Europe pushes for loss and damage deal ahead of Cop28 to avoid 'ATM' clash

Ministers meeting in New York on Friday will discuss how to financially support countries affected by climate change

Ministers in New York for the UN General Assembly will meet to discuss a loss and damage fund on Friday. Reuters

Frustration is building among western countries, particularly in Europe, as they race to complete negotiations on loss and damage ahead of Cop28 in Dubai in November.

Nearly half of more than $10 billion pledged to the Green Climate Fund comes from France, Germany and Britain. The UN fund finances projects to help developing nations adapt to climate change.

The UK pledged a record $2 billion to the fund on September 11.

But developing countries believe the West should contribute more and compensate them financially for climate change-induced disasters because it is responsible for most historical global CO2 emissions.

At Cop27 in December, vulnerable countries such as Pakistan, where floods killed 1,700 people last year, succeeded in launching a public discussion on a loss and damage fund.

Yet the wording adopted at the time, which called establishing “new funding arrangements”, was vague.

Divergences remain between those who believe that a fund should compensate financial losses and countries that argue it should merely assist in addressing the adverse effects of climate change.

Some EU sources say they feel the fund is being mischaracterised as a “global ATM facility”, meaning any nation that considers itself a developing country could collect the equivalent of damages for climate change.

Now, ministers gathering in New York for the 78th session of the UN General Assembly (UNGA) will try to push for an agreement at a meeting co-chaired by the UAE and Egypt on Friday.

This is seen as the last chance for ministers to prevent the issue overshadowing Cop28, sources at the French Ministry of Energy Transition say.

France and other western nations are trying to convince major developing countries such as China and India that they should also foot the bill for climate-change disasters.

“They are part of the problem and they must also be part of the solution,” said the French ministry source. “It’s not always the same countries that should pay for all climate issues.”

The meeting will be attended by international climate negotiators including the EU's Maros Sefcovic and French Minister of Energy Transition Agnes Pannier-Runacher.

The UN estimates the cost of climate change in developing countries at $70 billion a year, a figure expected to at least double by 2030.

Developed countries are anxious to avoid creating yet another climate fund and argue any such compensation must be incorporated into existing structures.

“This is not just about creating a new fund, it must be part of innovating funding solutions,” said the French source.

A transitional committee set up at Cop27 to discuss introducing a loss and damage fund, has met three times and will convene again next month in Aswan, Egypt.

It is “vital” ministers deliver at Friday’s meeting in New York to ensure the transitional committee concludes its negotiations next month, said the source.

“We don’t want loss and damage to dwarf other big topics like climate adaptation and cutting [carbon dioxide] emissions like they did [at the previous Cop meeting] in Sharm el Sheikh,” the source added.