In a "historic" moment, nearly 200 nations agreed Thursday to launch a fund aimed at compensating countries hit by deadly floods, heat and droughts, as the United Nations climate talks kicked off in the United Arab Emirates (UAE).
The announcement came as the Emirati host of the COP28 talks declared that fossil fuels must be part of any climate deal negotiated over the next two weeks.
The "loss and damage" fund drew praise and hundreds of millions of dollars in pledges but also warnings that much more is needed to help vulnerable nations.
The talks in Dubai come at a pivotal moment for the planet, with emissions still rising and the U.N. Thursday declaring 2023 on track to become the hottest year in human history.
The formal establishment of the "loss and damage" fund long sought by climate-vulnerable nations provided an early win at COP28, where sharp divisions over the phasing out of fossil fuels were immediately apparent.
"We have delivered history today," said COP28 President Sultan Al Jaber as delegates embraced and cheered.
Al Jaber said it was "the first time a decision has been adopted on day one of any COP and the speed in which we have done so is also unique, phenomenal and historic.
"This is evidence that we can deliver. COP28 can and will deliver," he said.
Leaders have been urged to move more quickly to a clean energy future and make deeper cuts to emissions, with the world off-track to keep global temperature rises below agreed levels.
A central focus of COP28 will be a stocktake of the world's limited progress on curbing global warming, which requires an official response at these talks.
Double the size of last year's COP27, the conference is billed as the largest ever with 97,000 people, including Britain's King Charles III and some 180 other heads of state and government expected to attend.
The U.N. and hosts the UAE say the talks will be the most important since Paris in 2015, and climate finance for poorer nations has been a key agenda item.
The UAE sees itself as a bridge between the rich developed nations most responsible for historic emissions and the rest of the world, which has contributed less to global warming but suffers its worst consequences.
Initial steps toward creating the “loss and damage fund” was a major accomplishments at last year’s U.N. climate conference in Egypt, but it was never finalized.
The UAE and Germany immediately announced $100 million each toward the fund with the European Union following with $246 million. Britain pledged $40 million, while the U.S. and Japan promised $17.5 million and $10 million, respectively.
More pledges are expected in coming days, but the amounts fall well short of the $100 billion developing nations say are needed.
A recent report by the United Nations estimates that up to $387 billion will be needed annually if developing countries are to adapt to climate-driven changes.
"The progress we've made in establishing a loss and damage fund is hugely significant for climate justice, but an empty fund can't help our people," warned Madeleine Diouf Sarr, chair of the Group of the 46 Least Developed Countries.
The Alliance of Small Island States – among the most impacted by rising seas and other effects of climate change – said "the work is far from over."
"We cannot rest until this fund is adequately financed and starts to actually alleviate the burden of vulnerable communities," it said.
"Success starts when the international community can properly support the victims of this climate crisis, with efficient, direct access to the finance they urgently need," the group added.
Rachel Cleetus, policy director of the climate and energy program at the Union of Concerned Scientists, said the financial commitments should be "in the billions, not millions."
"Millions would be an insult given what's happening already around the world," Cleetus told reporters.
"We want to hear the starting point is a conversation about billions and then a plan to scale it up by 2030 so that it meets the needs that are clearly rising," she said.
The fund will be housed in the World Bank for four years, a decision that developing nations begrudgingly accepted as the Washington-based institution is dominated by Western powers.
Its board members must now be appointed and represent wealthy and developing nations, and their first steps will be critical in building up its credibility.
A European diplomat said the first contributions will enable the financing of pilot projects and to test how the fund works before seeking more money "in a year or a year-and-a-half."
Developed countries, the U.S. chief among them, insisted that contributions be on a voluntary basis, and want richer emerging powers such as China and Saudi Arabia to open their wallets, too.
U.S. climate envoy John Kerry said the government would work with Congress to provide the $17.5 million pledge and said the U.S. expects the fund to "draw from a wide variety of sources."
Richard Sherman, the South African co-chair of the committee that oversaw negotiations, acknowledged that "the outcome might not be satisfactory to all people.
"We certainly know that our colleagues in civil society have been shouting at us."
The 50-year-old Al Jaber is both COP president and head of UAE's national oil giant, ADNOC, raising concerns over a conflict of interest amid calls for a phasedown of fossil fuels to be negotiated in Dubai.
On the eve of COP, Al Jaber denied that he used the COP presidency to pursue new fossil fuel deals, allegations first reported by the BBC.
In his opening address, Al Jaber told delegates they must "ensure the inclusion of the role of fossil fuels" in any final climate agreement and praised oil companies for coming to the table.
"They can lead the way. And then leading the way will ensure that others follow and catch up," he said.
But U.N. climate chief Simon Stiell told the meeting: "If we do not signal the terminal decline of the fossil fuel era as we know it, we welcome our own terminal decline."
And Pope Francis, who canceled his trip to COP28 due to illness, urged participants to reject "the vested interests of certain countries or businesses," in a statement posted on X, formerly known as Twitter.
Finding a common position on the future of fossil fuels will be difficult at COP where all nations – whether dependent on oil, sinking beneath rising seas or locked in geopolitical rivalry – must take decisions unanimously.
The UAE hopes to marshal an agreement on the tripling of renewable energy and doubling the annual rate of energy efficiency improvements by 2030.
Nations will navigate a range of thorny issues between Nov. 30 and Dec. 12, and experts say building trust could be a huge challenge.
At the opening of the conference, delegates paused for a minute's silence for civilians killed in the Gaza conflict.
Iranian President Ebrahim Raisi will not be attending the summit because of the presence of Israeli President Isaac Herzog, Iran's state media reported on Thursday.
Neither U.S. President Joe Biden nor Chinese President Xi Jinping are attending, though Washington is sending Vice President Kamala Harris.
But the U.S. and China, the world's two biggest polluters, did make a rare joint announcement on the climate this month that spurred optimism going into COP28.
