Eventually the agreement was reached. The final plenary of the climate conference held in Egypt made the pact to establish a “Loss and Damage” fund to deal with the worst effects of extreme weather events in the most vulnerable countries. However, the consensus sidesteps new commitments by countries to step up cuts in gas emissions and limit use of fossil fuels that cause global warming.
The agreement to sponsor this fund is a historic victory for many developing and least developed countries (including many island nations that are suffering devastating damage) affected by the effects of the climate crisis and have supported this demand for years.
The resolutions adopted at the summit emphasize combating the devastation caused by the climate crisis in vulnerable countries; but they contribute little to action to address the causes of global warming and the need to tackle it at its roots. Reference is made to the target of stopping global warming at 1.5°C; but soulless and without accompanying implementation of plans to close the current emissions gap.
António Guterres argues that the new “loss and damage” repair fund will save lives and property
For this reason, European Commission (EC) Executive Vice-President Frans Timmermans said he was “disappointed” that he had not achieved that all of this was accompanied by “strong language” on emissions reductions. “To fight climate change, it is necessary that all financial flows support the transition to a low-carbon economy: the EU came here to get a strong language and we are disappointed that we didn’t get it,” he stressed.
EU President Ursula von der Leyen said the COP27 deal in Sharm el Sheikh was “a small step towards climate justice” but warned that “much more is needed for the planet”.
However, climate justice activists portray it as a success because for years they have been calling for a solidarity response from the industrialized world in the form of fair financial compensation as a counterbalance to extreme weather events (droughts, forest fires, floods, etc.) that nations are facing, threatened by emissions from the industrialized world.
So far, developed nations have shunned this hot potato to avoid taking “accountability” and understand that the fund should simply be used to repair and restore services and equipment in the countries most tragically hit by these devastating events became. His concern was not to obtain any legal “legal responsibility”, which would open the floodgates to claims for damages.
The new fund will “encourage its donors to help save lives and livelihoods in the face of climate change-related disasters,” the United Nations Secretariat enthusiastically welcomed in its evaluation of this new aid agency. However, many background details still need to be worked out. Therefore, a new committee will be created that will outline the proposal and make recommendations for consideration at the next climate conference (November-December 2023). In the end, the ‘mosaic solution’ formula prevailed, as called for by the EU, among others, which advocated resorting to new financial instruments to compensate for the damage.
For this reason, it is agreed to mobilize “new and additional resources” in such a way that “sources, means, processes and initiatives” would flow inside and outside the climate convention, the agreement says. This committee must propose institutional changes (modalities, structure…), identify these new sources of funding, ensuring coordination and complementarity with the existing funding.
Von der Leyen: “It’s a small step towards climate justice, but the planet needs a lot more”
The intention of the EU is that states that should no longer be considered “developing countries” (such as China, Arabia, Kuwait or the United Arab Emirates) also make a contribution. We’ll have to see if he succeeds. Agreement on this point was facilitated when the US, which had opposed this fund for years, decided not to block it, gave way and opened the floodgates to its creation, accepting its discussion on the agenda at the beginning of the summit.
“The announcement brings hope to vulnerable communities around the world struggling to survive climate stress. And it gives some credibility to the COP process,” said Sherry Rehman, Pakistan’s climate minister, who suffered from devastating floods this year. Rehman hoped the fund would go to countries on the front lines of the climate crisis.
The establishment of the fund “sent a warning signal to us polluter that they can no longer get away with destroying the climate,” said Harjeet Singh, head of global policy strategy at Climate Action Network International. “From now on, they will have to pay for the damages they cause and will be responsible for the people who are exposed to severe storms, devastating floods and rising sea levels,” he added.
The reality is that the fund now lacks tangible resources and there is no guarantee that rich countries will spend anything to match the rising costs of weather disasters on communities least able to cope. In 2009 (Copenhagen Summit), world governments agreed that rich countries would provide $100,000 million annually in climate finance to developing countries through 2020, and that amount remains at $83,000 million according to the OECD.