Developed Countries Hold Up Negotiations On Loss And Damage Fund As Stalemate On Location Of The Fund Undermines Trust
Aswan, Egypt: Negotiations by countries at the fourth and final meeting of the UN Transitional Committee on Loss and Damage, here today in Aswan, Egypt, are deadlocked over key differences.
The Transitional Committee mandated with designing the new Loss and Damage Fund has only a day remaining to formally conclude the talks. Countries remain divergent on fundamental issues to operationalize the Loss and Damage fund. These include issues around location, governance arrangements of the fund, sources of funding and eligibility issues, among others.
Developed countries, led by the United States, have insisted that the new Loss and Damage Fund should be set up under the World Bank as a hosted financial intermediary fund (FIF). Under such an arrangement, the World Bank would set up the Secretariat and provide related Secretariat services for the new fund against a fee and following the conclusion of a negotiated agreement.
Given the tightening of guidelines in recent years (2019 and 2022), the Loss and Damage Fund would operate under different arrangements than those of the Adaptation Fund and the Global Environment Facility (GEF). This has raised serious concerns about restricted access to and the legal independence, flexibility and decision-making power of the new fund.
Ambassador Pedro L. Pedroso Cuesta, Chair of the Group of the 77 and China, briefed the media today
He expressed concerns about the inability of a fund under the World Bank to provide legal independence, legal personality, accountability to the Conference of Parties (COP) and CMA processes, and respond with speed to emergency events.