At the COP28 Summit in Dubai last week, diplomats from nearly 200 countries approved a new fund to help poor nations with disasters (New York Times, Reuters, BBC). Known colloquially as the “loss and damage fund,” the plan aims to provide financial assistance to vulnerable countries hit hardest by recent climate change disasters (Reuters). The fund has a long history, with initial ideas for its creation beginning in the 1990s (BBC). At last year’s COP27, countries agreed to set up a plan over the next 12 months with dedicated organizers to hash out financing details (BBC). The United States particularly emphasized that the plan ensures long-industrialized nations are not the only ones that pay into the fund (New York Times).

With the announcement of the fund’s adoption, some notable first pledges include $100 million from the host of the summit, the United Arab Emirates, at least $51 million from Britain, $17.5 million from the United States, $10 million from Japan, and a significant $245.39 million from the European Union, including $100 million from Germany (Reuters). 

The breakthrough on the damage fund, a long-standing demand from poorer nations, is seen as a positive step that may facilitate further compromises during the ongoing summit. COP28 President Sultan Ahmed al-Jaber called it a “significant milestone” (New York Times). The initial pledges total about $549 million, but the estimated cost of climate-related damages for developing countries by 2030 ranges from $280 billion to $580 billion per year (New York Times). 

While there is excitement about the fund’s early adoption, some climate leaders remain cautious given the absence of a replenishment cycle (Reuters). The loss and damage fund will be formally approved at the end of the summit on Dec. 12, with the World Bank temporarily housing the fund (New York Times).