Rethinking global funding for COP28’s ‘loss and damage’ fund beyond 1992 divisions

A global fund under which wealthier nations would help emerging economies cope with climate change should not be based on divisions from three decades ago, an EU climate chief said Monday.

“We cannot base this kind of funding simply on an economic division between developed and developing countries that might have made sense in 1992,” EU commissioner for climate action Wopke Hoekstra told the European Parliament.

He said that “I strongly believe that all who have the ability to pay should indeed do” and would “continue to push for that” as COP28 climate talks are about to start in Dubai next week.

His comments underlined one of the thornier issues of the COP28: the establishment of a “loss and damage” fund for poorer nations.

While the fund is meant to be extended only to nations “particularly vulnerable” to climate change, there are questions about China’s relation to it.

Brussels wants Beijing to contribute to the fund, rather than be a recipient of the loans and grants.

China is the world’s biggest emitter of greenhouse gases today, although the United States leads in terms of per capita and cumulative emissions.

The basis for the COP28 negotiations, aimed at moving the world away from a reliance on carbon-producing fossil fuels, is a United Nations Framework Convention on Climate Change that was adopted in 1992.

In the three decades since then, China’s economy has expanded more than 6,000 percent in yuan terms and is now the biggest in the world after that of the United States.

Hoekstra noted a trip he made last week to China, which “has made tremendous progress in terms of their economic development over the course of the last couple of decades”.

He added: “And with that power, with that affluence, also comes responsibility.”

The European Union itself, Hoekstra said, was on track to bring down its own carbon emissions by 57 percent by 2030, compared to 1990 levels.

The bloc is aiming to be net climate neutral by 2050.

“To say the same about the entire world, we need to peak fossil fuels consumption this decade and phase out unabated fossil fuels well ahead of 2050,” Hoekstra said.

“Frankly speaking, we must quickly decarbonise the global power system,” he added.

The loss and damage fund is meant to deliver $100 billion in aid each year.

While substantial, the promised money is a fraction of the $2 trillion the UN estimates will be needed annually by 2030 to fund efforts to adapt to climate change and related aid for developing countries.