It is therefore planned that the fund should serve to compensate for climate-related damage – for example due to extreme weather or drought catastrophes – in particularly affected countries. This limitation had been an important requirement of the EU and other industrialized countries.
The Egyptian conference presidency, meanwhile, published a new draft text on climate-related damage (“Loss and Damage”), which apparently reflects the agreement. The first plan is to appoint a commission to set up the fund, whose recommendations will then be discussed at the next UN climate conference in Dubai at the end of 2023. The dispute over “loss and damage” had brought the conference in Sharm el-Sheikh to the brink of failure – along with other unresolved issues.
For the time being, there are no stipulations on the sensitive question of the financial structure and the group of depositors. It is left open whether the fund should be set up under the umbrella of the UN Framework Convention on Climate Change or the Paris Climate Protection Agreement. The Framework Convention is based on the traditional division between industrialized and developing countries. The Paris Agreement is more open here, which in theory could also open the way for payments from emerging economies like China.
