After two weeks of tense negotiations at the United Nations’ (UN) COP27 climate conference in Egypt, member nations for the first time ever agreed to adopt a “loss and damage” fund for the world’s most vulnerable countries.
In a hard-fought win for the Alliance of Small Island States (AOSIS), the European Union (EU) and the United States (US) agreed to the fund if it was used to financially assist the poorest nations at risk and not developing nations like China, which is the second-largest economy and the biggest emitter of emissions in the world. The bloc and Washington also expected Beijing to contribute to the fund, though it will not be required to do so initially. The fund can also be used by middle-income countries in the event of severe climate disasters.
On African soil, the voice of the acutely affected communities were finally heard.#TogetherForImplementation
— COP27 (@COP27P) November 20, 2022
The US and Europe were long opposed to the fund due to fears that it would result in lawsuits over emissions, but the text clarified that the funds would be disbursed through established financial institutes like the International Monetary Fund and the World Bank, instead of creating another new fund to be paid by rich, developed countries.
AOSIS Chair and Minister of Health, Wellbeing, and the Environment of Antigua and Barbuda Molwyn Joseph asserted that the agreement represents a “win for our entire world.”
A fund for loss and damage is essential – but it’s not an answer if the climate crisis washes a small island state off the map – or turns an entire African country to desert.
— António Guterres (@antonioguterres) November 20, 2022
The world still needs a giant leap on climate ambition.
“Today, the international community has restored global faith in this critical process that is dedicated to ensuring no one is left behind,” he emphasised, adding, “We have shown those who have felt neglected that we hear you, we see you, and we are giving you the respect and care you deserve.”
Zambian Foreign Minister told AFP: “This is a very positive result from 1.3 billion Africans.”
The adoption of loss and damage fund at #COP27 is a monumental moment sprung out of decades of advocacy for #LossandDamage from civil society.
— Elizabeth Wathuti 🇰🇪 (@lizwathuti) November 20, 2022
When we are joining hands, change is possible.
The fight for implementation and delivery goes on! Honesty & accountability is key.✊🏾
Similarly, Pakistani Minister of Climate Change Sherry Rehman, who was at the forefront of the coalition of 134 poorer nations, stressed that the fund “is not about dispensing charity.”
“The announcement offers hope to vulnerable communities all over the world who are fighting for their survival from climate stress. […] And gives some credibility to the COP process,” she noted.
🇵🇰 leading & winning on world stage. Win for climate justice, win for developing world in honor of 33 million victims of Pakistan Floods & millions around the world who suffer from a climate catastrophe they did not creat & do not have resources to address. #LossAndDamage #COP27 https://t.co/TwnOVoEFBp
— BilawalBhuttoZardari (@BBhuttoZardari) November 20, 2022
Pakistan faced devastating floods over the summer that killed over 1,500 and left more than one-third of the country submerged, with damages estimated to be about $30 billion despite the country contributing less than 1% to global emissions.
Despite the optimism generated by the COP27 deal, experts have pointed out that it will be years before the fund comes into force, as the modalities still need to be worked out.
The Biden administration, for instance, is likely to face opposition from the Republicans, as it needs Congressional approval to provide the funds. John Barrasso (R-WY) called it “completely misguided,” underlining that “the Biden administration should focus on lowering spending at home, not shipping money to the UN for new climate deals. Innovation, not reparations, is key to fighting climate change.”
COP27 has kept alive the goal of 1.5C.
— European Commission 🇪🇺 (@EU_Commission) November 20, 2022
Unfortunately, it has not delivered on a commitment by the world's major emitters to phase down fossil fuels, nor new commitments on climate mitigation.
But the EU will stay the course.
Read President @vonderleyen statement on #COP27 ↓
Likewise, UN Secretary-General António Guterres welcomed the announcement, but acknowledged, “Clearly this will not be enough, but it is a much-needed political signal to rebuild broken trust.” However, he also pointed out the failure of developed countries to create a $100 billion fund in climate financing for developing countries, referring to a pledge they made in 2009.
The loss and damage fund was almost derailed after many oil-producing countries refused to increase the global warming limit from the previous year’s resolution of 1.5 degrees Celsius, despite temperatures already having increased by around 1.1 degrees and projections suggesting that this will rise to 2.7 degrees even with existing commitments. They also refused to change the current target of cutting greenhouse gas emissions by roughly 50% by 2030. Moreover, despite an agreement on reducing emissions, there was no agreement on phasing out the use of fossil fuels.
#COP27 has defined a way forward on a decades-long conversation on funding for addressing loss and damage.
— Simon Stiell (@simonstiell) November 20, 2022
Let’s use this success as a springboard to restore trust in our process.
Let’s use it to achieve greater ambition and faster implementation. pic.twitter.com/knJgrO3Oeh
For instance, Saudi Arabia, Russia, and Nigeria continued to push back against European countries that wanted a declaration on the need to phase out coal, oil, and natural gas. This is similar to last year’s conference, when members committed to “phase down” the use of fossil fuels instead of completely phasing them out.
UN Climate Change Executive Secretary Simon Stiell warned that “there is no room for backsliding.”
In a similar vein, German Foreign Minister Analena Baerbock underscored, “It is more than frustrating to see overdue steps on mitigation and the phase-out of fossil energies being stonewalled by a number of large emitters and oil producers.”
#COP27 & my time as COP President is over #COP27 sum-up:
— Alok Sharma (@AlokSharma_RDG) November 21, 2022
✔️ Historic outcome on loss & damage
✔️ Huge fight to protect 1.5C - ultimately did so
❗️ Lack of ambition on coal & fossil fuels
🌍 1.5C remains on life-support
My Closing Plenary remarks 👇https://t.co/X9sB8xaXar pic.twitter.com/7Y6b80BXjV
Along the same lines, EU Climate chief Frans Timmermans told reporters that the bloc was “disappointed” with the summit’s outcome. “We have all fallen short in actions to avoid and minimise loss and damage,” he stated, adding, “We should have done much more.”
The COP27 members agreed to establish a transitional committee to work on how to operationalise the new funding arrangements at COP28 next year.