After nearly a year of talks, government negotiators on Saturday struck a tentative deal on what a new fund for climate victims will look like.
But although they grudgingly agreed on what to recommend to Cop28, members of the loss and damage transitional committee warned that their bosses may want to reject this advice and re-hash debates in Dubai.
At Cop27 climate talks in Egypt last year, governments agreed to set up a loss and damage fund to channel money to those suffering from destruction caused by climate change. They tasked a 24-member transitional committee to work out the details this year and report back to Cop28.
After five gruelling meetings, that committee completed what co-chair Outi Honkatukia described as “mission impossible” on Saturday night at a five-star hotel in Abu Dhabi.
Developing countries conceded to let the World Bank host the new fund on a temporary basis, with a view to making it independent later. They had reservations about high costs and the US’ ideological influence on the World Bank.
The US, on the other hand, made limited headway in broadening the pool of donors expected to contribute.
US negotiator Christina Chan expressed the most unhappiness.
Her last-minute requests to weaken developed countries responsibility to pay into the fund were rejected by the committee’s co-chairs, who said it was a “take it or leave it” text as there was no time left to negotiate.
Although the meetings cameras did not pick this up, developing countries lead negotiator Pedro Luis Pedroso Cuesta claimed that Chan left the room as co-chairs were about to finalise agreement. “Leaving the room was meant to [paralyse] the committee,” Cuesta said.
But, hearing no objections, co-chair Outi Honkatukia banged her gavel to signal agreement. As negotiators applaud, the meeting room’s camera showed Chan walking across the room back to her seat.
A few minutes later, she said that she had objected to the text a couple of times.”If this is consensus-based, I’m not sure why there is now a decision,” she said.
On the other side of the debate, Egyptian negotiator Mohammed Nasr said he was “not happy with the text” but would accept it for now.
He added: “Once we are at the Cop, there will be discussions around the document… we have several reservations that we have highlighted.”
Bouncing her crying baby up and down, Armenia’s deputy environment minister Gayane Gabrielyan asked: “Is it we who will be the final decision-makers?”
She added: “I don’t think so. We are going to Cop. We are going to big bosses with our suggestions.”
A major split was that developing countries wanted more emphasis on the group of countries the UN classified in 1992 as developed being responsible for paying into the fund.
These developed countries wanted to broaden out responsibility to wealthier countries still classified as developing, like Singapore, Qatar and Saudi Arabia.
They compromised on an agreement which "urges" developed countries "to continue to provide support" but only "encourage[s]" other countries to provide support.
It "invites financial contributions with developed country Parties continuing to take the lead to provide financial resources" for setting up the fund.
Celebrating the agreement, the EU's lead climate negotiator Wopke Hoeskstra posted on X that "all parties can contribute to it - and I believe that all who have the ability to should do so".
This evening, EU negotiators in Abu Dhabi reached an important agreement with global partners on #lossanddamage.
The world will get a fund focused on support for the most vulnerable. All parties can contribute to it - and I believe that all who have the ability to should do so.
— Wopke Hoekstra (@WBHoekstra) November 4, 2023
The negotiators agreed there will be a fundraising round for the fund every four years, like there is for the UN's Green Climate Fund. But donors can give money at any time.
Money can come from the private sector or from innovative sources, which aren't specified but could include taxes on fossil fuels, shares or airplane tickets.
Developed and developing countries were split on who should be able to receive money from the fund, after governments at Cop27 agreed it should be restricted to developing countries which are "particularly vulnerable".
Developing countries argued they are all particularly vulnerable. But developed nations wanted to restrict funding to small island developing states (Sids) and the world's least developed countries (LDCs).
They settled on just repeating similar language to Cop27 that "developing countries that are particulaly vulnerable" to climate change are eligible. There is no agreed definition of vulnerability.
They agreed that all developing countries should be able to access the fund's resources when that is "consistent with policies and procedures" that the fund's board establish in the future.
The board will have a majority of developing country representatives, despite a US push to weight it towards developed ones.
Developed countries wanted to set up sub-funds, so they could finance their preferred areas like support for small islands, climate-driven migration or slow onset events like sea level rise.
But developing countries succesfully opposed this, arguing that the fund's board not the wealthy donor countries should decide where the money goes.
There will be a minimum floor for the percentage of money that goes to Sids and LDCs.
The EU's lead negotiator Wopke Hoekstra posted that the fund will be "focused on support for the most vulnerable".
The US and other developed countries wanted the fund to be hosted by the World Bank.
This would mean it would be based at the bank's headquarters in Washington DC and its staff will be employees of the bank.
Developing countries resisted this, accusing the bank of charging high hosting fees, a weak climate record and compromising its fund's independence.
The bank's head is chosen by its biggest shareholder, the US government. Opposing the bank as host, developing countries lead negotiator Pedro Luis Pedroso Cuesta said last month: "We know the history. We know the politics. We know the manipulation."
They compromised on making the bank the interim host for four years, with a number of assurances that the fund will become independent.
Celebrating the agreement, Cop28 president Sultan Al Jaber said in a statement that the committee had "broken deadlocks and found common ground to deliver clear recommendations".
He added: "Parties must seal the deal in Dubai... billions of people, lives and livelihoods who are vulnerable to the effects of climate change depend upon the adoption of this recommended approach at Cop28."