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“Lasting Legacy,” a song that follows the 1985 hit song “We Are the World,” which sold over 20 million copies worldwide, was performed at the United Nations Climate Change Conference (COP28) held in Dubai. Released. The official charity anthem features 13 of his artists from around the world singing about unity, cooperation and climate action.
One of the legacies of COP28 that should be commemorated in song is the creation of the Loss and Damage Fund. This new multilateral financial channel will help developing countries facing rising costs from storms, heat waves, floods, landslides, wildfires, droughts, sea level rise, biodiversity loss and desertification. The purpose is that. These negative effects of global warming are causing hundreds of billions of dollars in damages each year.
However, contributions to the Loss and Damage Fund are currently well below the target. At COP28, donors, led by France, Germany, Italy, the United Arab Emirates, and the United Kingdom, pledged about $700 million, far short of the amount needed to meet the challenge.
Nevertheless, the UAE’s commitment is a welcome departure from the widely held view that only countries that bear historical responsibility for climate change should compensate for loss and damage. This shows the world today that everyone must take responsibility for the state of the planet and its climate, and at the same time emphasizes the importance of multilateral cooperation, especially strong intergovernmental cooperation. Masu.
Indeed, billions of dollars have already been invested in climate change mitigation and adaptation through the multilateral system. Almost all international financial institutions have facilities dedicated to this purpose. For example, the International Monetary Fund has a Resilience and Sustainability Trust, which has received commitments of at least US$41.1 billion as of November 2023.
The United Nations, on the other hand, has several funds, including the Central Emergency Response Fund, which spent about US$2.2 billion on efforts to mitigate the effects of climate change from 2006 to 2022, and national pooled funds. The United Nations Framework Convention on Climate Change Synthesis Report on Loss and Damage (co-authored by one of us) identifies approximately 45 funding windows dedicated to disaster preparedness, 13 of which are focused on emergency response. It is placed.
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The New Global Financial Agreement Summit convened by French President Emmanuel Macron last year and the Bridgetown Initiative led by Barbados Prime Minister Mia Amor Mottley offer a number of starting points and proposals for redesigning the global financial system. There is.
This raises the question of where loss and damage funds fit into this crowded and complex landscape. It is true that the need for funds remains high and significant shortfalls remain, with the lack of grant funds for recovery and reconstruction being particularly worrying.
It is also important to expand climate risk insurance coverage and facilitate debt exchanges (and deferrals) to create more fiscal space as global interest rates soar. On the other hand, a new fund, especially if underfunded, risks becoming yet another futile attempt to repair a multilateral system that is outdated and unfit for purpose.
To avoid such an outcome, loss and damage funds need to move away from a project-based model of contributing small sums of money. Given the scale of the challenge and the intensity of human suffering, the Fund should instead adopt structural and policy innovations that help establish a new generation of multilateral organizations.
The New Global Financial Agreement Summit convened by French President Emmanuel Macron last year and the Bridgetown Initiative led by Barbados Prime Minister Mia Amor Mottley offer a number of starting points and proposals for redesigning the global financial system. There is.
More specifically, the Loss and Damage Fund will help countries more effectively mobilize domestic resources to mitigate and adapt to climate change, and will help countries use global financial markets and multilateral financing on fair terms, as well as various forms of financing. New templates could be created to help people access debt relief. The Fund could also design a global insurance system for the most vulnerable households and small businesses.
In today’s fragmented world, loss and damage funds can easily derail. However, it is in our common interest to help the countries most vulnerable to climate change recover and rebuild in a way that does not undermine the development gains achieved over the past decades. Providing these countries with sufficient financial and other resources will ensure stability for all of us.
Monique Barbu, former CEO of the Global Environment Facility, is the French President’s Special Envoy for the Global Climate and Environment Agenda. Robert R. Philip, Chairman of the Board of the Innovative Finance Foundation, is a co-author of the United Nations Framework Convention on Climate Change (UNFCCC) Synthesis Report on Loss and Damage.
© Project Syndicate 1995–2024
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