COP28 in UAE: Developed countries pledge over $420 million to set up loss and damage fund on Day 1

Dubai: The UAE Conference of Parties 28 (COP28) Presidency achieved its first major milestone on Thursday after delivering a historic agreement to operationalise the long-awaited loss and damage fund, which will assist developing countries vulnerable to the adverse effects of climate change.

The UAE made history after the deal on a loss and damage fund for the world’s poorest nations was formally approved on the very first day of the COP28 climate summit. The decision was met with a standing ovation from delegates worldwide, and following the fund’s approval, members took the floor to make pledges to the fund.

The UAE alone said it would commit $100 million to the fund, paving the way for other nations to pledge to the critically important fund. Other countries promising to contribute to the fund included Germany, with $100 million; Britain, with up to 60 million pounds ($75.89 million); the United States, with $17.5 million; Japan, with $10 million; and the European Union (including Germany), with at least EUR 225 million ($245.6 million).

Initially established at COP27 in Egypt, the fund became operational on Thursday, November 30, after parties agreed during five transitional committee meetings. The COP28 Presidency added the fifth meeting in Abu Dhabi to break the deadlock reached at the fourth meeting, where parties found a resolution.

Sheikh Abdullah bin Zayed Al Nahyan, UAE Minister of Foreign Affairs, announced the UAE’s contribution to the fund. “We congratulate all parties on the historic adoption of this fund for climate impact response and announce the UAE’s commitment of $100 million as our contribution. We call on all countries in a position to do so to contribute generously, as an important symbol of solidarity,” Sheikh Abdullah posted on X.

“The COP28 Presidency is committed to delivering outcomes for the climate vulnerable,” said COP28 President Dr Sultan Al Jaber. He added: “What was promised in Sharm El Sheikh has already been delivered in Dubai. The speed at which the world came together to get this fund operationalised within one year since Parties agreed to it in Sharm El Sheikh is unprecedented”.

Running start for UN Climate Conference

Simon Stiell, Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC), said the news on the Loss and Damage Fund gave the UN climate conference a running start. “All governments, and the negotiators must use this momentum to deliver truly ambitious outcomes here in Dubai. We must keep our eyes on the prize, and every minute counts. We need to work and build on what we have seen today, as we work through the 12-13 days that are ahead of us.”

New board, long road

There will be a new board to determine how the Loss and Damage Fund will be utilised, according to Stiell.

He said the formal process of how the fund will be capitalised in a sustainable way moving forward will be a decision by the board that can now be established now that a unanimous decision has been adopted. “So, there's a long road ahead.”

‘Double the target achieved’

The day’s proceedings were a significant win for developing nations. Dr Al Jaber said the threshold set to establish and operationalise the fund was $200 million. “However, we reached over $420 million in the first half. And I know that over the next couple of days, these different heads of state and governments will make many more pledges and commitments over the next couple of days,” he added.

Following the announcement to pledge $100 million, Federal Minister for Economic Cooperation and Development of Germany Svenja Schulze said: “It is a groundbreaking decision of solidarity for the most vulnerable. Your decision enables the quick and effective operationalisation of the new funding arrangements, including a fund. Now, we need to move from words to action.”

She added: “On behalf of German Chancellor Olaf Scholz, like the UAE, the German government stands ready to kickstart the new fund with $100 million. Let’s deliver the same ambition on mitigation and adaptation.”

EU, including Germany, has pledged at least EUR 225 million.

“The EU and several member states are announcing pledges to the fund and the funding arrangements at this COP to accelerate the political momentum during the high-level segment. These pledges will significantly contribute to the fund’s operationalisation and get it up and running; we hope it will create an environment of trust and confidence,” said the delegate from the European Union.

The UK pledged up to 60 million pounds, including 40 million for new funds and a further 20 million pounds for funding arrangements (including early warning systems and disaster risk finance).

The delegate from the UK said: “This is a historic occasion and one that’s been a long time in the making. The UK was honoured to play our part in the transitional committee. We must channel this momentum to the rest of the COP28 as we strive for an ambitious outcome that keeps 1.5 in reach and supports the most vulnerable.”

Loss and Damage are essential even if the world meets climate mitigation goals because a ‘locked-in’ level of warming already impacts particularly vulnerable communities being hit by extreme weather events, such as storms and floods, reduced agricultural productivity, and rising sea levels.

This decisive action on Loss and Damage will enable the Parties to focus on the strongest possible response to the Global Stocktake, the world’s report card on progress toward Paris Agreement goals.

Delegations commit to action

Meanwhile, the United States Special Envoy for Climate, John Kerry, said: “We’re committed to work with our Congress to provide $17.5 million specifically towards the fund for climate impacts response that will help vulnerable countries respond to the impact. We also expect the fund to be up and running quickly; we expect it will help address priority gaps in the current support landscape.”

The regional spokesperson for the US Department of State, Samuel Warburg, has affirmed that negotiations on the fund will be finalised during the first week of the COP28. He also indicated that the United States believes it is time for every country to make national contributions and reach agreements related to the fund.

Japan pledged $10 million, and a delegate said: “We hope that the fund will be operationalised as soon as possible so we can assist developing countries that are particularly vulnerable to the adverse effects of climate change.” The Japanese envoy added, “This fund is about global solidarity and should be supported by various funding sources, including from countries that can do so.”

What is the loss and damage fund?

Developing countries that are particularly vulnerable to the adverse effects of climate change are eligible to receive resources from the fund.

What’s next?

Clear, unprecedented momentum was demonstrated at the start of COP28, according to the presidency. “This momentum provides a clear picture of hope and what we can collectively achieve when we aim for the highest possible ambition,” said a statement from the COP28 Presidency.