Historic ‘Loss & Damage’ Fund Adopted At COP27 Climate Summit

BY Realty+

Countries at the United Nations COP27 climate summit in Egypt have adopted a final agreement that establishes a fund to help poor nations cope with the extreme weather events caused by global warming.

Following tense negotiations that ran through the night, the summit’s Egyptian presidency released a draft text of the overall agreement. It also called a plenary session to push the document through as the final, overarching agreement for the UN summit. 

The plenary session approved the document’s provision to establish a ‘loss and damage fund to help developing countries bear the immediate costs of climate-fueled events such as storms and floods.

However, many of the more contentious issues regarding the fund were pushed into talks to be held next year, when a ‘transitional committee will make recommendations for countries to then adopt at the COP28 climate summit in November 2023. The recommendations will cover ‘identifying and expanding sources of funding, which refers to the vexed question of which countries should pay into the new loss and damage fund.

Still, the adoption of the fund is a big win for poorer nations which have long called for financial compensation because they are often the victims of climate change – such as worsened floods, droughts, heat waves, famines, and storms – despite having contributed little to the pollution that is heating up the planet.

“This loss and damage fund will be a lifeline for poor families whose houses are destroyed, farmers whose fields are ruined, and islanders forced from their ancestral homes,” said Ani Dasgupta, president of the environmental think-tank World Resources Institute, minutes after the early morning approval was announced.

According to the agreement, the fund would initially draw on contributions from developed countries and other private and public sources such as international financial institutions. While major emerging economies such as China would not initially be required to contribute, that option remains on the table and will be negotiated over the coming years.

This is a key demand by the European Union and the United States, who argue that China and other large polluters currently classified as developing countries have the financial clout and responsibility to pay their share. The fund would be largely aimed at the most vulnerable nations, though there would be room for middle-income countries that are severely battered by climate disasters to get aid. 

The developed world still has not kept its 2009 pledge to spend $100bn a year in other climate aid – designed to help poor nations develop green energy and adapt to future warming. “In many ways, we’re talking about reparations,” said University of Maryland Environmental Health and Justice Professor Sacoby Wilson.

It did not contain a reference requested by India and some other delegations to the phasing down use of all fossil fuels. It instead called on countries to take steps toward the phasedown of unabated coal power and phase-out of inefficient fossil fuel subsidies as agreed at the COP26 Glasgow Summit.

The draft also included a reference to low-emissions energy, raising concern among some that it opened the door to the growing use of natural gas – a fossil fuel that leads to both carbon dioxide and methane emissions. Norway’s Climate Minister Espen Barth Eide said that his team had hoped for a stronger agreement. “It does not break with Glasgow completely, but it doesn’t raise ambition at all,” he said.

Tags : countries United Nations climate summit Egypt agreement Global Warming World Resources Institute