Author Archives: Benito Muller

Founding the Climate Solidarity Alliance: Possible Next Steps

Benito Müller

The Context

The Climate Solidarity Alliance (CSA) proposal has been elaborated in a number of OCB/ecbi posts (see list of Background Material below). In a nutshell it proposes an alliance of (national and sub-national) actors that are able and willing to introduce a Climate Solidarity Levy (CSL) earmarked as an innovative source of funding for responding to loss and damage from adverse climate impacts, in particular through the new multilateral Loss & Damage Fund (L&DF).

The proposal envisages a number of possible CSL, collected at the national or sub-national level. Their key characteristics are being: (i) easily collectable and (ii) earmarked for loss and damage. The paradigm example is an air ticket charge, akin to the French solidarity tax on airplane tickets of 2006 (see below). It is envisaged that the CSLs be used both domestically and to contribute to the L&DF, according to distribution formula (to be agreed between the CSA members) which could set limits on domestic use and introduce an L&DF solidarity pay-back multiplier for certain contributors, as suggested in Table 1: The developed country members would reward any L&DF contribution by a developing country member with a differentiated multiple direct payback to the domestic L&DF of the developing country member in question. For example (following the differentiation proposed in Table 1) if Fiji were to contribute USD 100 to the L&DF from its CSL revenue, then the developing country members of the CSA would apply a 2-fold solidarity multiplier and contribute USD 200 to the Fiji L&DF from their CSL revenue as ‘solidarity pay-back’. One of the advantages in this scheme is that countries with domestic L&DFs can receive innovative contributions from a variety of sources, including international ones, for responding to domestic L&D.

Table 1. Possible differentiated participation parameters

CSA Background Material

  • Climate Solidarity Levies Manifesto (21 April 2023) Given the urgency to provide financial support to the poorest and most vulnerable countries to respond to loss and damage from climate change and given the current global economic and fiscal situation, it is difficult to see how the new Loss & Damage Response Fund could get adequately capitalized without diverting funds from other existing multilateral climate funds. This is why Climate Solidarity Levies should be used as a proven way to mobilize new, additional and predictable innovative resources so as to avoid fund diversions from other climate funds. We call on governments to give Climate Solidarity Levies for the Loss and Damage Response Fund due consideration.
  • Call for an International Climate Solidarity Alliance (16 August 2023) A call on Kenyan President Ruto and French President Macron, as proponents of CSLs announce, to launch an International Climate Solidarity Alliance of countries willing to adopt an International Climate Solidarity Levy, initially focussed on air-ticket levies.
  • COP28: Call for a Climate Solidarity Alliance (15 December 2023) This post argues calls for a Climate Solidarity Alliance (CSA) as a group of national and sub-national stakeholders who are able and willing to introduce a CSL in their jurisdiction. This is what we need! And when do we need it? NOW! With a possible launch of the CSA at the “finance COP” in 2024.

National Examples


On 1 July 2006, France started to collect a solidarity tax on airplane tickets (taxe de solidarité sur les billets d’avion) as a way to help finance the fight against HIV/AIDS, tuberculosis and malaria in severely affected countries.

The tax was initially proposed by Presidents Jacques Chirac of France and Luiz Inácio Lula da Silva of Brazil in Paris in September 2005. It was taken up as an innovative funding source for UNITAID (a drug-purchasing organization created by Brazil, Chile, France, Norway and the United Kingdom and hosted by the World Health Organization) by the Leading Group on innovative financing for development created in 2006 as an informal network of states, IGOs, NGOs, and other stakeholders  “dedicated to the eradication of poverty and the preservation of global public goods (health, education, food security, agricultural development, environment, climate, biodiversity, etc.).”[1]

The level of the French solidarity tax is differentiated by destination (inside or outside the EEA+CH) and travel class (economy or other) and has evolved as shown in Table 2.

Table 2: Evolution of charges under the French solidarity tax

The levy is collected by the French Directorate General for Civil Aviation which transfers it not to the general budget, but to a dedicated ‘Solidarity Fund for Development’ managed by the French Development Agency. In 2023 the French tax raised around EUR 370 million, EUR 210m of which channelled towards UNITAID.  According to the French government, “no impact has been observed on French air traffic or on tourism following the establishment of the airline-ticket levy.”[2]


In 2019 Fiji introduced a national Climate Relocation of Communities Trust Fund as financing mechanism for its National Planned Relocation Arrangements, as recently described in a submission to the L&D Transitional Committee (TCS). The Trust Fund allows for funding from an array of domestic, private, international, and bilateral sources.

The Trust Fund has been established to operate as a multi-donor trust fund. Funding accrued through different domestic and international sources, mechanisms, facilities, and donors will be pooled and used in the aggregate for the support of planned relocation activities defined by the Climate Relocation of Communities Trust Fund Act (2019), and the Climate Change Act (2021). The Fund has been designed to leverage financing from a range of different domestic revenue-raising mechanisms such as levies, or taxes.

One of these domestic sources is the Fiji Environment & Climate Adaptation Levy (ECAL), which charges 5% on the gross annual turnover of a number of prescribed services (listed in Table 3). While the Fiji government will contribute 3% of the ECAL revenue, i.e. approx USD 3.6m,[3] to the Fund, “additional international and bilateral contributions are now required to take the initiative to scale.”[TCS, p.9]

Clearly the Fiji Fund satisfies all the hallmarks of a national L&DF and the ECAL contribution could very naturally be extended with an air ticket Climate Solidarity Levy providing direct additional domestic, and as part of a CSA leveraging international funding for loss and damage in Fiji. For example, a (modest) CSL levy of USD 5 per air passenger would currently raise around USD 6.5m[4] which, when contributed to the multilateral LAFD in the context of a CSA, would yield USD 13m annually (assuming a 2-fold solidarity multiplier).

Next Steps

Presidents Ruto (Kenya) and Macron (France) in Paris 23 January 2023 (photo source:

Our approach to establishing a CSA is to complement other initiatives looking into potential innovative global sources (taxes/levies) such as the new global taxation taskforce for climate action and sustainable development (the Taskforce), launched at COP 28 and co-chaired by Barbados, France and Kenya, by acting now, voluntarily, without the need of a multilateral agreement.

A first step could be for the Taskforce co-chairs, together with Fiji, to launch the CSA quadrilaterally this year (at COP 29). As mentioned, Fiji could thus obtain a climate solidarity contribution of USD 13 million. Kenya (assuming the same passenger charge and solidarity multiplier of 1.5, as suggested in Table 1), in turn, could obtain up to USD 25 million[5] (Unfortunately, I was unable to find Barbados passenger figures). These figures would be covered by the developed country CAS members, i.e. in the proposed founding step France, which should be feasible given the surplus of €160 million (see above).


[2] Leading Group 2012 , Information sheet on the airline-ticket levy, p.3. Currently nine countries implemented this tax: Cameroon, Chile, Congo, France, Madagascar, Mali, Mauritius, Niger and the Republic of Korea.

[3] ECAL rakes in $270m in Fiscal Year, Fiji Times, June 2019 [FJ$270m = US$ 120m]

[4] Airline records 1.3m passengers for 2022, Fiji Times 14 Feb 2023

[5] In 2021, number of air passengers carried for Kenya was 2.46 million. @US$ 5 pp = US$ 12.3 million [].

Good COP? Bad COP? Time to reform COP!

Luis Gomez-Echeverri and Benito Müller with contributions by Jen Allan, Matthias Rösti and Stefan Ruchti

It is three decades since the UN Framework Convention on Climate Change came into force in March 1994. Having witnessed most of the subsequent annual Conferences of the Parties (COPs), the recent Dubai COP28 was a reason for both concern and delight. 

To see over 80,000 participants in the UN “Blue Zone” (with many more in the adjacent host-country “Green Zone”) and 150 heads of state (see ‘family photo’) at the largest climate event ever held did, on the one hand, lead us to the concern whether this sort of scale was not ultimately detrimental to the objective of a COP.  On the other, it was a delight to witness the enthusiasm, and the global and diverse involvement of so many stakeholders from civil society, business, youth, indigenous peoples, philanthropy, and international organizations. Yet, overall we couldn’t help asking ourselves whether this may be time to take a step back and examine how best to maximize the benefit from this enthusiasm without creating detrimental side-effects.

Formally, “COP” refers to the negotiation sessions of the governing bodies of the multilateral climate treaties.  However, it now refers, at least informally, not just to the negotiations, but to a whole package of co-located diverse events and activities, among them: 

[A] “Negotiations”: We use this term here to refer to sessions of the three governing bodies established by the three treaties: the Conference of the Parties (COP) which is the supreme decision-making body of the Convention, the Conference of the Parties serving as the Meeting of the Parties to the Kyoto Protocol (CMP), and the Conference of the Parties serving as the Meeting of the Parties to the Paris Agreement (CMA), as well as their  Subsidiary Bodies.

[B] “Summits”: Meetings of heads of state and government, which originally took place only to celebrate “treaty COPs” (Kyoto, Copenhagen, and Paris), but which since 2021(Glasgow COP 26) have been taking place annually. 

[C] “Climate Expos”: This is our term for the wide range of climate action events in the multilateral “Blue Zone” and the host country “Green Zone”. The latter is the space for non-governmental organizations, the private sector, and civil society to advocate, showcase innovations, and create alliances and collaborations to support implementation. This broadly construed “Expo” of late also includes the ever-increasing number of Pavilions (paid for and hosted by Parties and others). 

Figure 1 Quo Vadis COP? (extended to COP 28)

According to the Final List of Participants, the total number of Blue Zone participants at COP28 was 83,884 of which 20,204 were (Party) negotiators.  Non-governmental observer organizations, whose number is capped, fielded 13,278 participants, while media outlets sent 2,673. However, these three categories (depicted in Fig. 1) made up less than half of the Blue Zone badges issued. The rest (see Fig. 2) consisted of international Agencies (2469), technical and support staff (19,370), and the largest contingent: overflow badges (24,890, 96% of which Party Overflow) allowing access to the Blue Zone but not necessarily the negotiations. 

Figure 2: Total final (in person) participant numbers COP 28

What are the driver behind the extraordinary growth depicted in Fig. 1? As demonstrated in a 2021 ecbi Policy Report, COPs have not been growing because of the negotiation agenda which has been growing roughly at the same pace in both mid-year SBs and subsequent COPs. The SBs can actually be regarded as the benchmark for negotiations in the absence of the exogenous factors driving the (negotiator) numbers of the COPs which have over time decoupled from those of the preceding mid-year Subsidiary Bodies (SB) sessions: COP 4 (1998) saw 3 times, and COP 23 (2017) 5 times the preceding SB negotiator attendance. This already large multiplier has since further increased, with COP 28 seeing more than 10 times the number of negotiators relative to SB 58 in June 2023. 

We are currently updating our 2021 Report and will be analysing, inter alia, the reasons for this growth decoupling. The 2021 Report identified the following drivers:

  • Summit nature of event (both directly through support staff, and likely also indirectly through officials from that country not wanting to be absent in the presence of their leader/minister).
  • Growth tends to be driven by a few very large delegations, not due to every delegation growing at the same rate.
  • Presence of officials from many different ministries/units of government. Different ministries/units tend to send several officials when they participate, so any additional ministry being part of the delegation tends to add another team rather than single key individuals and these tend to remain in the delegations in subsequent years.

We argued that the beginning of a new phase in global negotiations on climate change, now focused on the implementation of the 2015 Paris Agreement, would have a major impact on the role and functioning of the various components of the COPs listed above ([A], [B], [C]).  The solution, the Report suggested, is to decentralize the various components. This decentralization involves, in particular, the following disaggregation of the above-mentioned current ‘COP elements’:

  • Negotiations: to be held (purely as sessions of the relevant bodies) in Bonn at the World Conference Center (where the capacity is 5,000 participants), following the model of the mid-year session of the Subsidiary Bodies.
  • Global Climate Action Weeks  (“Climate Expos”) to take place in the Region holding the rotating COP Presidency (but not necessarily in the country of the Presidency). Regional Climate Weeks to be held as usual in the other regions.
  • Climate Summits, to be held (if possible only in special years when political leadership is required) in the COP Presidency region or Geneva (UN HQ).

We believe  such a decentralized format can be more targeted to the functions of each of the three components of the regime identified above. But more of this in our updated ecbi Policy Brief (forthcoming October 2024).

Nomen est Omen!

“Loss and Damage”: the liability spectre

Benito Müller

To veterans of the process it was truly astonishing to find a Presidency tabling a Decision to operationalise a Loss and Damage (L&D) Fund in the opening session of the COP, and to have it adopted at the same session. But this is exactly what happened in Dubai with Decision -/CP.28 -/CMA.5 (Operationalization of the new funding arrangements, including a fund, for responding to loss and damage referred to in paragraphs 2–3 of decisions 2/CP.27 and 2/CMA.4). To explain why this was extraordinary, not only because ‘big ticket’ decisions are not normally tabled at the outset of a COP, let us go back in time and see how the L&D issue evolved in the multilateral climate negotiations.[1]

At the beginning, there was the 1991 AOSIS proposal for an Insurance Mechanism, submitted by Vanuatu to the Intergovernmental Negotiating Committee for a UN Framework Convention on Climate Change (UNFCCC). The mechanism included an International Insurance Pool to provide financial insurance “to compensate the most vulnerable small island and low-lying coastal developing countries for loss and damage resulting from sea level rise.”[para 1.5] The pool was meant to be funded by “industrialised developed countries” according to a formula involving GNP and country emission figures “modelled on the 1963 Brussels Supplementary Convention on Third Party Liability in the field of Nuclear Energy”[para. 4] The AOSIS mechanism was not included in the UNFCCC, not least because of the its explicit reference to ‘compensation’ and ‘liability’.[2]

The first time L&D made it into a COP decision was sixteen years later in the 2007 Bali Action Plan (1/CP.13), where reference was made to “consideration of … means to address loss and damage associated with climate change impacts in developing countries that are particularly vulnerable to the adverse effects of climate change”.[para 1.c.iii] The idea of  an “international mechanism to address the unavoidable loss and damage” resurfaced in a submission by the African Group of Negotiators in 2009 (COP 15, Copenhagen) but it was not until 2010 (COP 16 Cancun) that the COP decided to do something on L&D, namely to establish “a work programme in order to consider … approaches to address loss and damage associated with climate change impacts in developing countries …”[para. 26, The Cancun Agreements (1/CP.16)]

Two years later, the 2012 Doha Decision 3/CP.18 was the first COP decision dedicated to addressing loss and damage. In it, it was decided (para. 9) to establish in 2013 “institutional arrangements, such as an international mechanism, … to address loss and damage associated with the impacts of climate change in developing countries that are particularly vulnerable to the adverse effects of climate change”. This duly happened at COP19 with the establishment of the Warsaw International Mechanism on Loss and Damage (WIM).

In Paris (COP 21, 2015) the negotiating text initially contained “an option from developing countries that included liability and compensation, and another from the Umbrella Group – including the US – that deletes all mentions of the topic altogether.”[CB Timeline] In the end L&D received a dedicated article (Art. 8) in the Paris Agreement focussing on the governance and the activities of the WIM.

L&D got its stand-alone article, yet its formulation was somewhat retrograde: While the WIM is solely about “addressing” L&D,[3] Art. 8 recognizes “the importance of averting, minimizing and addressing loss and damage associated with the adverse effects of climate change”[emphasis added] thus referring implicitly also to mitigation (averting) and adaptation (minimizing). Moreover, in the Paris cover decision (1/CP.21 Adoption of the Paris Agreement) the COP “agrees that Article 8 of the Agreement does not involve or provide a basis for any liability or compensation”[para. 51] demonstrating that the spectre of liability was was perceived by some, particularly the US, as a live and active problem.

The conceptual triad (‘averting’, ‘minimizing’ and ‘addressing’) dominated the L&D narrative for many yars to come. An OCP/ecbi blog post in October 2022 (The time is ripe … for serious discussions on finance to address and indeed respond to L&D through a dedicated pilot fund) on the eve of COP27 in Sharm El Sheikh provides a  summary of this and proposes that the Paris-triad be replaced by the notion of ‘responding’ to L&D, to be implemented through a Pilot Loss and Damage Response Fund, the elements of which were elaborated in a separate OCP/ecbi blog post, which illustrated the relevant ‘response’ concept and its components relevant for the fund as follows:

Figure 1. The role of the Response Fund in the L&D Management Toolkit

As reported in the subsequent OCP/ecbi blog post the COP at its 28th Session (Sharm El Sheikh, 2022), acknowledged the “urgent and immediate need” for financial resources to assist particularly vulnerable developing countries “in responding to loss and damage associated with the adverse effects of climate change … in the context of ongoing and ex post (including rehabilitation, recovery and reconstruction) action[4], and decided to “establish a fund for responding to loss and damage whose mandate includes a focus on addressing loss and damage”[5]

This Fund, as mentioned above, was operationalised by the headline decision taken on the opening day of COP 28 in Dubai (2023). It is noteworthy that the Paris concept-triad was superseded by simple references to ‘responding to L&D’[6] and yet the spectre of liability was still present, as witnessed in the CarbonBrief Key outcomes agreed at the UN climate talks in Dubai:

The board will also be tasked with giving the fund a name. This came as the US – which for decades resisted the entire concept of “loss and damage” – pushed back against references to a “loss and damage fund”. Instead, US climate envoy John Kerry repeatedly referred to the “climate impact response” fund. The US State Department declined to comment on the reasoning behind this to Carbon Brief.”

Given the long-term problem of US governments with the “loss and damage” narrative due to the spectre of liability outlined above, it is not difficult to guess what the reasons for this is. And given that it was most likely that very same issue which prevented progress on the issue of responding to adverse climate impacts over the past twenty years, it might be not unreasonable to try out the climate impact response narrative, if only to remove the liability spectre as a reason for not participating meaningfully, which cannot be said of the US pledge in the initial pledging round in Dubai (see UNFCCC pledge tracker and Fig. 2): The US pledged USD 17.5million! Of the 15 country pledges, 9 were larger than that in absolute terms, two of them (Italy and France) almost 7 times more. The picture becomes even clearer if we look at relative measures, such as the pledges as share of GDP: all but one country made a pledge double digit larger than the US, indeed, the UEA pledge relative to its GDP is a staggering 287 times larger than that of the US.

Anything to enable the US to participate meaningfully must be worth trying. If not “Climate Impact Response Fund” then maybe “Climate Impact Recovery, Reconstruction and Rehabilitation (CIR3) Fund”? The fact is, a name can be a sign of something to come, an omen. What we need to avoid is that it is regarded as a bad omen, if we want to avoid what happened over the last thirty years!

Last but not least, I was told that the Fund will indeed need to be given a proper name (not just ‘Fund’) if it is to obtain legal personality as was decided in para. 15 of the Dubai Decision. So the Board of the Fund will have to face this issue, sooner rather than later.

[1] For a more detailed account, see the excellent Carbon Brief piece on “Timeline: The struggle over ‘loss and damage’ in UN climate talks” (27 September 2022) by Josh Gabbatiss.

[2] All that remained was a reference to ‘insurance’ in Art. 8.]

[3] The COP “1. Establishes the Warsaw international mechanism for loss and damage, […], to address loss and damage associated with impacts of climate change,”[Decision 2/CP.19, 2013]

[4] 2/CP.27 and 2/CMA.4, para 1, emphasis added.

[5] Ibid. Para.3, emphasis added.

[6] The only reference to the triad was in the context of referring to the  “Santiago network for averting, minimizing and addressing loss and damage”.

COP28: Call for a Climate Solidarity Alliance

Benito Müller

Activists participate in a demonstration for loss and damage at the COP28 UN Climate Summit, Monday, 4 December 2023, in Dubai, United Arab Emirates. (AP Photo/Kamran Jebreili)

1. The World Climate Action Summit:

Launching the  International Taxation Taskforce

As announced in a press release of the Élysée Palace, “Antigua and Barbuda, Barbados, France, Kenya, and Spain jointly launched a new taskforce on international taxation, with the support of the European Climate Foundation” on 1 December 2023 during the World Climate Action Summit that preceded the UN Climate Change Conference (COP28) in Dubai, United Arab Emirates. Taskforce members “reaffirmed the urgent need to mobilize new, additional, predictable, and adequate financial resources – in addition to current commitments – to support developing and vulnerable countries’ transition to a low carbon and nature positive economy, while addressing the adverse effects of climate change, including loss and damages [and] the need to consider all options available in a spirit of international solidarity and equity.”

The Taskforce emerged from discussions on the possibility of developing new taxation instruments that took place during the Summit for a New Global Financial Pact in Paris in June 2023, and from the Nairobi Declaration on Climate Change, the outcome of the Africa Climate Summit (ACS, Sept 2023), which urges consideration of a global carbon taxation regime.

Building on this momentum, “Kenya and France proposed the establishment of a taskforce to examine possible new revenue streams to unlock additional financial resources to tackle the joint development, nature and climate agenda, notably through innovative taxation mechanisms.” The Taskforce “brings together a coalition of countries committed to the progress on international taxation for sustainable development and climate action, with the aim to identify the most promising avenues and formulate concrete proposals at COP30, to be implemented by the relevant decision-making institutions and frameworks.”

As confirmed by Chrysoula Zacharopoulou, France’s Minister of State for Development, the idea is for the Taskforce to identify international taxes to “be negotiated in relevant international institutions, like the OECD, the UN, or the G20.”[1] It would be excellent if such international levies for loss and damage could be negotiated. However, for reasons I explained in an earlier OCP/ecbi post (Call for an International Climate Solidarity Alliance), I am not convinced that this could be done, at least not in a reasonable amount of time. This is why in that post I called for the formation of an International Climate Solidarity Alliance (ICSA) between national governments willing to set up domestic Climate Solidarity Levies (CSL) as innovative sources for loss and damage, both at home and for the new Loss and Damage Fund (L&DF) formally established on the first day of COP28.

2. The COP28 Climate Solidarity Side Event

On 8 December 2023, Antigua and Barbuda and OCP/ecbi co-hosted a side event on Climate Solidarity Levies: Innovative Sources of finance for Loss and Damage, dedicated to the memory of my late dear friend Saleemul Huq, co-author of the CSL Manifesto.

Climate Solidarity Levies

In my presentation, I described the key features of such CSLs as:

  • Collection (‘off-budget’) in a dedicated Fund at the national level to be used for in-country L&D expenditures and as contributions to the L&DF; and
  • Simplicity of collection, such as through (differentiated) flat-rate air ticket or cargo container charges.

I also highlighted the possibility of restricting domestic use of the revenue from CSLs, and an L&DF contribution payback for developing countries, to incentivise their participation (for example, the Alliance would pay them back a multiple of what they contribute to the L&DF).

What about the Taskforce?

The presentation concluded by looking at the the present revenue potential of Taskforce members if they were to collect an €/$ 5 (undifferentiated) solidarity L&D air ticket charge, comparing it (where applicable) to the L&DF pledges that were made at COP28.

The €/$ 5 per ticket charge was chosen purely for illustrative purposes. It corresponds to the average undifferentiated charge that would generate the €160 million currently actually collected by the existing French Solidarity Levy for HIV/AIDS (UNITAID), which, nota bene, has had no effect on passenger numbers (so no threat to tourism dependent economies).

The reason for singling out Taskforce members in this manner was simply to call on them not only to discuss the feasibility of global tax instruments over the next couple of years, but to do something now! That is, they should implement an air-ticket levy to help address their own L&D needs, as well as to help others by providing regular and predictable contributions to the L&DF now. Generating a global solution in a bottom-up, step-by-step manner is not always possible, but when possible, we should at least try (the chances of success are at least as good as getting a global top-down agreement). What is needed now is a ‘leading group’ of countries who not just talk-the-talk, but walk-the-walk, and Taskforce members are ideally placed to do precisely that – in parallel to their global deliberations.

3. The Final Call

Personally, the best thing about the side event was chatting with Stephen Hammer, who had just become founding CEO of the New York Climate Exchange (NYCE). When complaining about being told that a national application of a CSL in the US would be very difficult as Congress would have to be pass it, he suggested directly approaching some of the relevant authorities, such as the Port Authority of New York and New Jersey (PANYNJ).

Having myself ‘gone sub-national’ in my quest for innovative sources of funding for climate change before (see Box 1), I was delighted by the suggestion and am more than happy to follow up and collaborate with him and the NYCE on the idea!

In Paris it became ‘chic’ for sub-nationals to provide multilateral support for climate change finance. Now it must become ‘de rigueur ‘!
A Day in Agadir — sub-national contributions to multilateral climate finance
Addressing the finance gap in sub-national contributions to the fight against climate change
Innovative Sources for Multilateral Climate FinanceState and City Climate Leadership Includes Global Finance
Massachusetts UN Least Developed Countries Fund
Box 1. Some past ideas on sub-national sources for multilateral climate funds

As it happens, the figure of $5 used above for illustrative purposes fits in very well with the charges already collected at NY/NJ airports. Thus, for my last economy class trip to New York, I paid around the same for using the immigration and customs services at JFK airport (see my airline ticket receipt below).

So, the scale of the proposed solidarity charge should not be an issue. What could one expect to raise?

Stephen told me that the PANYNJ last year handled around 113 million passengers (La Guardia 29m, JFK 55m, Newark 29m) [2], which means $5 passenger climate solidarity charge would have generated $565 million, a sum which, when augmented by a $10 TEU (Twenty-foot Equivalent Unit) cargo container charge would have reached $639 million,[3] just under the combined total of country pledges to the L&DF to date. It therefore makes eminent sense to pursue such sub-national Alliance members and thus drop the ‘international’ from the name and simply call for a Climate Solidarity Alliance (CSA) as a group of national and sub-national stakeholders who are able and willing to introduce a CSL in their jurisdiction. This is what we need! And when do we need it? NOW! With a possible launch of the CSA at the “finance COP” in 2024.[4]

[1] Matteo Civillini, France, Kenya set to launch COP28 coalition for global taxes to fund climate action Climate Home News, 16 November 2023.

[2] In 2019, the PANYNJ handled 7.4 million TEUs containers.

[3] See: List of busiest airports by passenger traffic.

[4] By decision 1/CP.21, para. 53, Parties shall set a new collective quantified goal (NCQG) prior to 2025.

Some Thoughts on Access Modalities for the new Loss and Damage Response Fund

Benito Müller

The purpose of this post is to recapitulate some reflections on a topic I have been passionate about for some time: the devolution of funding decisions to the national and sub-national level — be it under the heading of ‘enhanced direct-‘ or ‘devolved programmatic access’ — as a contribution to the operationalisation of the new loss and damage response fund.

Enhancing Direct Access through National Funding Entities

April 2009. I have been involved in developing and promoting the idea of devolving funding decisions to the national and sub-national level for over a decade (see ecbi Brief History of Enhanced Direct Access), starting in 2009 with an ecbi Policy Brief on The Reformed Financial Mechanism of the UNFCCC which introduced ‘national climate change funds‘ as national climate change decision and funding hubs for in-country direct access to (multilateral) funding.

April 2011.  While advising Carol Mwape (LDC member of the Transitional Committee for the GCF), I submitted a note on Enhanced Direct Access, which aimed “to synthesise some of the reasons that have been put forward as to why, at the scale envisaged in the Cancun Agreements, the climate finance regime in general, and the Green Climate Fund, in particular, will have to involve a fundamental devolution of decision making to National Funding Entities.”

October 2011. As elaborated in an OIES Information Note (‘Enhanced (Direct) Access’ through ‘(National) Funding Entities’: Etymology and Examples, April 2013) “the term ‘funding entity’ was introduced [into the deliberations of the TC] by Carol Mwape, […] and it was defined as follows: 

  • Funding Entities’ means the national legal entities and multilateral organizations that have been accredited by the GCF Board as meeting its criteria for accessing funding in order to approve and fund eligible activities. 

This terminology was introduced to differentiate these funding entities from implementing entities: 

  • Implementing Entities’ means the national legal entities and multilateral organizations that have been accredited by the GCF Board as meeting its criteria for accessing funding in order to implement eligible activities approved by the GCF − a definition which itself was borrowed from the relevant definition in the Rules of Procedure of the Adaptation Fund Board (Rule 2.j).”

In the final meeting Carol “provided the TC Chair with text that ultimately became part of paragraph Direct Access paragraph of the GCF Governing Instrument:

47. … The Board will consider additional modalities that further enhance direct access, including through funding entities with a view to enhancing country ownership of projects and programmes.”[OIES (2013), emphasis added]

February 2014. The GCF Background Paper on Additional Modalities that Further Enhance Direct Access, including through Funding Entities (GCF/B.06/15) proposes an operational taxonomy (‘understanding’) of implementing entities, intermediaries, and funding entities.

  • Implementing Entities (IEs) are defined as entities which have  “the specialized fiduciary standards relating to the management and oversight of project or programme implementation.”[para. 6]
  • Intermediaries, in turn, are IEs, entitled “perform intermediation functions, such as allocation of grants within the criteria of an approved project or programme, and/or intermediation of reimbursable loans.”[para. 7]
  • Funding Entities are “public sub‐national, national or regional intermediaries with decision‐making authority over activities within the context of a project or programme in an approved funding proposal.”[para. 8]
  • Government Funding Entities. “Further enhancement of country ownership may also be envisaged if, under this special case of intermediaries that can be categorized as funding entities, a funding proposal relating to a project or programme refers to the use of national financial systems and budgets through national treasuries or ministries of finance for the implementation of a policy intervention programme.”[para. 51]

Devolved Programmatic Access

March 2014  saw the publication of an ecbi Policy Brief on Devolved Access Modalities: Lessons for the Green Climate Fund from existing practice which analysed the notion of ‘programmatic access’, differentiating, in particular between programmes as bundles of projects, each of which approved by the GCF Board, and programmes where the project funding decisions are devolved, in particular to the (sub-) national level.

April 2016 This was the basis of a joint submission on Devolved Programmatic Access to the GCF Board with some (alternate) members,[1] recommending that the GCF Board “specify the understanding that ‘programmatic access’ is to be interpreted as devolved access […]), and that project bundles are not ‘programmes’ but a special case of projects.”

So what?

In keeping with the recommendation of the 2016 recommendation to the GCF Board, the proposal here is simply that the language for operationalising the new Loss and Damage Response Fund of the TC Co-chairs proposal (TC5/2023/4/Rev.2) of October 2023 be amended to refer to explicitly the devolution of funding decisions under programmatic access, particularly for direct access programmes. Another (additional) option would be to make the relevant clarifications in the initial guidance to the new Loss and Damage Response Fund.

[1] Diann Black-Lane (Antigua & Barbuda), Tosi Mpanu-Mpanu (DRC), Cheikh Sylla (Senegal), and Anders Wallberg (Sweden)

Procedural justice and (in-) equitable participation in climate negotiations

Carola Klöck (CERI, Sciences Po Paris), Christian Baatz and Nils Wendler (University of Kiel)

In a few weeks’ time, COP28 – the 28th Conference of the Parties to the UN Framework Convention on Climate Change, UNFCCC – will take place in Dubai. As every year, the world meets to discuss ways to address global climate change and reach the Convention’s objective of preventing “dangerous” human interference with the climate system.

The Dubai meeting is likely to again break a record in participation: 70,000 participants are expected to attend COP28 according to the host – this beats even the latest COPs, which attracted just under 40,000 (COP26 in Glasgow, 2021) and 50,000 participants (COP27 in Sharm El-Sheikh, 2022), respectively. The recent COPs have thus had more attendees than even COP21 in Paris, which drew 30,300 participants. Indeed, over the almost 30 years of COPs, these events have been growing tremendously to become true “mega-conferences”.

Yet, only a minority of these thousands of participants are in fact climate negotiators and state representatives: In Glasgow, around 16,000 participants had Party badges (including ca. 6,000 so-called Party overflow), while in Sharm El-Sheikh, the number was just over 21,000 (of which 9,500 Party overflow), according to the official lists of participants.

Regardless of the overall trend to send ever more delegates, we not that the number of delegates individual states send varies enormously: while some states have hundreds of people on site, others struggle to send anyone at all. Indeed, over the past COPs, we find that some countries have only a handful delegates, or are even completely absent. For example, the Glasgow COP, held in a pandemic context saw particularly low participation rate from some Pacific island countries, who in part had still closed borders or strict quarantine rules. But even under normal circumstances, a diverse set of countries are severely underrepresented, including Venezuela and Slovenia (3 delegates each at COP23); Brunei Darussalam and Eritrea (3 delegates each at COP24); or St. Vincent and the Grenadines (absent in Sharm El-Sheikh). If we consider COPs since the 2015 Paris Agreement, we note that around eleven countries at each meeting had delegations of less than five people, and around three countries were completely absent (see the Figure below). Around 40 countries had up to 15 delegates, which may seem not that small, but could still be too small to fully take part in the process.

Figure 1: frequencies of delegation size for COP 21 to COP27. Based on lists of participants

Of course, many of the countries with the smallest delegations have only very small populations, are poor, and/or are politically fragile and ridden by internal conflict or even violence. But particularly when we consider slightly larger delegations of up to 15 people, a considerable number of countries is concerned. And, if we take the format of intergovernmental negotiations among formally equal Parties seriously, we would want all Parties to be present, and to be able to meaningfully engage in the process. This is often referred to as procedural justice: the ”ability to participate in and influence decision-making processes” (Suiseeya 2020).

A delegation of three or five people will in fact struggle to participate, let alone influence climate decision-making. Just as the number of COP attendees has grown, so has the climate agenda and the number of meetings taking place in parallel. For example, Carter (2018: 84) counts “at least 17 meetings under five bodies […] taking place [simultaneously]” for COP20, almost ten years ago. And this count does not even include all the events “on the side”, notably in the ever-larger pavilion space, a sort of exhibition space with hundreds of roundtable discussions and events. Clearly, small delegations are at a disadvantage.

To some extent, coalitions – working with like-minded countries – help overcome size limitations, and small states have become particularly good at forming and working through coalitions. At the same time, coalitions by definition advance compromise positions, which may be rather far from a member country’s national priority. In addition, we see similar inequalities in delegation size and diplomatic capacity within different coalitions. Coalitions thus help but do not solve the procedural justice problem.   

What else could be done to make climate negotiations more procedurally just? How many delegates would a country need to be able to fully engage? It is clearly not possible to indicate what a sufficiently large delegation would look like. We nevertheless have two suggestions of improving the climate process:

First, the UNFCCC already provides funding, through its Trust Fund, to enable two delegates from each eligible country to attend, and three for least developed countries and small island developing states. Many Parties would not be able to attend negotiations, in particular subsidiary meetings, at all without this support (Falzon 2021) But to really enable all Parties “to participate fully and effectively”, as the Trust Fund promises, it would need to significantly increase its support and pay for more delegates to come to COPs and other negotiation meetings.

Second, the sheer size and complexity of the COPs have come under critique. Critics wonder to what extent these huge events are really worth “the effort, money, and carbon footprint” (Lebădă & Chasek 2021). Already ten years ago, scholars called the UNFCCC process to “streamline its work programme, cut sessions, eliminate overlaps, and delete agenda items” (Vihma & Kulovesi 2013: 251). Several others similarly call for reforming the process. Even if reform is politically difficult, fewer sessions and a reduced agenda could increase the chances of even small delegations to participate effectively in negotiations – and would additionally lower the meetings’ carbon footprint as well as open up opportunities for even smaller states to host the COP, as only few countries have the infrastructure to welcome tens of thousands of people.

Müller et al. (2021) aptly ask “Quo vadis COP?” Clearly, the current trend of ever larger COPs with ever more attendees is not sustainable, and may in fact undermine the credibility and legitimacy of COPs as such, with citizens everywhere wondering about the impact of such carbon-intensive meetings. Reducing overall COP size while increasing the representation of small and poor states, many of whom at the frontlines of climate change, would make the process more just and hopefully also lead to better outcomes – direly needed in the face of the climate crisis.

Call for an International Climate Solidarity Alliance

Benito Müller

Presidents Ruto (Kenya) and Macron (France) in Paris 23 January 2023 (photo source:

These reflections are about the aviation and maritime levies referred to in the AU Position Narrative’s Call for Urgent Action (see below) as innovative sources of grant finance for the new Loss and Damage Fund established last year at COP 27 in Sharm el Sheikh. 

Global vs National Implementation. In the AU Position Narrative (PN), these levies are introduced as ‘global.’ However, it is our considered opinion that, while a desirable long-term goal, global (sectoral) levies are not a viable short-term option, particularly if they are meant to be used for addressing adverse climate impacts (in most vulnerable countries).

For one, the multilateral climate treaties (UNFCCC/Paris Agreement) do not have the mandate to take decisions that are binding on either the aviation or maritime sector, and even if they did, there is considerable opposition to the idea of global levies in general.

As to global levies agreed by the relevant multilateral sectoral treaty organisations (ICAO and IMO), it is in our opinion highly unlikely that any revenue of a climate related tax would be used to fund anything outside the relevant sector. Thus, even if the IMO were to adopt the much-discussed carbon levy on maritime shipping, it is much more likely that the revenue would be recycled to ‘greening’ the maritime sector and addressing adverse response measure impacts of the levy than adverse climate impacts in developing countries.

We have thus come to the conclusion, reflected in the Manifesto for Climate Solidarity Levies (CSLs, see below) that a national implementation of such levies is a much more viable way in which to kick start the generation of grant finance to address adverse climate impacts in developing countries.

Climate Solidarity Levies. The proposed CSLs are modelled after the tried and tested French Solidarity Levy for HIV/AIDS introduced in 2006. The defining features of such CSLs, following that model, are that they:

  • are easy to collect (like lump-sum charges on air tickets or maritime cargo containers);
  • are collected ‘off budget’ in dedicated national funds; and
  • contribute to the multilateral effort address the problem at hand, in this case addressing adverse climate impact in developing countries (through contributions to the relevant funds of the Paris Agreement, in particular the Adaptation Fund and the Loss and Damage Fund.

As such they adhere to the first three of the guiding principles of the PN: their application is purely voluntary and not restricted to any type of country, they are globally pooled (although one could envisage that some countries retain a share of the revenue for domestic action), and they are targeted at the greatest need. 

Way forward. President Ruto and President Macron, as proponents of CSLs announce, if possible at the African Climate Summit, the launch of an International Climate Solidarity Alliance of countries willing to adopt a CSL, initially focussed on air-ticket levies.


4TH – 6TH SEPTEMBER 2023, NAIROBI, KENYA. “Position Narrative: An African Vision for Green, Climate-Positive Economic Growth”


5. Launch a new instrument for a just, inclusive and democratic institutional architecture. A second objective of multilateral collective action should be aimed at introducing new universal global instruments to mobilise the incremental $3.5 trillion annual investment that is needed to achieve the required emissions reduction by 2030 and 2050. It is our position that on this matter, priority must be accorded to instruments that make polluters pay, including a global aviation and maritime levy, global financial transaction tax and a global fossil fuel tax. 

These levies should be collected and the capital should be pooled with several principles in mind:

  1. These financial burdens need to be applied globally, including to the Global South, not just to a handful of wealthy countries.
  2. All of the funds raised go into a single, global pool (to avoid local optimisation). 
  3. The funds need to be deployed on the basis of achieving the highest climate impact in the areas of greatest need, ensuring investment is happening to deliver both mitigation and adaptation outcomes. 
  4. A portion of the funds should be deployed towards technological innovation and reducing the cost of new technologies, such that they can be deployed globally. 
  5. Finally, we should create a global governance body – a Global Green Bank – that manages the collection and distribution of the funds based on the best available climate science, and is independent of national interests. Put differently, we cannot be hostage to our national interests in the deployment of these funds.

Climate Solidarity Levies

A Manifesto on an Innovative Funding Source for the new Loss and Damage Response Fund

 by Benito Müller (OCP), Saleemul Huq (ICCCAD), Robert Filipp (IFF)

Nearly 20 years ago, in October 2003, President Chirac appointed Jean-Pierre Landau, the French Inspector General of Finance, to chair a working group set up to “reflect upon the feasibility of new international financial contributions to reduce poverty, to promote development and to finance global public goods such as the environment, public health and rare resources”. The ensuing Landau Report on New International Financial Sources for Development considered, among others, environmental taxes and suggested in the short run to focus on sectors such as maritime and air transport.

On 1 July 2006, France began to collect a solidarity levy within its jurisdiction as a way to help finance the fight against HIV/AIDS, tuberculosis and malaria in severely affected countries. The levy is a surcharge of €1 on economy class flights within Europe, €4 on long-haul economy class, €10 on business class within Europe and €40 on long-haul business class.

The levy is collected by the Directorate General for Civil Aviation which transfers it not to the general budget, but to a dedicated ‘Solidarity Fund for Development’ managed by the French Development Agency earmarked for funding organisations working in global health such as UNITAID, a drug-purchasing organization created by Brazil, Chile, France, Norway and the United Kingdom and hosted by the World Health Organization. By 2012, the levy has been raising between €162 million and €175 million per year, totalling one billion euros since its creation. According to the French government, “no impact has been observed on French air traffic or on tourism following the establishment of the airline-ticket levy.”[1]

Following their successful implementation in France, the idea of Climate Solidarity Levies was taken up as potential innovative climate change financing mechanism. In October 2006 the concept of an International Air Travel Adaptation Levy based on the French Solidarity Levy (FSL), was launched in a technical report by Benito Müller and Cameron Hepburn (University of Oxford).  A global mandatory application at the time was estimated to have a revenue potential of US$8-10 billion annually, which were meant to be contributed to the Kyoto Protocol Adaptation Fund to support concrete adaptation project in the most vulnerable countries. In 2008, the Least Developed Country Group submitted the idea as International Air Passenger Adaptation Levy to the UNFCCC AWC-LCA in Poznan.

In 2021, Saleemul Huq and Mizan Khan (ICCCAD) decided to look into re-launching the idea as an innovative source of funding for Loss and Damage inflicted by un-avoided climate change impacts. Following the establishment of a new Loss & Damage Response Fund at COP 27 in December 2022, they decided this should be the recipient of the re-launched levies and were joined by Benito Müller (OCP) and Robert Filipp (IFF) to develop and promote this idea.

As regards developing the idea, it was decided to follow the Landau Report in considering not only the aviation sector but also maritime transport. This would not only widen the resource base, but also enable those countries with an existing air ticket levy to participate in the CSL idea.

It was also decided that a single global levy, as submitted to the UNFCCC in 2008 would not work, not only because the UNFCCC, and for that matter the Paris Agreement does not have the mandate to take decisions that are binding on the airline sector, but also because global levies are deeply unpopular among most national treasuries. Instead, it was decided to fall back on the French UNITAID model and propose an International Climate Solidarity Alliance of countries with a CSL at the national level (hence “Climate Solidarity Levies” and not “Levy“).

As to revenue potentials, air ticket levies adopted, say, across the EU, would have raised around €1 billion in 2019, while – following the proposal by the International Maritime Emission Reduction Scheme – a levy of €10 per maritime TEU (container) across the same jurisdictions would in 2021 have generated €924 million (according to OECD container transport data). 

Given the urgency to provide financial support to the poorest and most vulnerable countries to respond to loss and damage from climate change and given the current global economic and fiscal situation, it is difficult to see how the new Loss & Damage Response Fund could get adequately capitalized without diverting funds from other existing multilateral climate funds. This is why Climate Solidarity Levies should be used as a proven way to mobilize new, additional and predictable innovative resources so as to avoid fund diversions from other climate funds. We call on governments to give Climate Solidarity Levies for the Loss and Damage Response Fund due consideration.

20 April 2023, on behalf of the CSL Consortium:

                  Saleemul Huq (ICCCAD), Robert Filipp (IFF), Benito Müller (OCP)


Download pdf-flyer here

Paris Postscript 1

Clea Caulcutt, Giorgio Leali and Paul de Villepin, Politico, 23 June 2023

“France already has in place two types of taxes that have been suggested: one on plane tickets, another on financial transactions,” [President Macron] said adding that he was going to “make others follow us and mobilize” around these issues.

During his closing remarks at the summit, Macron also said the OECD club would be an appropriate framework for negotiations, noting that countries had previously used the Paris-based Organisation for Economic Co-operation and Development as a vehicle to reach a deal on reforming global taxation for large multinationals.

“There has been a great deal of discussion on the idea of international taxation, over and above what countries and institutions are doing. Whether it’s on financial transactions, maritime transport or certain other models, it will only work if it’s truly international, and so it presupposes an agreement, as we’ve been able to do on international taxation,” he said during the closing ceremony of the summit.

[1] Leading Group 2012 , Information sheet on the airline-ticket levy, p.3.

Paris Postscript 2

At a seminar on Innovative Sources of Climate Finance held at SciencesPo in Paris on 26 September 2023, Prof. Müller proposed that in order to incentivise developing countries to participate in a Climate Solidarity Alliance (CAS) as a source for grant funding for the new Loss and Damage Fund (LADF), they could be paid-back a multiple of their LADF contribution by the ICSA. More precisely he proposed the following differentiated limits on domestic use of CSL revenue and LADF pay-backs:

Piloting New Loss and Damage Funding Arrangements

Benito Müller[1]Director ecbi, MD Oxford Climate Policy, University of Oxford, corresponding author:

I. The Sharm el Sheikh Decision

On 20 November 2022, a Decision was taken at Sharm el Sheikh on “funding arrangements for responding to loss and damage associated with the adverse effects of climate change” which is widely regarded as historic[2]“Cop27 agrees historic ‘loss and damage’ fund for climate impact in developing countries”; “Historic ‘loss and damage’ fund adopted at COP27 climate summit”; “Historic Deal Struck … Continue reading and as the principal outcome of the 2022 UN climate conference (COP 27/CMA4). In a nutshell, the Decision:

  • acknowledges the “urgent and immediate need” for financial resources to assist particularly vulnerable developing countries “in responding to loss and damage associated with the adverse effects of climate change … in the context of ongoing and ex post (including rehabilitation, recovery and reconstruction) action”, and
  • decides to establish:
    1. new funding arrangements” for assisting particularly vulnerable developing countries in responding to loss and damage … and that these new arrangements complement and include sources, funds, processes and initiatives under and outside the Convention and the Paris Agreement”.
    2. a loss and damage response fund  “in the context of establishing the new funding arrangements”, and
    3. “a transitional committee on the operationalization of the new funding arrangements … to make recommendations … for consideration and adoption by [COP 28/CMA 5, December 2023] with a view to operationalizing the funding arrangements, including the [L&D Response Fund]”

II. The Need for Innovative Sources

It is welcome that the response actions that are meant to be supported by these L&D funding arrangements are indeed L&D response actions as characterized in our L&D Response Fund Elements Note (see Figure 1). Moreover, the GCF precedent (see Box) shows that it is possible to draft a Governing Instrument for a new multilateral fund within a year, but it also shows that this is just the beginning of making such a fund operational. If the GCF experience is anything to go by, then it would be 2027 when the new L&D Response Fund would take its first investment decision.

Moreover, as Adil Najan pointed out in his recent Conversation piece: “Real as the jubilation is for developing countries, it is also tempered. And rightly so. For developing countries, there is a real danger that this turns out to be another ‘placebo fund’, to use Oxford University researcher Benito Müller’s term – an agreed-to funding arrangement without any agreed-to funding commitments.”

The GCF has to date managed to attract $1.25bn per annum for each mitigation and adaptation [3]Over the past four-yearly replenishments, the GCF managed to secure on average $10bn and it would not be unreasonable to use this as a benchmark for the new L&D Response Fund. The question is whether this could be generated from traditional national budget sources without eating into the GCF contributions? I fear not, but fortunately, the Decision recognizes “the need for support from a wide variety of sources, including innovative sources”[4]Para. 6.e The good news is (viz. Annex 1 below):

  • there are a variety of innovative sources that could deliver (far beyond) the GCF-benchmarked contributions, and
  • using them at scale would also obviate the toxic debate of which countries should contribute to the new L&D Response Fund!

III. The Need for Innovative Response Tools

The funding disbursement model for the new L&D Response Fund will have to differ drastically from the way in which is currently done in the multilateral climate funds which is to submit project proposals through an elaborate pipeline with an investment decision that can take many months, if not years.

James Cameron, in his recent Don’t set sights on a single massive global loss and damage fund: start small and start now, gives an illuminating account of some type of response tool: insurance! (see Annex 2 below). Clearly insurance schemes will have to be used as response tools under the new funding arrangements for L&D response, and equally clearly, they will have to be tailor-made to fit responding to adverse climate impacts, something that is not necessarily part of the skill-set of the TC members. These and other response tools will have to be tailored by relevant technical experts (possibly under the guidance of the TC).

IV. The Need for Urgent Action

The Decision is unequivocal about the “urgent and immediate need” to operationalize these new funding arrangements, and I concur with James Cameron that we should not waste time but “create a pilot project and start getting the money flowing to where it is needed [and at the same time] work on a longer-term loss and damage facility would carry on, with the intention of getting it up an running in the years after 2024, while still piloting innovative new sources of funding and loss and damage response tools.”

The ideas put forward in the above-mentioned Elements Note remain valid and should be proposed for adoption at COP 28 (December 2023) as part of the new funding arrangements, in particular to establish (for a period ending in 2026):

  • a Technical Expert Pool for designing and piloting tailor-made L&D response tools, convened by the Transitional Committee and/or the Standing Committee on Finance, with the help of the Santiago Network; and
  • a crowdsourcing platform — mirroring the donate button on the Adaptation Fund website [5]Arguably the quickest way to establish such a platform would be to request the Adaptation Fund to set up a stand-alone website (under the guidance of the TC) as part of their arrangements with the UN … Continue reading — to kick-start piloting innovative sources of L&D funding, for example a solidarity offset premium from the voluntary carbon market[6]Speed is of the essence, in particular, if one wishes to attract contributions from the Voluntary Carbon Market. or voluntary windfall donations by fossil fuel companies,[7]BBC News 12 March 2023 “Aramco: Saudi state-owned oil giant sees record profit of $161bn and receive funding for designing and piloting L&D response tools.

Annex 1. Innovative Funding Sources

The paper coining the phrase “placebo fund”, written in the run-up to the 2009 Copenhagen climate conference, was focussed on using earmarked shares of emission auction proceeds as innovative source of climate finance and related that: “In early October 2008, the Environment Committee (ENVICom) of the European Parliament put forward an amendment to the Commission ETS proposal, concerning the ‘earmarking article’ (Art. 10, §3). Whereas the original Commission language suggested at least 20% the revenues generated from the auctioning of allowances … should be used (i.e. earmarked) for climate change, the ENVICom amendment requires that the 100% of the revenue shall be used for climate change, with at least 50% for developing countries. This means, given the Commission estimates of auctioning revenue, that in 2020, €37 billion would be earmarked for developing countries.”[pp.5-6]

Moreover, a July 2009 Climate Dialogue article on the same theme pointed out that “There have been alternative ‘innovative financing’ proposals that would bypass national treasuries altogether. The Norwegian government has put forward the idea of retaining a number of emission permits at the international level in order to auction them internationally and to distribute the proceeds directly to developing countries. Another proposal by the Group of Least Developed Countries envisages a passenger levy for international air travel, again levied internationally and distributed to poorer countries. These two instruments could cover a significant proportion of the financial underpinning for developing countries in a new climate deal.”

The International Air Passenger Adaptation Levy (IAPAL), Submitted in December 2008 to the AWC-LCA at COP 14 in Poznan, would at the time have generated between  $8bn and $10bn annually, while a new innovative source, a 5% share of proceeds on the Voluntary Carbon Market, currently under consideration, is projected to generate $2.5bn annually by 2030.

Arguably the most direct innovative source would be a Share of Proceeds from the Voluntary Carbon Market (VCM) to the relevant entities of the financial mechanism of the Paris Agreement for supporting developing countries in adapting and/or responding to adverse climate impacts. For more on this idea (originally just for adaptation), see “Safeguarding Social Integrity in the Voluntary Carbon Market.”

Annex 2. Innovative Response Tools

We then need to optimize the public funds available by leveraging philanthropic and private sector participation. A particularly promising group of partners is insurers, which not only oversee a large pool of investment capital, but also quantify for financial markets the size of the risk of climate loss in different regions.

We are already beginning to see examples of public, philanthropic and insurer partnerships to support climate adaptation in vulnerable communities and ecosystems. Founded in 2007, the Caribbean Catastrophe Risk Insurance Facility (CCRIF) became the world’s first multi-country risk pool. Through contributions from numerous international governments alongside the World Bank – coupled with insurance and asset management partners – CCRIF has been able to provide low-cost insurance policies to member countries against various natural disasters. This ultimately provides financial liquidity in the face of catastrophic events while encouraging climate adaptation. In all, CCRIF has made approximately $244.8 million in pay-outs since its inception.

Another example is the insurance broker Howden, which launched seven projects for charities this year, with 15 more planned for next year. The projects demonstrate the potential for parametric insurance – when certain thresholds are reached, money is automatically released – to meet some of the cost of loss and damage, and to respond to the need for increased resilience in climate-vulnerable countries. One such project is the catastrophe bond Howden, through its foundation, and other insurance groups, have developed with the Danish Red Cross. When levels of volcanic ash and prevailing winds reach a pre-agreed level that indicates highly populated areas are at risk from a volcanic eruption, funds are immediately paid out to the Red Cross so they can get aid to where it is needed at once.”


1 Director ecbi, MD Oxford Climate Policy, University of Oxford, corresponding author:
2 Cop27 agrees historic ‘loss and damage’ fund for climate impact in developing countries”; “Historic ‘loss and damage’ fund adopted at COP27 climate summit”; “Historic Deal Struck at COP27 to Create Loss and Damage Fund for Poor Nations
3 Over the past four-yearly replenishments, the GCF managed to secure on average $10bn
4 Para. 6.e
5 Arguably the quickest way to establish such a platform would be to request the Adaptation Fund to set up a stand-alone website (under the guidance of the TC) as part of their arrangements with the UN Foundation, which manages the AF crowdsourcing.
6 Speed is of the essence, in particular, if one wishes to attract contributions from the Voluntary Carbon Market.
7 BBC News 12 March 2023 “Aramco: Saudi state-owned oil giant sees record profit of $161bn

News from COP 27

John Kerry, Share of Proceeds for Adaptation, and Loss and Damage Response Fund

John Kerry announcing the Launch of the ETA. photo: Benito Müller

On 9 November, the day after the US mid-term elections, US Special Presidential Envoy for Climate John Kerry launched Energy Transition Accelerator (ETA), an initiative designed to support developing country efforts to from fossil to renewable energy, with the help of the private sector and the voluntary carbon market.

According to a 7 November Washington Post article on the initiative,“political paralysis and public pressure are pushing companies to step up with their own emission pledges — and money to help poorer countries bearing the brunt of climate change’s impacts”  and it was indeed extremely welcome to find that ETA includes of what has become known as a Share of Proceeds for Adaptation, as stated in the State Department Press Release:[1]

“To help strengthen climate adaption efforts in vulnerable countries, five percent of the value of all credits generated through the ETA will be dedicated to international support for adaptation and resilience.”

Given that the ETA will seek broad alignment with evolving best-practice standards, it would be quite awkward for the best-practice standards, such as the IC-VCM’s Core Carbon Principles, not to follow suit and include a SOPA (for more on this, see “SOPA added to the proposed IC-VCM Core Carbon Principles”.

It is also interesting that the hyperlink in the quote leads to a Post article (5 Nov) on Pakistan leading the drive to establish “a dedicated loss-and-damage fund”, as reflected in the OCP blog post of 4 November.