It is now confirmed that this year has been the hottest in the last 125,000 years. To put matters in perspective, this is about 50,000 years before our ancestors left Africa. In the multiple waves in which our ancestors left Africa, one possible route hugged the Arabian coast, somewhere close to where the members of all nations are currently meeting for the 28th time to discuss the future of climate and the planet’s fate.

Nearly 30 years ago, several African nations and small Pacific Islands demanded that rich countries need to compensate for the harm caused by the effects of climate change. A protracted discussion ensued, which finally led to the announcement of the Loss and Damage Fund (LDF) on the first day of COP28. Most climate activists believe that this is an encouraging start. A modest $420 million was committed by five countries plus the EU. France and Italy each pledged $109mn on Friday; and Canada $16mn—taking the tally to about $655mn by the weekend. Clearly this is not sufficient but good enough to get started.

The pledge money will trickle in by early or mid-2024. The UNEP Adaptation Gap Report 2024 launched a month earlier had warned us that rich nations are likely scuttle the process and will fail to meet their obligations. Poor countries have received between $194-366 billion less each year than what is required for effective climate mitigation. This does not bode well for the Fund. If past record is anything to go by, developed countries are likely to dither their commitment to the Fund.

Yet, most environmental advocates are cautiously optimistic with the announcement, given the massive investments to exploit fossil fuels and its consumption. The fossil fuel industry receives in excess of $7 trillion in subsidies. Most donors to the LDF have no plans to reduce their commitment to supporting fossil fuel or its consumption. At the leaders’ summit, Sultan al-Jaber, president of COP28, announced a new framework for climate finance, backed by 11 countries. The framework seeks reforms of the World Bank and other multilateral development banks to manage the climate crisis better. It also seeks to operationalise September’s Nairobi Declaration which has called for a carbon tax. Al-Jaber also announced the opening of a new Global Climate Finance Centre, a private sector-focused think-tank that will help “unlock funds at unprecedented scale”.

The LDF money is miniscule given that billions are needed for those who face drought, storms and flood-conditions each year. A shadow hangs over the operationalising of the fund.

The LDF is a global contributory mechanism to help countries facing the worst effects of a warming planet. Its meetings have been the most gruelling that climate negotiators have seen in their careers with the most contentious point being that many rich emitters like the US lobbied to make contributions voluntary. The critical question before its committee is how best it can serve the needs and priorities of the marginalized. Who will receive the funds? Will these be grants or loans?

Another problem before fund administrators is that it will soon dry up; $655mn million is not enough. Several rich countries don’t find it obligatory to contribute as the definition of ‘developing’ and ‘developed’ countries is outdated. The definitions were last revised by the UN in 1992, and The World Bank in 1994. The US, UK and EU are responsible for about 50% of all emissions, while countries such as India, which developed later, are responsible for about 4% of historical emissions. Wealthy countries like Singapore, Qatar, and Saudi Arabia are still categorized under ‘developing’ nations, under those outdated definitions, and escape contributing to global funds. To illustrate, Qatar is the 40th largest emitter in the world but each Qatari expends 36 tons of carbon (the global average is 4.7 tons). Bahrain (27), Kuwait (25), Brunei (24) United Arab Emirates (22), Saudi Arabia (19) Oman (18), also emit far too much and do little to mitigate their carbon emissions. The US emits in excess of 15 tons per person. South America as whole emits 2.5 tons per capita, Africa 1 t/c, and low-income countries 0.3 t/c. India is ranked third but emits 1.9 t/c, compared to China’s 8 t/c. The entire calculus of the carbon emission game is skewed. Climate change is a roaring engine and we can’t stop this thing we started. This year saw a series of exposés on how climate mitigation efforts are flawed. An army of consultants, greedy for carbon credit, has made greenwashing for corporations rife. The state of climate economics is deplorable: Economists argue whether to use historical emissions, per capita emissions or total emissions as a reliable metric. As the planet approaches a point of no return, rich countries do not want to reduce their consumption. Growing economies (India, China) argue that their citizens have the right to have the same amount of wealth, and consume as much as the west. Climate-affected poor nations don’t see that far.

LDF requires leadership and collective action from climate-affected countries. It also needs enhanced understanding of several key issues, such as limits to adaptation, fast-tracking mitigation, and pushing rich countries towards avoidance and phasing out of fossil fuel. At its heart, it should adhere to the principle that the polluter pays. It must ensure that those who contributed most to the problem shoulder a proportionate financial burden.

The discussions so far have ignored human rights and global debt in the context of planetary health. Historical debts and the climate crisis have buried poor countries. Vulnerable and marginalised communities in developing countries are often the hardest hit by climate change. For this reason, the LDF must be swift, comprehensive, and effective in providing remedies and redress.

It should broaden its scope beyond addressing ecosystem destruction and climate mitigation strategies. It should mitigate global debt and perverse trade arrangements. Debts push poor countries to cut investments in education, health and environment spending. This pushes communities to find other ways to make ends meet. The casualty is nature. Seas and rivers get overfished. Land gets over-mined. Soils are intensively overworked to produce more. Trees disappear from forests to provide timber, fuelwood or land for more agriculture.

This climate crisis has been particularly severe in Africa. Conditionalities tied to IMF loans in Zambia, Burundi, and Malawi have added to the financial burdens of their populations. Uganda faces economic hardships due to global economic issues, the war in Ukraine, and the 2022 Ebola outbreak. Rising debt repayments and budget revisions curtail financing for improving ecosystem services and push communities to erode soils, forests, and water systems.

The diversity of creditors, the lack of systemic reform in the global financial architecture, and the piecemeal approach to debt treatment negotiations hinder findings of a comprehensive approach to the global debt crisis. These issues and their actors are missing in LDF’s discussions. The chief concerns of Africa and small island nations will remain side-lined.

Poor and developing countries remain reluctant to allow the US and rich nations to indirectly take control of LDF through the World Bank. The next phase would require much more introspection, with the World Bank playing a trustee role rather than allocating the capital itself. Many climate-affected nations are miffed at the idea that these are may be loans, not grants. The lack of any mention of human rights in the management of the fund is also deeply disconcerting.

It would be important to see how the Bank navigates through climate-torn countries with corrupt leaders and bureaucracies. It will have to think beyond conditionalities and debt-for-nature swaps. Providing targeted, reward-based, ecosystem-focussed grants rather than massive country-specific loans can be a start. Making communities not governments responsible will deliver results and reduce indebtedness of countries.

Tackling a planetary polycrisis requires harmonizing the climate COP processes with other treaties and bilateral initiatives. All bilateral donors agreed to forgive past bilateral loans. This has not happened across the board. Debt swaps and debt conversion worked in some countries but failed miserably in others. The G20’s Debt Service Suspension Initiative (DSSI) and the Common Framework for Debt Treatments have provided limited relief so far. Unlike past debt reductions, most HIPCs have kept borrowing, mainly from private creditors, even when their debt-to-GDP ratio increased. Today’s more complex private-public creditor landscape makes monitoring and coordination challenging.

The LDF will have to see through the fog of debt and human rights as it speeds up efforts to protect the vulnerable in the immediate term, and reverse climate change in the long term.

Pranay Lal is a biochemist, a public health specialist, and a natural history writer. He is passionate about ecological restoration and reversing climate change.