The agreement on the loss and damage fund to compensate the victims of climate change is the first major success of the COP28 climate summit in Dubai, but in practical terms, the figures put on the table will not make much of a dent in the issue.
UAE, the host country, and Germany each pledged $100 million to the loss and damage startup fund, while a further €135 million is coming from the EU, reaching a total of $430 million so far.
The pledges were announced with much fanfare, with Europe currently holding the top position as the leading donor. But the sums themselves are little more than symbolic. As the costs that the loss and damage fund has been designed to cover will amount to tens of billions of euros every year, sums in the hundreds of millions won’t cut it.
So, where will the real money come from?
Ahead of the summit, France and Kenya agreed to launch an international taxation task force at COP28 to push for a range of new taxes on international shipping, aviation, financial transactions and fossil fuels to raise funds to pay for the costs of climate change.
Chrysoula Zacharopoulou, France’s development minister, has said that the goal of the task force is to agree on specific proposals by COP30 in two years that could then be negotiated at other international forums such as the Organisation for Economic Cooperation and Development (OECD) and the UN.
This is an initiative that the EU is well placed to lead, and doing so would also be smart politics.
Last week, the EU suffered an embarrassing defeat on international tax policy at the UN when it, together with the US and UK – failed to defeat plans for a UN tax convention that will effectively pass tax rule-making from the OECD to a UN tax authority over the next two years.
The resolution tabled by Nigeria to establish the new body was passed by 125 votes to 48, with Russia, Belarus and China – not usually known for their commitment to financial transparency – gleefully voting in favour of the new body, in part because they saw a chance to inflict a geopolitical defeat on the western powers.
The defeat was a triumph of Western highhandedness and entirely avoidable.
The EU hardly helped itself by updating its ‘black’ and ‘grey’ list of states deemed to be “non-cooperative jurisdictions for tax purposes” and chastising states in the Caribbean and Africa for not complying with EU regulations on anti-money laundering and tax transparency while turning a blind eye to the tax havens harboured by the Netherlands, Luxembourg, Malta and Cyprus.
The adoption of the EU’s carbon border adjustment mechanism, one of the von der Leyen Commission’s policies to set the EU as a global rule-setter on carbon levies and Net Zero emissions, despite the warning of some African and developing countries that they will suffer serious economic damage from CBAM, added to the perception that the EU wants to dictate the terms on tax and financing.
It is important for the EU to change that perception and establish itself as the main international ally of countries already paying the highest costs caused by climate change.
Even if the numbers still leave a lot to be desired – leading the way in financing the loss and damage fund is the place to start.
Today’s edition is powered by Tetra Pak
Global food systems need an urgent shift
Everyone deserves access to safe and nutritious food that does not cost the earth. We are taking action with various stakeholders to enable greater food security and reduce food loss & waste while improving livelihoods and increasing access to food.
See how we are moving food forward →
Ukraine’s EU membership currently does not coincide with Hungary’s national interests, and the EU should propose a “strategic partnership” with Ukraine before starting accession talks with the war-torn country, Prime Minister Viktor Orbán said on Friday.
European Union policymakers reached a political deal on the Cyber Resilience Act on Thursday evening, bridging their differences on the last outstanding issues.
The EU must take concrete actions to address the public health effects and health systems threats of the climate crisis, EU health ministers urged on Thursday.
A meeting between Spanish Socialists and Catalan independentists scheduled for Saturday in Geneva will be mediated by a representative of a Swiss think tank that had previously helped in negotiations with Basque terrorists – to ensure all agreements are honoured amid “great mistrust” between the two sides.
If you’re looking for more policy news, don’t miss this week’s Agrifood Brief and the Tech Brief.
Look out for…
- Commission President Ursula von der Leyen participates in COP28 UN Climate Change Conference in United Arab Emirates Friday-Saturday.
- Justice and Home Affairs Council on Monday-Tuesday.
- Transport, Telecommunications and Energy Council (Transport) on Monday.
Views are the author’s
[Edited by Alice Taylor/Nathlaie Weatherald]