Impasse in L&D Funding: Developed Nations Undermine Equity and Trust in Global Climate Agreement, By Chukwumerije Okereke and Nnaemeka Oruh

The fourth meeting of the Transition Committee for the operationalization of the Loss and Damage Fund in Aswan, Egypt, concluded without clear resolutions on pivotal issues, primarily the domicile of the Loss and Damage Fund, as established during COP27 in Sharm el-Sheikh. From October 17 to 20, 2023, developed countries, spearheaded by the United States, stood their ground, advocating for total control over the fund, designed to benefit developing nations.

Prominent experts, including Harjeet Singh, the Head of Global and Political Strategy at the Climate Action Network (CAN), regarded this stance as deeply disappointing. The insistence of the United States and its allies appears to be an endeavor to assert dominance over developing countries. Their strenuous push for the Loss and Damage Fund to be administered by the World Bank, an institution historically seen by developing countries as favoring developed nations, underscores their primary objective: exercising control on a global scale.

The climate crisis itself was triggered by emissions from developed nations, which they harnessed to advance technologically, securing an advantage in terms of access to finance and technologies required for emission reduction. Given that these emissions exploited global resources, it is only equitable for developed nations to support poorer countries coping with the crisis and enable their sustainable growth.

However, these nations have consistently failed to make the fundamental concessions needed to foster trust in the international climate process and encourage low-carbon development in developing countries. First, they failed to meet the $100 billion annual support commitment agreed upon in 2009 to assist developing countries by 2020. Next, they attempted to disguise high-interest loans as part of their efforts to fulfill this pledge. Now, the obstinate decision to control the Loss and Damage Fund, coupled with onerous conditions, exacerbates the challenges faced by developing countries.

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It is essential to clarify that funding from affluent nations, whether through the Green Climate Fund, Adaptation Fund, or Loss and Damage Fund, should not be perceived as charity. Instead, it represents a share of the enormous profits amassed by developed countries through environmental exploitation. While the term “compensation” is not explicitly employed in UNFCCC texts, it essentially embodies the concept, and the fact that poor countries were willing to remove compensation language from the text demonstrates their willingness to compromise and show goodwill from the Global South.

In the face of the stark realities of climate change and constant reminders from developed nations about the necessity for action, developing countries have committed to pursuing a low-carbon development path, hoping that the nations responsible for Earth’s deterioration would uphold their commitments to provide financial support, as agreed upon, to encourage mitigation, adaptation, and Loss and Damage efforts. However, all they receive in return are empty assurances and hollow promises. It is noteworthy that, as soon as the Ukraine-Russian conflict escalated and energy became a concern in Europe, developing countries, which were urged by developed nations to divest from fossil fuels and transition to net-zero plans, watched in disbelief as Europe rushed to secure gas resources in Africa and revived coal-powered energy industries in Germany.

The Loss and Damage Fund offered a genuine opportunity for developed countries to build trust and prioritize the fund’s intended beneficiaries. Regrettably, they have once again underscored that their interests take precedence over the long-term well-being of the world.

Professor Chukwumerije Okereke is a distinguished academic holding the position of Professor of Global Governance and Public Policy at the University of Bristol, while Nnaemeka Oruh is a Senior Policy Analyst at the Society for Planet and Prosperity in Nigeria.