COP28 nations have established a new climate fund that some already see as inadequate. 

In a significant breakthrough on the first day of the COP28 climate conference in Dubai, nations finalised the creation of a fund aimed at compensating countries grappling with loss and damage from climate change. 

The fund, known as the “loss and damage fund”, received a flurry of pledges, with the United Arab Emirates contributing US$100 million and Germany also committing a substantial amount. 

However, critics argue that the current financial commitments, totaling around US$420 million in the first hour, fall short of the US$380 billion annually estimated by the UN for developing countries to adapt to climate-driven changes.

Despite the positive step, many details about the fund remain unresolved, such as its size, long-term administration, and obligations for contributions. 

US climate envoy John Kerry has acknowledged the scale of the challenge, stating that the US administration was working with Congress to contribute US$17.5 million to the fund. 

Advocacy groups, while praising the initial progress, have called for more significant financial commitments from wealthy nations.

Developing nations, which bear the brunt of climate change impacts despite limited responsibility for carbon emissions, have long sought adequate funding to address climate disasters. 

The loss and damage fund, initially proposed last year, aims to provide financial support for vulnerable communities suffering from climate impacts.

However, sceptics are concerned that the current pledges may be insufficient to meet the estimated needs, with comparisons made to the underperformance of the Green Climate Fund. 

The urgency of the situation is underscored by the UN's prediction of 2023 as the hottest year on record, emphasising the pressing need for global cooperation in addressing climate challenges.

The fund, set to be hosted by the World Bank for the next four years, is expected to launch by 2024. 

While the initial commitments demonstrate unity, critics also highlight the absence of hard deadlines and mandatory contributions from countries.