World Bank to host new climate disaster fund for affected nations

In an effort to combat climate-related challenges facing poor nations, countries have taken a significant step forward. On Saturday, November 4, discussions about setting up a critical fund aimed to aid such states, made headway despite concerns from the US and various developing nations. 

Overcoming Barriers to The “Loss and Damage” Fund 

Last year, at the UN climate talks held in Egypt, a deal was reached to establish a “loss and damage” fund for developing nations. The accord, praised as a milestone, successfully overcame years of opposition by affluent countries. Nevertheless, defining specifics like fund contributors and location has proven difficult, causing a deadlock just 11 months later. 

A UN committee was given the task to iron out these details during their fifth meeting in Abu Dhabi this week. The objective is to finalize these recommendations before the annual climate summit, COP28, taking place in Dubai in less than a month, with the aspiration of launching the fund by 2024. 

Role of the World Bank and Fund Distribution 

The committee, representing countries from various geographical backgrounds, decided to propose the World Bank as the fund’s trustee and host. This suggestion, however, has been a bone of contention between developed and developing nations. Critics argue that having The World Bank – whose presidents are appointed by the US – host the fund could give donor countries undue influence and impose high fees on recipient nations. 

In an attempt to satisfy all parties, an agreement was made for the World Bank to serve as a temporary trustee and host for the first four years. Jennifer Morgan, Germany’s climate envoy, not only endorsed this move but also expressed Germany’s readiness to contribute to the fund and explore more financial sources. 

A Call for Continued Support 

The road to the fund’s establishment has not been smooth. In fact, Harjeet Singh, head of global political strategy at nonprofit Climate Action Network International, pointed out the seeming indifference of wealthy nations towards underprivileged communities. His words support the committee’s recommendation for developed nations to maintain their support for the fund. 

However, the issue of whether these wealthier nations should be obligated to contribute financially remained unresolved. A US State Department official expressed disappointment about the lack of consensus on the donation’s voluntary nature, signaling the US’s protest against the committee’s denial to clarify this point. 

Sultan Al-Jaber, the upcoming COP28 summit’s president, however, welcomed the committee’s work. He was optimistic that these recommendations could serve as a stepping stone towards an agreement at COP28.

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