COP27: Summit agrees climate finance for loss and damage in key deal

Sharm el-Sheikh, Egypt

Delegates from nearly 200 countries at the COP27 climate summit agreed to set up a “loss and damage” fund to help vulnerable countries cope with climate disasters in a landmark agreement Sunday morning in Egypt’s Sharm el-Sheikh.

The plenary COP27 agreement, of which the fund is a part, reaffirmed the goal of keeping global warming to 1.5°C above pre-industrial levels – a key demand of many countries.

But while the agreement represents a breakthrough in a contentious negotiating process, it does not strengthen language around reducing planet-warming greenhouse gas emissions.

The final text makes no mention of phasing out fossil fuels, including oil and gas.

In the final agreement, countries and groups with longstanding gripes, such as the United States and the European Union, agreed to establish a fund for countries most vulnerable to climate disasters caused by pollution disproportionately produced by wealthy, industrialized countries.

Negotiators and non-governmental organizations observing the talks hailed the establishment of the fund as a significant achievement after developing countries and small island nations came together to increase pressure.

“The agreements reached at COP27 are a victory for our entire world,” Molvin Joseph, president of the Alliance of Small Island States, said in a statement. “For those who feel neglected, we hear you, we see you, and we give you the respect and care you deserve.”

The fund will focus on what can be done to support loss and damage resources, but will not include liability or compensation provisions, a senior Biden administration official told CNN.

The United States and other developed countries have long sought to avoid such provisions, which could open them up to legal liability and lawsuits from other countries. In previous public comments, US climate ambassador John Kerry has said that loss and damage is not the same as climate compensation.

“‘Reparations’ is not a word or term used in this context,” Kerry said in a recent call with reporters earlier this month. He added: “We have always said that it is important for developed countries to help developing countries deal with climate impacts.”

Details on how the fund will work remain murky. It leaves a lot of questions about when the text will be finalized and operational, and how exactly it will be financed. The text also mentions an interim committee to help iron out those details, but doesn’t set a specific future deadline.

While climatologists celebrated the victory, they noted uncertainty.

“This loss and damage fund will be a lifeline for poor families whose homes have been destroyed, farmers whose fields have been destroyed and islanders who have been forced from their ancestral homes,” said Ani Dasgupta, CEO of the World Resources Institute. “At the same time, developing countries are leaving Egypt without a clear guarantee of how loss and damage funds will be monitored.”

A fund’s effect this year came largely because the G77 group of developing countries was united and exerted more influence over loss and damage than in previous years, climate experts said.

“They need to come together to force the conversation we’re having now,” Nisha Krishnan, Africa’s director of resilience at the World Resources Institute, told reporters. “The alliance holds because of this belief that we have to come together to deliver and push the conversation.”

For many, the fund represents a hard-fought victory over years, pushed to the finish line by drawing global attention to climate disasters like Pakistan’s devastating floods this summer.

Former U.S. climate envoy Todd Stern told CNN “It was like a big build-up. “It’s been around for a while, and it’s getting worse for vulnerable countries because a lot of money hasn’t been put into it yet. We can see the truly catastrophic impacts of climate change becoming more and more intense.

Scientists around the world have warned for decades that warming should be limited to 1.5 degrees above pre-industrial levels – a figure that is fast approaching as the planet’s average temperature has already risen to 1.1 degrees.

Beyond 1.5 degrees, the risk of extreme droughts, wildfires, floods and food shortages will increase dramatically, scientists said in a recent UN Intergovernmental Panel on Climate Change (IPCC) report.

But while delegates at the summit confirmed the goal of keeping global warming to 1.5 degrees Celsius, climate experts made no mention of fossil fuels or the need to phase them out to keep global temperatures from rising. As at last year’s Glasgow summit, the text calls for a phase-out of unsustainable coal power and the “phasing out of inefficient fossil fuel subsidies”. including oil and gas.

“The influence of the fossil fuel industry is found across the board,” said Lawrence Dubiana, CEO of the European Climate Foundation, in a statement. This trend may not continue in the UAE next year.

Some action has been taken to keep the 1.5 degree figure hit in Glasgow last year.

On Saturday, EU officials threatened to walk out of the meeting if a final deal failed to ratify a target of limiting warming to 1.5 degrees Celsius above pre-industrial levels. At a carefully choreographed news conference, the EU’s Green Deal czar Franz Timmermans, surrounded by a full line-up of ministers and other top officials from EU member states, said “no deal is better than a bad deal”.

“We don’t want 1.5 Celsius to die here and now. This is completely unacceptable to us,” he said.

Apart from the final agreement, the summit also brought a number of significant developments, including the resumption of formal climate negotiations between the US and China – the world’s two biggest greenhouse gas emitters.

After China blocked climate talks between the two countries this summer, U.S. President Joe Biden and Chinese President Xi Jinping met last week at the G20 summit in Bali, paving the way for U.S. climate envoy John Kerry to resume U.S.-China communications. agreed to establish. His Chinese counterpart Xie Zhenhua meets again formally.

“Even without China, even if the U.S. moves toward the 1.5 degree plan, if we don’t have China, no one else can meet that goal,” Kerry told CNN last week.

The two sides met throughout the second week of the COP, trying to pick up where they left off before China suspended talks, according to a source familiar with the discussions. They are focusing on specific action points such as improving China’s plan to reduce methane emissions – a potent greenhouse gas – and their overall emissions target, the source said.

Unlike last year, there was no major, joint climate announcement from either country. But the resumption of formal communication was seen as an encouraging sign.

Li Shuo, Beijing-based global policy adviser for Greenpeace East Asia, said the COP “saw extensive exchanges between the two sides led by Kerry and Xie”.

“The challenge is that they have to do more than talk, [and] And to lead,” Shuo said, adding that the restarted formal dialogue “helps prevent a bad outcome.”

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