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Western countries have clashed with Saudi Arabia over the role the kingdom should play in helping to kick-start a UN fund to help poorer countries deal with the loss and damage of climate change.

A last-ditch attempt to agree on the operation of a fund is scheduled over the next two days in Abu Dhabi. There has been wrangling over where it will be based and who should contribute to it ahead of the UN COP28 summit in Dubai.

The decision to create the fund was an important outcome of the COP27 summit in Egypt last year, when leaders of developing countries secured support for “particularly vulnerable” nations.

A failure to establish the fund since then is regarded by many of those nations as setting up COP28 for failure when it convenes on November 30.

COP28 president-designate Sultan al-Jaber said the meetings “must deliver clear, clean, and strong” outcomes. “Billions of people, lives and livelihoods who are vulnerable to the impacts of climate change, depend upon the successful delivery of these recommendations,” he said.

But deep divisions have developed over the structure and which countries should be donors. The US and EU asked Saudi Arabia to be among those to contribute to ensure that the fund has as wide a donor base as possible.

“If you can pay millions to have [the footballer] Cristiano Ronaldo, then you can pay into the fund,” said one western official, reflecting the testy nature of the negotiations following four rounds of meetings.

The US has proposed that the fund receives capital from a broad range of sources, including philanthropies, and that the pool of eligible donor countries is not restricted by metrics such as income per capita, and should be open to any willing donors.

At the same time, the group of developing nations known as the G77 plus China, have called for developed countries to kick-start the fund, or for contributions to be based on metrics such as income per capita or historical emissions, while also welcoming philanthropic donors.

In separate preparatory meetings for COP28 this week, the Saudi delegation said there had been historical “failures on obligations and gaps in action”, referring to the prosperity enjoyed by western nations during the industrial era.

“This is also where we expect those who have clear obligations to own up to them and not attempt to pass on the baton to other countries or entities outside the process,” it said.

Saudi Arabia ranks among the world’s 20 biggest economies and is one of the largest oil and gas producers, but it also counts as a developing nation based on a UN framework that dates back to 1992.

An official close to the negotiations said that western countries had “questioned” the position of relatively wealthy countries such as Saudi Arabia which have so far been shielded by the developing nation status.

Rob Jetten, climate minister of the Netherlands, told the Financial Times that the fund was “paramount to bridge the gap” between nations “with capacity to contribute and those that lack capacity to cope”.

“This means three things: we need to look at which countries have the capacity to contribute today; we need to look out of the box at new sources of financing by opening the fund for other stakeholders . . . such as the private sector. And we need to prioritise access to the fund for [those] less resilient and able to cope with the effects of climate change.”

Negotiators are also debating how to specifically allocate funds among climate-vulnerable countries. The US has proposed a mechanism to protect funds for smaller nations to prevent a “first-come first-served” situation, where large disasters in big countries could deplete it.

The last round of talks to get the fund up and running held two weeks ago foundered on disagreements over whether the World Bank should have a role in hosting it, with its poor experience with bureaucracy being cited.

Developing nations said the US had insisted the fund was based at the World Bank, where it is the largest shareholder. A US official denied the characterisation, saying it was open to establishing a new fund “from scratch”.

This week, two people involved in the discussions said the issue was no longer the biggest stumbling block, after a potential compromise had emerged that would see the Washington-based institution host the fund under an independent board.

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