New Delhi:

Despite developing nations making a compromise offer to locate the climate loss and damage fund in the World Bank for an intermediate period, as suggested by rich nations, talks on funding faltered on Saturday.

Wealthy nations remained non-committal on being the main contributors to the fund and said they will not accept references to liability, equity and common but differentiated responsibility in the funding facility text, according to observers who declined to be named.

Developing countries have indicated that they were agreeable to locating the fund in the World Bank for a predetermined interim period, following which it will become an independent entity, a significant change from their earlier position and one that could accelerate the creation of the fund, HT reported on Saturday.

The operationalising of the funding facility was discussed at the fifth meeting of the transitional committee being held in Abu Dhabi on Friday. The fourth meeting in Aswan last month ended without a clear consensus on operationalising the fund, exposing a deep trust deficit between rich and emerging economies over historic responsibility, climate reparations and making money available for compensation, HT reported on October 26.

The host of the 28th Conference of Parties (COP28) to the United Nations Framework Convention on Climate Change, the United Arab Emirates, offered to host a fifth meeting to resolve differences among rich and developing countries on November 3-4. But no headway could be made.

The final text was adopted very late on Saturday night by the Transitional Committee on Loss and Damage. But US and developing countries also had several objections to the text. US wanted to withdraw support to the text because it insisted that the text should make it clear that contributions to the fund are voluntary. Developing countries said the funding arrangements are very weak and take away from the historical responsibility of rich nations. The committee however said a quorum had been reached so the text will be forwarded for further discussion at COP28.

The Committee agreed on a recommended approach to operationalize the fund and funding arrangements for Loss and Damage, which the 198 Parties will consider and hopefully adopt at COP28, the UAE said.

“I welcome the agreement reached today in Abu Dhabi by the Transitional Committee. This clear and strong recommendation to operationalize the Loss and Damage Fund and funding arrangements, paves the way for agreement at COP28. Billions of people, lives and livelihoods who are vulnerable to the effects of climate change depend upon the adoption of this recommended approach at COP28,” said Sultan Al Jaber, COP28 President in a statement.

On early Saturday, developed nations had refrained from any reference to them being primary donors to the fund. “The Fund may receive contributions from a wide variety of sources of funding, including grants and concessional loans from public, private and innovative sources, as appropriate,” the draft text on the facility said.

“Outrageous!! The current text governing the #LossAndDamage Fund is both meaningless and inadequate. If left unchanged, it threatens to diminish the Fund to mere millions — a drop in the ocean compared to the hundreds of billions of dollars needed annually,” Harjeet Singh, head of global political strategy for Climate Action Network International posted on X (formerly Twitter).

“This dire shortfall would ultimately abandon vulnerable communities and nations to fend for themselves against the relentless tide of climate impacts,” Singh posted. “Wealthy countries are shirking any responsibility to provide L&D finance.”

Contrary to what has been proposed in the current loss and damage facility text, the 2021 Glasgow climate pact had urged “developed country Parties, the operating entities of the Financial Mechanism, United Nations entities and intergovernmental organizations and other bilateral and multilateral institutions, including non-governmental organizations and private sources, to provide enhanced and additional support for activities addressing loss and damage (due to climate change).”

“We have recognised, understood and accommodated the challenges that individual countries and groups of countries face. We have accepted that this process is not about compensation and liability. We have accepted a World Bank interim instead of a stand alone fund,” said Avinash Persaud, an economist from Barbados.

“We have accepted convoluted safeguards on eligibility and allocation. But there comes a point when you retreat so far that nothing is left behind you,” Persaud said. “To accept this language on sources of funding would be to give credibility to a dangerous retreat of multilateralism that will unravel efforts on mitigation and adaptation,” he added.

“The current #TC5 text, in which the countries that have caused the climate crisis have no particular obligation to pay into the L&D Fund, is a logical extension of the history of US engagement at the #UNFCCC, which has always been about escaping responsibility over all else,” posted Brandon Wu, director of policy and campaigns at ActionAid USA.