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Finance has become a crucial focal point in the annual UN climate talks. As nations convene to discuss phasing out fossil fuels and adopting emission-reduction measures, the EU’s latest financial commitment could incentivize additional action.

In a significant move to tackle the severe impacts of climate change, the European Union has committed to a “substantial” financial contribution to a newly established international fund. This initiative is scheduled to be unveiled at the United Nations COP28 climate summit in Dubai, as announced in a joint statement by the European Commission and the UAE’s incoming COP28 president. The fund will specifically address the “loss and damage” inflicted by the relentless warming of the planet.

The EU’s initiative, led by Climate Commissioner Wopke Hoekstra, goes beyond financial support, including a broader commitment to hasten the transition to renewable energy sources. At COP28, the bloc aims to introduce funding initiatives to triple global renewable energy capacity by 2030, a pivotal move in mitigating the planet’s warming trajectory.

COP28 Summit CEO Adnan Amin aims to secure several hundred million US dollars for the “loss and damage” fund by the end of the event. He expresses optimism about the potential contribution from the UAE, highlighting ongoing discussions within the host nation. Last year, nations at the UN climate talks reached an agreement to establish a climate damage fund, offering hope for vulnerable developing nations contending with the severe impacts of climate change.

While the fund concept was celebrated as a breakthrough, its financial future has remained uncertain. Until now, no country has made a specific pledge, although some, like the United States, have hinted at their willingness to contribute.

At the Bloomberg New Economy Forum in Singapore, U.S. climate envoy John Kerry indicated that Washington would contribute “several millions of dollars” to the fund at the upcoming COP28 climate summit.

The UAE, a nation with a high per capita income but not obligated to contribute to UN climate funds, is under mounting pressure from European states to join the ranks of financial supporters. Although the UAE’s precise contribution remains uncertain, its participation would represent a significant stride toward ensuring the fund’s effectiveness in alleviating the plight of climate-vulnerable communities.