Historic ‘loss and damage’ fund adopted at COP27 climate summit

This year UNFCCC COP 27 was held in Egyptian Coastal city Sharm El Sheik in Egypt from 6th-20th of November 2022. UN Secretary-General António Guterres has opened the conference with a poignant speech in which he urged the nations to focus on global warming and its hazardous impacts further brought to light by the war in Ukraine and that the world is on a highway to climate hell with its foot on the gas pedal. “It is a defining issue of our age (climate change). It is the central challenge of our century. It is unacceptable, outrageous and self-defeating to put it on the back burner. Indeed many of today’s conflicts are linked to growing climate chaos….and the war in Ukraine has exposed the profound risk of our fossil fuel addiction,” he stated firmly during the opening speech.

After 2 intensive weeks of negotiations, and 37 extra hours, COP27 concluded with a historic decision to establish and operationalize a loss and damage fund, which goal is to help poor nations to cope with the extreme weather events caused by global warming. The agreement, reached in the early hours of Sunday morning by Government ministers and negotiators from nearly 200 countries, also reaffirmed efforts to limit global temperature rise to the crucial temperature threshold of 1.5 degrees Celsius above pre-industrial levels.

Welcoming the decision and calling the fund essential, UN Secretary-General António Guterres has said that more needs to be done to drastically reduce emissions now. “The world still needs a giant leap on climate ambition…The red line we must not cross is the line that takes our planet over the 1.5 degree temperature limit,” he stressed, urging the world not to relent “in the fight for climate justice and climate ambition we can and must win this battle for our lives” he concluded.

“I am pleased that COP27 has opened a new chapter on financing loss and damage, and laid the foundations for a new method for solidarity between those in need and those in a position to help,” European Commission President Ursula von der Leyen said in a statement.

“COP27 has kept alive the goal of 1.5C. Unfortunately however, it has not delivered on a commitment by the world’s major emitters to phase down fossil fuels, nor new commitments on climate mitigation,” she added.

The issue of loss and damage was first raised by climate-vulnerable countries 30 years ago. Only this year, thousands of people died and millions lost their homes in devastating floods in Bangladesh, Sudan and Pakistan. In East Africa, 50 million people are experiencing famine caused by the worst drought in 40 years. Around the world, at least half of the 59 million internal migrants in 2021 were displaced by the effects of climate change, according to the United Nations.

Madeline Diuof Sarr the chair of the Least Developed Countries Group on Climate Change represents 46 nations that are home to nearly one billion people.

“The people and communities I represent are those least responsible for carbon dioxide emissions — collectively contributing just 1.1% of global emissions in 2019. That is less than half the emissions from cars and light trucks in the United States alone. We are hit first and worst by climate change and are least equipped to respond. Those most responsible for global warming also have the greatest capacity to take action. Although the world’s richest 10% of people cause 50% of emissions, they also claim 52 % of the world’s wealth; the poorest 50% contribute around 10% of global emissions and receive about 8% of global income. Negotiators like me have been demanding action for 30 years.”

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-fuelled events such as storms and floods.

Even many of the more contentious issues were pushed into talks to be held next year, when a “transitional committee” will make recommendations for countries, 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.

Keeping commitments remains the most difficult test. Developing and poor countries urgently need financing to deal with the negative effects of climate change to which they have not contributed significantly. It should be noted here that funding is not a “privilege”, but rather a “right” for these countries. This financing can allow these countries to invest more in clean energy, and it can be a solution to open up new economic horizons and even eliminate the dilemma of unemployment from which they suffer.

Demonstrations for loss and damage compensation (Rabeb Aloui)