Germany says it will take two years to figure out location of climate fund

SAO PAULO: Countries agreed at the UN climate summit last month to create a fund to help poor countries damaged by climate disasters, but it's likely that it will take two years to figure out where the money will come from, a German climate official said on Wednesday.

The timeline for getting the fund up and running was laid out by Germany's climate envoy Jennifer Morgan in a press conference in Sao Paulo, Brazil.

Morgan said that there will be a decision on the institutional composition of that fund by next year at COP 28, which will be referred to as the next round of UN climate talks in November in Dubai.

I think the discussions will continue for another year, because of the other areas of who funds those institutions. Morgan, along with Chile's environment minister, led the working group that came up with the UN deal on loss and damage.

The fund was created on the principle that rich industrialised nations that are responsible for most of the world's greenhouse emissions should pay developing countries for the damage caused by the climate. Morgan said the fund needed to go beyond public money from industrialised countries to find innovative funding sources.

She said UN Secretary-General Antonio Guterres suggested a tax on fossil fuel companies' windfall profits.

The COP 27 agreement also called for reforms of international financial institutions, such as the World Bank Group and International Monetary Fund, to find ways to contribute to loss and damage finance.

The EU believes that China -- the world's second-biggest economy, but classified as a developing country by the UN as a developing country, should also be included in the fund.

On Wednesday, the US Climate Envoy John Kerry told the United Nations that the United States has consulted with COP 27 host Egypt and the United Nations on damage, proposing that the fund be created in 2023 rather than 2024.