to compensate developing countries for the damage they have suffered due to climate change.

The fund itself was established at last year’s global climate summit, despite years of resistance from developed countries. 

However, that agreement left many details unresolved. This weekend, a “transitional committee” made up of several nations came up with a proposal for how to set up the fund. 

In order to go into effect, the agreement will need to be adopted at the global COP28 climate summit that begins later this month. 

Under the proposal, the fund will be hosted by the World Bank on an interim basis. It also “urges” developed countries to provide support for the fund on a voluntary basis. 

The proposal further says that the fund will be governed by a board made up of both developed and developing countries. Decisions will be made by a four-fifths majority.

The board will have 12 members from developed countries, three members from Asia-Pacific countries, three members from African countries, three members from Latin America and the Caribbean, two members from small island developing countries, two from the world’s least developed countries and one member from developing countries that don’t fit into any of those categories. 

An official from the U.S. State Department said they were pleased that the committee was able to reach an agreement on many aspects of the fund. 

However, the official expressed disappointment that the text did not sufficiently stress that contributions to the fund should be purely voluntary.

Others criticized the agreement as unfair to developing countries.

Rachel Cleetus, the policy director and lead economist for the Climate and Energy Program at the Union of Concerned Scientists, said in a written statement that the outcome “reflects richer nations, including the United States, continuing to evade their primary responsibility to contribute to a climate Loss and Damage fund.”

“Wealthy nations also steamrolled developing countries into accepting a lopsided compromise to locate the fund at the World Bank, an institution with a donor-driven lending model and an undemocratic governance structure that raises serious concerns about its ability to host the Loss and Damage Fund,” Cleetus said.