Cop27 reaches 'historic' deal on loss and damage fund

'We rose to the occasion,' says summit's president at closing plenary session

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After days of often tense negotiations, the UN climate summit in Egypt closed on Sunday with an agreement on how to tackle global warming and a milestone deal to create a dedicated fund to cover damages endured by vulnerable nations.

While the agreement on the fund won lavish praise as a “historic” deal, some countries criticised the summit's final statement for failing to commit to more ambitious goals. Many people have looked to the summit for ambitious targets and bold measures to arrest climate change.

The UAE, which will host the Cop28 summit next year, hailed the outcomes of the talks in Egypt.

“We must continue to work and maintain the spirit of ambition and co-operation … As we prepare in the UAE to chair the next Conference of the Parties from November 30 to December 12, 2023, we are committed to making every effort to support climate action and building on the results of Cop27,” the UAE Special Envoy for Climate, Dr Sultan Al Jaber, said in a statement on Twitter.

The summit in the Red Sea resort of Sharm El Sheikh was held against a backdrop of a deadly plethora of natural disasters blamed on climate change and growing economic hardships caused by the fallout of the Russia-Ukraine war.

The two-week talks looked to be on the brink of collapse at times, with delegates publicly squabbling over the creation of the “loss and damage” fund desperately sought by developing nations but which was initially opposed by richer countries.

Outside the summit's halls and conference rooms, hundreds of activists took full advantage of the leeway they were accorded at the venue to stage colourful and loud protests against fossil fuel, and a perceived lack of adequate action to save the planet.

Sunday’s deal on the loss and damage fund capped years of relentless lobbying by developing nations. Adding it to the agenda for the first time at Cop27 was a goal that had proved elusive for nearly three decades.

At the heart of the issue is that while rich nations are responsible for most gas emissions, developing nations that make a negligible contribution to global warming are the worst hit.

Its adoption at a plenary session early on Sunday drew applause from many delegates, who were joined by the Cop27 president, Egyptian Foreign Minister Sameh Shoukry. But the journey to its adoption over the past two weeks saw a flurry of scathing rhetoric from developing nations, reminiscent of debates over colonialism when western nations stood accused of shameless exploitation.

In his closing remarks, Mr Shoukry spoke of the difficulties of negotiations, but also struck a triumphant note about the successful conclusion of the summit.

“This is a testament to our collective will as a community of nations and that multilateral diplomacy still works,” he said. “We rose to the occasion.”

“Colleagues, it was not easy,” he added.

Mr Shoukry received a standing ovation before the plenary session heard more speeches, and the session lasted nearly five hours, wrapping up at 9am on Sunday.

Africa's climate struggle

Turning to the creation of the fund, Mr Shoukry said it was appropriate that it happened in Africa, where a cascade of natural disasters blamed on climate change happened this year, including floods in Nigeria and drought in the Horn of Africa.

In a recorded message, UN chief Antonio Guterres said the climate talks had “taken an important step towards justice” with the loss and damage fund.

“Clearly, this won't be enough, but it is a much-needed political signal to rebuild broken trust. The voices of those on the front line of the climate crisis must be heard.”

Lia Nicholson, representative of Antigua and Barbuda, said that “establishing this fund signals to the world that loss and damage will no longer solely be borne by those governments and people least responsible. Today is a step towards climate justice.”

Limiting global warming

The Cop27's final statement upheld the aspirational goal of limiting global warming to 1.5°C above pre-industrial levels.

Scientists say limiting warming to 1.5°C would safeguard the world against catastrophic climate change. However, some say countries are far from meeting this target and are possibly heading for 2.5°C rises under their current plans to reduce gas emissions and switch to renewable energy.

The text also included language on renewable energy for the first time, while reiterating calls to accelerate “efforts towards the phase-down of unabated coal power and phase-out of inefficient fossil fuel subsidies”.

The Alliance of Small Island States, comprises nations whose existence is threatened by the rise in sea levels, said the loss and damage deal was a “historic” agreement 30 years in the making.

“The agreements made at Cop27 are a win for our entire world,” said Molwyn Joseph, of Antigua and Barbuda, who chairs the association. “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.”

The fund will be geared towards developing nations that are “particularly vulnerable” to climate change, according to the text, reflecting language demanded by the EU, which had led opposition to the creation to the fund before it gave in to mounting pressure.

The 27-nation bloc had also wanted the fund's donors’ base to be broadened to include China, the world’s second biggest gas emitter after the US.

China is still categorised by the UN as a developing nation but is the world's second largest economy.

The final text on loss and damage left many details to be dealt with by a transitional committee, which will report to next year's climate meeting in the UAE.

However, it could be some time, perhaps years, before the fund is operational.

Pledges for loss and damage so far are negligible compared to the scale of the damage suffered by vulnerable countries. They include $50 million from Austria, $13 million from Denmark and $8 million from Scotland — small change when the World Bank has estimated the damage to Pakistan from flooding to be worth $30 billion.

Depending on how much the world reduces carbon emissions, loss and damage from climate change could cost developing nations anywhere between $290 billion to $580 billion a year by 2030, reaching $1 trillion to $1.8 trillion in 2050, according to UN research.

Beside the creation of the loss and damage fund, some were not so pleased with the summit's outcome.

“The European Union came here to get strong language agreed and we are disappointed we didn't achieve this,” the EU's climate chief Frans Timmermans told the closing session.

“What we have in front of us is not enough of a step forward for people and planet,” he said. “It doesn't bring enough added efforts from major emitters to increase and accelerate their emission cuts.”

The EU had threatened to walk away from the talks if it did not get better commitments on emissions. But in the end it did not block the final statement following marathon overnight talks.

Criticism for the Egyptian presidency's handling of the Sharm El Sheikh's summit also came from Alok Sharma, the UK Cop26 president.

“We wanted to take definitive steps forward. We joined with many parties to propose a number of measures that would have contributed to this. Emissions peaking before 2025, as the science tells us is necessary — not in this text. Clear follow through on the phase down of coal — not in this text. A clear commitment to phase out all fossil fuels — not in this text,” he said.

“Friends, I said in Glasgow that the pulse of 1.5 degrees was weak. Unfortunately, it remains on life support, and all of us need to look ourselves in the mirror and consider if we have fully risen to that challenge over the past two weeks.”

Aminath Shauna, the environment minister of the Maldives, the Indian Ocean archipelago battered by the effects of climate change, said the final statement fell short on setting new targets for mitigating global warming.

“We made it clear over the past two weeks that mitigation ambition was the cornerstone of our outcomes here at Cop27. I am disheartened we did not get there. Why are we trying to address loss and damage? Because we have failed on mitigation and adaptation.”

With reporting from agencies

Updated: November 20, 2022, 3:38 PM