Sunak Will Pledge UK Support for New Climate Damage Fund at COP28

By Bloomberg

Nov 25, 2023

image is BloomburgMedia_S4MDN8DWLU6801_25-11-2023_11-00-08_638364672000000000.jpg

Rishi Sunak, UK prime minister, departs 10 Downing Street, ahead of the presentation of the Autumn Statement in parliament, in London, UK, on Wednesday, Nov. 22, 2023. UK Chancellor of the Exchequer Jeremy Hunt aims to boost business investment by £20 billion ($25 billion) a year by unleashing a package of measures on Wednesday including making permanent a 100% tax relief on investment spending by British businesses.

UK Prime Minister Rishi Sunak is set to pledge his support for a new fund to help vulnerable countries cope with the impact of rising temperatures when global climate talks kick off next week.

Sunak will join the US and European Union in pledging money to the landmark loss and damage fund at the United Nations-backed COP28 summit in Dubai, according to people familiar with the matter who spoke on condition of anonymity.

The fund was finally agreed at COP27 in Egypt in 2022 after decades of fraught negotiations. Poorer countries have long argued that richer countries should help them pay for the havoc wreaked by climate change, but wealthy nations wanted to avoid any suggestion that they are offering “compensation” for polluting the atmosphere.

Sunak will attend the two-week conference starting Nov. 30 to demonstrate that the UK is still committed to reaching net zero emissions by 2050 after his decision in September to water down the government’s green agenda and boost investment in oil and gas exploration.

The final amount offered by the UK has yet to be decided and still needs to be approved by ministers, according to the people. It is likely to come from its £11.6 billion ($14.6 billion) International Climate Finance pot that the government already ring-fenced for the five years to 2026.

“We will work with all partners to push for ambitious outcomes at COP28 and keep” the 1.5C “temperature goal in reach, while seeing progress on finance, forests, adaptation and loss and damage,” a spokesperson for the Department for Energy Security and Net Zero said, adding that the UK will continue to play a leadership role at COP28.

The UK hopes that the World Bank’s role will enable the loss and damage fund to be established in a timely manner, and believes it should receive finance from a wide range of sources. While the UK will support an agreement in Dubai next week, it is subject to approval at COP28.

Despite the breakthrough last year in establishing the loss and damage fund, setting it up has been tricky and its exact size remains unclear. The European Union promised “substantial” contributions earlier this month. The US will also “put several million dollars in the fund,” John Kerry, the country’s climate envoy, said at the Bloomberg New Economy Forum in Singapore at the start of November.

Delivering finance has been one of the hardest issues to solve in three decades of UN sponsored climate talks. Rich countries finally appear to have met their pledge to mobilize $100 billion a year to poorer nations to help them pay for the transition to clean energy and adapt to warming temperatures. 

However, that promise was delivered two years too late and now they need to agree another target in 2025. The latest estimates show that poor countries will need $2.5 trillion by 2030 to cope with a changing climate and boost green investment.

At COP28, the UK will also unveil around £500 million of new international climate funding for forests, and is expected to issue a joint statement on boosting nuclear fuel with Canada, France, Japan and the US, the people said. Sunak also wants to announce that the UK and Canada will jointly chair a summit next year aimed at weaning countries off coal, they said, though it’s not yet been finalized.

The Inflation Crisis Is Fraying Europe’s Climate Consensus

Sunak’s decision to scale back the UK’s green policies earlier this year risked giving allied nations grounds to question Britain’s leadership on climate issues. At the same time, Bloomberg reported government plans to expand its definition of what counts as climate aid in order to meet its pledge on international spending without boosting funding.

(Updates with comment from Department for Energy Security and Net Zero in 6th and 7th paragraphs)

©2023 Bloomberg L.P.

By Ellen Milligan , Jessica Shankleman

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