COP27 strikes deal over damage fund

Vulnerable countries and environmental experts said the agreement on L&D acknowledges the impact of climate change, particularly since the warming of 1.1°C till now has led to large disruptions on lives and livelihoods across several parts of the world

Negotiators from around the world salvaged climate talks from the brink of collapse late on Saturday, sealing a historic agreement on creating a “loss and damage” (L&D) fund to help vulnerable nations deal with the impact of global warming, a key victory for developing countries after days of hard parleys that pitched the Global North against the South.

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Vulnerable countries and environmental experts said the agreement on L&D acknowledges the impact of climate change, particularly since the warming of 1.1°C till now has led to large disruptions on lives and livelihoods across several parts of the world.

At the same time, however, the deal fell short of what many said could have been a more ambitious stance on reining in emissions, and did not include a wider target on all fossil fuels, as proposed by India and several other nations.

“It’s a historical day in climate change negotiations when it has been acknowledged after thirty years that increasing disasters causing loss and damage (both economic and non-economic) affecting communities/countries which are least responsible for it are caused due to historic cumulative emissions. Efforts have begun by creating a funding arrangement to address such a facility,” said Kunal Satyarthi, joint secretary, National Disaster Management Authority and India’s lead negotiator on loss and damage.

From India’s perspective, the victories included the climate conference’s (COP27) endorsement of the sustainable lifestyle mission, and a clause regarding energy transitions, which did not single out any particular fossil fuel.

“Our proposal on sustainable lifestyles and consumption has been taken on board and on cover decision. It was conceived in India’s Lifestyle For Environment (LiFE) movement. We supported the loss and damage facility and suggested that the fund benefit all developing countries. We played a constructive role and the outcome is good,” said Bhupender Yadav, Union environment minister, at Sharm El Sheikh in Egypt, where COP27 was held.

An Indian delegate, who asked not to be named, added: “We have achieved a good breakthrough in just energy transitions because it talks about diversifying energy mixes and doesn’t single out any one fossil fuel. It is important for us.”

Earlier, at the plenary after the COP27 cover text was drawn up, Yadav said the “world has waited far too long for this”, referring to the L&D facility, while congratulating the COP27 presidency.

“For most developing countries, just transition cannot be equated with decarbonization, but with low-carbon development. Developing countries need independence in their choice of energy mix, and in achieving the SDGs (sustainable development goals),” he said.

The decision on L&D states that keeping the global average temperature rise to below 1.5°C will be essential to limiting future loss and damage, and expressed alarm that Working Group II to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change has concluded that the gravity, scope and frequency of loss and damage will continue to increase with every additional fraction of a degree of temperature increase.

The talks decided a transitional committee will decide the modalities — such as how the payouts will be made under the fund and the sources — which will be considered at COP28 to be held in November or December, 2023.

The Transitional Committee will have 23 members, comprising 10 from developed countries and 13 from developing countries.

One of the contentions on the L&D issue was that developed countries were pushing to expand the donor base to include high income countries and emerging economies like China and India, and wanted to narrow the beneficiaries to only most vulnerable (island nations and least developed countries). EU also sought to link the formation of the L&D facility to mitigation efforts such as peaking global emissions before 2025; reaffirming the call to reduce by 2030 non-carbon dioxide greenhouse gas emissions like methane; pushing all parties to urgently increase their efforts to closing the remaining mitigation gap to pathways consistent with 1.5 degrees; accelerating the phase down of unabated coal power as soon as possible and submitting roadmaps towards this aim, HT reported on November 18.

But, following overnight negotiations and efforts to find compromise, the issue of source of funding has now been moved to the transitional committee.

The Sharm El Sheikh Implementation Plan recognizes the impact of climate change on the cryosphere and the need for further understanding of these impacts, including of tipping points. This is possibly the first time a cop cover decision, a legal document mentions climate tipping points approaching beyond which adaptation will not be possible, said experts.

Representatives of the European Union and the UK were disappointed with the outcome. They had pushed for consensus on peaking global emissions before 2025; accelerating the phase down of unabated coal power and submitting roadmaps to that effect; phasing out unabated fossil fuels and efforts to start the conversation on expanding the donor base to include high income and emerging economies — proposals that were thwarted.

“Friends are only friends. If they also tell you things you might not want to hear. This is the make-or-break decade. But what we have in front of us is not enough of a step forward for people and that it is not big enough efforts for major emitters to increase and accelerate their emissions cuts. It does not bring a higher degree of confidence that we will achieve the commitments made on the Paris Agreement and in Glasgow last year. It does not address the growing gap between climate science and climate policies,” said EU Climate Policy chief Frans Timmermans in a long and emotive speech at the closing plenary.

UK’s COP26 president Alok Sharma also said the Sharm El Sheikh decision is weak on many counts. “Indeed, those of us who came to Egypt to keep 1.5 of these alive and to respect what every single one was to bring to the basket, had to fight relentlessly to hold the line. We’ve had to battle to build on one of the key achievements of Glasgow, the call of all parties to revisit and strengthen their nationally determined contributions. We have ultimately reiterated that, and it is critical that commitment is delivered by all of us. But we also want to take definitive steps forward. We joined with many parties and proposed a number of measures that would have contributed to emissions reductions like peaking before 2025 which science tells us is necessary, not in this text. Phase down coal, not in this text; phase out all fossil fuels not in the text,” he said.

Experts, however, saw UK’s and EU’s stance as being duplicitous. “The scolding on mitigation progress by the EU smacks of duplicity. Without steep declines in developed country emissions and substantial new climate finance, keeping to 1.5°C will require squeezing energy demand in poor countries. Lack of progress on providing finance adds insult to injury,” said Navroz Dubash, professor, Centre for Policy Research.

Dubash added that “the creation of a loss and damage fund signals that it is now impossible for countries to claim an ethical climate stance without supporting this agenda”.

“Post Sharm we face a serious reckoning on 1.5°C. Not enough cuts in the North, not enough money to accelerate and understandable unwillingness to compromise development in the South. Something has to give and it may be 1.5,” he added.

But some vulnerable countries saw the progress as encouraging, if not ideal. “We have literally exhausted all of our efforts here at COP27 to bring home the climate action commitments our vulnerable people desperately need. Our ministers and negotiators have endured sleepless nights and endless days in an intense series of negotiations, determined to secure the establishment of a loss and damage response fund, keep 1.5 alive, and advance ambition on critical mitigation and adaptation plans. But after the pain comes the progress. Today, the international community has restored global faith in this critical process that is dedicated to ensuring no one is left behind. The agreements made at COP27 are a win for our entire world,” said Molwyn Joseph, chair of Alliance of the Small Island States.

Antonio Guterres, the UN secretary general, said the COP27 resolution managed to uphold climate justice. “COP27 took place not far from Mount Sinai, a site that is central to many faiths and to the story of Moses, or Musa. It’s fitting. Climate chaos is a crisis of biblical proportions. The signs are everywhere. Instead of a burning bush, we face a burning planet. From the beginning, this conference has been driven by two overriding themes: justice and ambition. Justice for those on the frontlines who did so little to cause the crisis — including the victims of the recent floods in Pakistan that inundated one-third of the country. (And) ambition to keep the 1.5 degree C limit alive and pull humanity back from the climate cliff. This COP has taken an important step towards justice. I welcome the decision to establish a loss and damage fund and to operationalize it in the coming period,” he said.

COP27 was informally themed around implementation with a tagline ‘together for implementation’. But the climate crisis seemed to take a back seat as politics around energy, accountability and mitigation efforts to keep warming to under 1.5°C took centre stage.