Cop28 'successful from day one' with win on loss and damage fund, IMF chief says

Kristalina Georgieva tells The National that hopes are up for climate action after strong start to summit

Live updates: Follow the latest news on Cop28

Momentum to fight the climate crisis must continue after the UAE's Cop28 scored an early win when nations agreed to put into operation the loss and damage fund and triple global renewable energy capacity by 2030, the International Monetary Fund's managing director has said.

The landmark loss and damage fund, which came into operation after a 30-year wait, and the renewables agreement will help the world to hasten decarbonisation efforts and boost financial commitments to battle climate change, Kristalina Georgieva told The National on Sunday.

Climate-related financial pledges started to pour in during the early days of the Cop28 summit in Dubai, including the UAE's $30 billion fund and the IMF's Resilience and Sustainability Trust that has received pledges for more than $40 billion to accelerate the energy transition.

Cop28 “is very successful from Day 1, it has turned the hopes of everybody here up. Why? Because of the actions that have already been taken”, she said.

“I do hope this will continue in the spirit of 'yes we can fight, successfully, the climate crisis and turn it into an opportunity to transform our economies to low-carbon and climate resilient development'.”

Countries on Thursday agreed to the historic deal of putting into operation the loss and damage fund, which is aimed at helping vulnerable countries to cope with the increasingly expensive and damaging effect of climate disasters.

Loss and damage refers to climate effects that are already happening or are inevitable, such as rising sea levels that threaten to submerge small island nations.

Countries agreed on the principle of a loss and damage fund at Cop27 in Egypt last year, but left several questions open, such as who would pay and who would oversee the payments.

The deal in Dubai means the fund can now come into operation. With some of those questions answered, governments of rich countries have been told to “take the lead” in funding, and the World Bank is envisaged as an initial host.

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  President Sheikh Mohamed and UN Secretary General Antonio Guterres hold a meeting at the Cop28 summit in Dubai. Photo: UAE Presidential Court

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  Participants walk among flagpoles on day four of the Cop28 summit in Dubai. Getty Images

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  Britain's former prime minister Tony Blair at the summit. AP

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  Joseph Vipond from the Canadian Association of Physicians for the Environment crosses the Blue Zone. Getty Images

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  David Miliband, president and chief executive of the International Rescue Committee, addresses a session at Cop28. Getty Images

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  Delegates are photographed in the Blue Zone on the fourth day of Cop28. Pawan Singh / The National

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  Participants walk at Expo City Dubai. EPA

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  Sheikh Abdullah bin Zayed, Minister of Foreign Affairs, Microsoft co-founder Bill Gates, Tanzanian President Samia Hassan and Reem Al Hashimy, Minister of State for International Co-operation, attend the Reaching the Last Mile Forum held alongside Cop28. Reuters

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  Cop28 visitors ride a train in the Green Zone at Expo City Dubai. Pawan Singh / The National

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  Visitors in the Green Zone at Expo City Dubai. Pawan Singh / The National

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  Visitors ride an electric cart in the Green Zone. Pawan Singh / The National

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  Located in the Sustainability District, the Green Zone will host a wide variety of events and workshops until the final day of Cop28 on December 12. Pawan Singh / The National

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  Visitors at the water feature in the Green Zone. Pawan Singh / The National

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  Members of the public ride electric scooters in the Green Zone. Khushnum Bhandari / The National

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  People arrive for the fourth day of the Cop28 summit at Expo City Dubai. EPA

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  A welcome sign at the Cop28 venue. AP

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  People walk through the site near Al Wasl Dome. AP

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  Eleni Myrivili, global chief heat officer at UN Habitat, with former US secretary of state Hillary Clinton and Indian social worker Reema Nanavaty at the Resilience Hub. AP

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  Al Gore, environmentalist and former US vice president, presents the Climate Trace global greenhouse gases emissions database on day four of Cop28. Getty Images

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  Elizabeth Yee and John Kerry, US Special Presidential Envoy for Climate, at a session at the US Centre. AP

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  About 200 countries are taking part in the Cop28 talks. Khushnum Bhandari / The National

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  Pope Francis records a video message to be broadcast during the inauguration of the Faith Pavilion, at Casa Santa Marta, in the Vatican. Reuters

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  Dr Tedros Ghebreyesus, Director General of the World Health Organisation, speaks at the Health Day opening session. Getty Images

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  Attendees arrive at the Cop28 summit. AP

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  The Voice Action hub for peaceful protesters at Cop28, Expo City, Dubai. Khushnum Bhandari / The National

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  The Expo City farm, which will remain in operation after Cop28 ends. Khushnum Bhandari / The National

However, the IMF chief said challenges remained, including putting in place policies to speed up decarbonisation, eliminate fossil fuel subsidies and expand the use of carbon pricing.

“The biggest challenge is to address the policy obstacles for faster decarbonisation,” Ms Georgieva said.

Governments should eliminate fossil fuel subsidies to accelerate decarbonisation goals, she said.

Direct and indirect fossil-fuel subsidies surged to a record $7.1 trillion in 2022 as governments supported consumers and businesses, and higher fuel prices and inflation rates sparked a cost-of-living crisis.

Ms Georgieva also called for wider use of carbon pricing, which creates an incentive for the biggest polluters to decarbonise their operations quickly.

Carbon pricing determines the cost that a company needs to pay for its planet-warming emissions and is considered by the IMF as a cost-effective way to cut such pollution.

The Washington-based lender views carbon pricing as a tool that leads to more government revenue, creates incentives for changes in behaviour and is fair as companies pay for the emissions they produce.

Carbon pricing currently covers close to 25 per cent of emissions, up from 10 per cent a decade ago, according to the IMF.

Average carbon prices are also increasing in areas where they exist, reaching $20 a tonne, but that remains below the target of at least $85 a tonne by 2030.

“We have a long way to go and the private sector would actually welcome a clearer price signal on carbon because then they would know how to structure their investments and we would see a peak of investments as a result,” Ms Georgieva said.

The IMF chief's comments come as top policymakers and business leaders gather in Dubai for the UN's two-week long climate summit, which is scheduled to end on December 12.