Avinash Persaud, emeritus professor of Gresham College in the UK, encouraged South Korea to contribute to a fund for compensating developing countries for the loss and damage incurred as a result of climate change during an interview with the Hankyoreh on Nov. 17, around two weeks before the kick-off of the COP28 climate conference of the UN. Through its breakneck industrialization, South Korea has skyrocketed up to being the producer of the ninth most greenhouse gases in the world.

This year’s climate summit will serve as an occasion for making concrete decisions about how to raise and allocate money for the so-called “loss and damage” fund created to compensate developing countries who are suffering the destructive effects of climate change that have arisen as a result of the development of more advanced economies. Persaud is one of 24 negotiators from around the world who debated the recommendations that will be made to individual countries at this year’s conference.

Over the course of five meetings, these two dozen negotiators devised a recommendation that the World Bank serve as trustee and host of the fund and are urging advanced economies and developing countries with the means to actively contribute to the fund.

While Persaud has a decorated career in the worlds of industry and economics, previously serving as a senior executive at JP Morgan and governor of the London School of Economics and Political Science, he also serves as a special envoy on climate for Barbados, a small island nation in the Caribbean Sea that’s facing coastal erosion and land slippage due to rising sea levels.

Our interview, presented below, has been edited for length and clarity.

Hankyoreh: The “loss and damage fund” is expected to be one of the key issues discussed at this year’s climate summit. What can you tell us about it?

Persaud: Well, I am one of the architects of the Bridgetown Initiative and a critical part of the initiative is the system of climate finance. We need a system because the amount we need to raise for climate finance is a very large number. [The Bridgetown Initiative aims to reform the world’s financial institutions for sustainable development and to respond to intensifying disasters and inequality due to climate change. -eds.]

Hankyoreh: South Korea is in the Group of 20. What sort of role do you think it needs to play in the loss and damage fund?

Persaud: I do encourage Korea to contribute to the fund. Korea had a rapid industrialization which made a contribution to the greenhouse gases in the atmosphere. By no means was it as large as America, Japan, China, Britain, or Europe. But it was not insignificant, and so I think a contribution would be an important part of global solidarity, especially given that partly as a result of that industrialization, Korea has become a relatively wealthy country in the world. I think that using its engineering strength, Korea could be a vanguard for the world in the green transition. And I think that, at the moment, other countries may be leading that, and Korea could join the leadership and become a beacon for other developing countries to follow.

Hankyoreh: Earlier this month, you and the other negotiators came to an agreement on your recommendation for a framework of how the loss and damage fund should be organized and managed. What can you tell us about this process of debate?

Persaud: There were 24 negotiators who were split half amongst developed countries like the United States, Germany, Japan, Britain, France, and Australia, and half represented developing countries like Barbados, Brazil, Egypt, and Pakistan.

There were 3 major issues. The first was who would be eligible for support. We agreed that all developing countries that are vulnerable to climate change would be eligible, but there would be thresholds and minimums and safeguards to make sure that the fund was well diversified and not overconcentrated in regard to who receives help.

The second main issue was whether the fund should be hosted by the World Bank or another institution. Now, hosting does not mean that it is a World Bank fund. It means that the World Bank is like the trustee, the accountant, the banker, and the administrator. It was finally agreed that there would be a set of conditions for the administrator to meet, and if the World Bank met those conditions, it would become the host of the fund.

And the third one is the big one: who will pay. And there was a big dispute. The developed countries believed that the old definitions of “developed” and “developing” were no longer relevant to who should pay. As the spokesman for the developing countries, I pointed out that the developed countries were responsible for 80% of the greenhouse gases that are in the atmosphere today. And that, of course, is what's causing global warming. And so, even though the definitions are old, they are still 80% good. In the end, we agreed to the old formula that developed countries would be urged to fund and developing countries, the poorer countries, would be invited to do so if they can, allowing for some of the more able developing countries — possibly Korea or China or Singapore — to make a contribution if they can. So that's really the loss and damage fund.

Hankyoreh: What’s the likelihood of there being an agreement reached on the loss and damages fund at COP28?

Persaud: I think that it is very likely, because this agreement that we reached is a fragile compromise. I think it is unlikely that anybody would be brave enough to try and reopen the negotiations at COP. I think these recommendations will be accepted, the fund will be operationalized, and a new board will be appointed.

Hankyoreh: Can you give us a sense of the scale of the fund?

Persaud: The estimates are that loss and damage today is in the region of about US$150 billion per year, I think, and rising towards US$350 billion by 2030. I believe that the fund needs to be in the region of US$100 billion dollars. I do not expect that money to come from government budgets. Government budgets are stretched everywhere. It's important that developed countries help to start up the fund. Essentially any developing country that experiences an extreme weather event, or a substantial, slow onset event would be eligible to come to the fund with a plan for reconstruction and rehabilitation and to receive some funding for that plan. But we pursue new and innovative sources of funding such as international emissions taxes, which can be diverted in part towards filling the fund.

Hankyoreh: Would this international emission tax look like an aviation or shipping tax?

Persaud: Well, we do not have a well-designed tax yet. That is the next task for us; to design shipping, aviation, and fossil fuel taxes that do not penalize poor countries or remote countries.

Hankyoreh: What sparked your interest in climate issues?

Persaud: Well, it is a very pressing problem. I think it is the problem of the day. I am motivated by trying to solve problems that impact people's lives. I believe that this is a global issue. And one of the reasons why the Bridgetown Initiative is successful, I think, is because it's not about Barbados; it's about the world. It’s about Koreans and Barbadians, and all of us are becoming climate-vulnerable. I think it's exciting to be involved in trying to solve global problems that impact people. That excites me. And it makes me feel that is a worthwhile thing to do with one's short life.

By Ki Min-do, staff reporter

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