Published 9 June 2023 in News
On June 22 and 23, 2023, a Summit for a New Global Financing Pact will be held in Paris, organized by France. Many leaders from States, governments, international organizations, civil society and the private sector will be invited to discuss solutions for financing global development and the climate transition.
In order to decipher the stakes of this Summit, Focus 2030 aims to gather and highlight the point of view of organizations that are expert in their respective fields and is conducting a series of interviews with representatives of governments, international organizations, NGOs, think tanks, and others.
Discover our Special Edition about the Summit for a New Global Financing Pact and all the interviews with experts conducted ahead of the Summit.
Written interview received on June 4, 2023.
Focus 2030 : The establishment of a fund dedicated to loss and damage was decided at the COP27 in Sharm-el-Sheikh in November 2022. This fund should become operational at the next COP (COP28) and the details of its functioning, such as its sources of financing and the countries that will benefit from it, have yet to be defined. Could you provide us with more information on the negotiations currently underway on this subject ?
Hyacinthe Niyitegeka : Following the establishment of the Loss and Damage Fund and funding arrangements at COP 27, as well as the mandate of the Transitional Committee (TC) to undertake work intersessionally and make recommendations to COP 28 for the operationalization of the funding arrangements and fund, the next step is to see a decision on the operationalization of the funding arrangements and fund at COP 28.
With work being carried out by the TC, loss and damage finance will not be considered under a separate agenda item at the June Bonn Climate Conference (SB 58). However, following the improvement of the Glasgow Dialogue resolution at COP 27, the work of the TC will be informed by the second Glasgow Dialogue. The second Glasgow Dialogue at SB 58 will focus on the operationalization of the new funding arrangements for responding to loss and damage and the Loss and Damage Fund, as well as on maximizing support from existing funding arrangements relevant for responding to economic and non-economic losses, slow-onset events, and extreme weather events, among other things.
Focus 2030 : What are the financial requirements for the loss and damage fund, and how could these resources be mobilized ?
Hyacinthe Niyitegeka : Included in the recent report by the authors from Heinrich - Böll - Stiftung US and Loss and Damage Collaboration, mid-point modeling suggests that loss and damage in developing countries will cost $425 billion a year in the 2020s and $671 billion in the 2030s. A minimum floor of $400 billion a year has been suggested for loss and damage finance. This suggested quantum would be made up of developed country contributions and fair and equitable alternative sources such as a tax on the fossil fuel industry, a climate damages tax, or on frequent flyers, or on international shipping - a currently untaxed sector. An overall target, aligned with the minimum floor of $400 billion a year, for loss and damage should be enshrined as a sub-goal in the New Collective Quantified Goal, which is currently being negotiated and will supersede the US$100 billion per year climate finance commitment set in 2009 at COP 15.
Noting that this original goal was unrelated to needs and based solely on political feasibility and was wholly inadequate, much improvement is required !
Focus 2030 : The Summit for a New Global Financing Pact, scheduled for June 22-23 in Paris, will focus on mobilizing new financing for the climate transition of the most vulnerable countries. What progress can we expect from this Summit regarding loss and damage ? What decisions, deliverables or “action coalitions” do you think would be effective in moving this agenda forward ?
Hyacinthe Niyitegeka : The Summit for a New Global Financing Pact should recognise the urgency of addressing loss and damage and its reality in developing countries. The participants of the Summit must advance discussions on the alternative sources of finance to address loss and damage, such as taxes on fossil fuels, fossil fuel levies, international maritime levies and global wealth taxes.
They should also amplify the call from the Climate Vulnerable Forum and other vulnerable developing country groups and Parties to develop a regular Loss and Damage finance gap report to be undertaken by a United Nations agency such as UNEP or UNDP.
They should enhance the discussion on delivering the finance to address loss and damage on a scale commensurate to the needs, with US$400 billion per year considered as a floor with an acknowledgement that financing needs will likely have to be revised upward over time.
In line with the Summit objectives, we expect that the main outcomes will include the concrete discussions on how the alternative sources of new and additional, predictable, adequate, precautionary and equitable financing to address loss and damage in such a way that it meets the needs of the most affected people and populations groups, protects their rights, and is directly accessible to them. The discussions should take into account that loss and damage finance should be grant based, ensuring that the delivery of Loss and Damage finance does not impose additional debt burdens.