Delegates from nearly 200 counties at the COP27 climate summit agreed to create a damage and loss fund aimed at helping vulnerable countries cope with climate disasters, in a landmark deal early Sunday morning in Sharm el-Sheikh, Egypt.
The full COP27 agreement, of which the fund is a part, also reaffirmed the goal of keeping global warming to 1.5 degrees Celsius above pre-industrial levels – a key demand from many countries.
But while the agreement represents a breakthrough in a contentious negotiating process, it did not strengthen the language around reducing global-warming greenhouse gas emissions.
The final text also made no mention of phasing out fossil fuels, including oil and natural gas.
The final agreement marks the first time countries and groups, including long-time holdouts such as the United States and the European Union, have agreed to create a fund for nations vulnerable to climate disasters exacerbated by pollution disproportionately produced by wealthy, industrialized nations.
Negotiators and non-governmental organizations monitoring the talks hailed the creation of the fund as a major achievement, after developing nations and small island nations came together to step up pressure.
“The agreements reached at COP27 are a victory for our entire world,” Molwyn Joseph, president of the Alliance of Small Island States, said in a statement. “We showed those who felt neglected that we hear you, see you and give you the respect and care you deserve.”
The fund will focus on what can be done to support loss and damage resources, but does not include liability or compensation provisions, a senior Biden administration official told CNN.
The US and other developed countries have long sought to avoid such provisions that could open them up to legal liability and lawsuits from other countries. And in previous public remarks, US climate envoy John Kerry had said that loss and damage were not the same thing as climate reparations.
“‘Reparations’ is not a word or a term that has been used in this context,” Kerry said on a recent call with reporters earlier this month. He added: “We have always said that it is imperative for the developed world to help the developing world deal with climate impacts.”
Details of how the fund will operate remain unclear. The text leaves many questions about when it will be finalized and operational and exactly how it will be financed. The text also mentions a transitional committee to help clarify these details, but does not set specific future deadlines.
And while climate experts celebrated the victory, they also noted uncertainty about the future.
“This loss and damage fund will be a lifeline for poor families whose homes have been destroyed, farmers whose fields have been destroyed and islanders forced to flee their ancestral homes,” said World Resources Institute CEO Annie Dasgupta. “At the same time, developing countries are leaving Egypt without clear assurances about how the damage and loss fund will be supervised.”
The result for a fund came this year largely because the G77 bloc of developing countries remained united, exerting increased leverage for losses and damages compared to previous years, climate experts said.
“They needed to be together to force the conversation we’re having now,” Nisha Krishnan, director of resilience at the World Resources Institute Africa, told reporters. “The coalition argued because of that belief that we needed to stick together to achieve this – and to move the conversation forward.”
For many, the fund represents a years-long hard-fought victory, pushed over the finish line by the global attention paid to climate disasters like Pakistan’s devastating floods this summer.
“It was like a big build-up,” former US climate envoy Todd Stern told CNN. “This has been around for quite some time and it’s becoming more and more burdensome for vulnerable countries because there’s still not a lot of money being spent on it. As we can see, the real effects of climate change disasters are becoming more and more intense.”
Global scientists have warned for decades that warming must be limited to 1.5 degrees above pre-industrial levels – a limit that is fast approaching as the planet’s average temperature has already risen to around 1.1 degrees.
Beyond 1.5 degrees, the risk of extreme drought, fires, floods and food shortages will increase dramatically, scientists say in the latest report by the UN’s Intergovernmental Panel on Climate Change (IPCC).
But while delegates reaffirmed the goal of keeping global warming to 1.5 degrees Celsius, climate experts expressed frustration at the lack of reference to fossil fuels or the need to phase them out to prevent a rise in global temperatures . As was the case at last year’s Glasgow summit, the text calls for the phasing out of renewable energy from coal and “phasing out inefficient fossil fuel subsidies”, but does not go further than calling for the phasing out of all fossil fuels. including oil and natural gas.
“The influence of the fossil fuel industry was found everywhere,” Laurence Tubiana, CEO of the European Climate Foundation, said in a statement. “The Egyptian Presidency drafted a text that clearly protects the oil and gas states and the fossil fuel industries. This trend cannot continue in the UAE next year.”
It took some dramatic action to even hold the 1.5 degree figure set in Glasgow last year.
On Saturday, EU officials threatened to walk out of the meeting if the final deal fails to ratify the goal of limiting warming to 1.5 degrees Celsius above pre-industrial levels. In a carefully choreographed press conference, EU Green Deal czar Frans Timmermans, flanked by a full line-up of ministers and other top officials from EU member states, said “no deal is better than a bad deal”.
“We don’t want 1.5C to die here and today. This for us is completely unacceptable,” he said.
In addition to the final agreement, the summit brought many other important developments, including the resumption of formal climate talks between the US and China – the world’s two largest emitters of greenhouse gases.
After China froze climate talks between the two countries this summer, US President Joe Biden and Chinese President Xi Jinping agreed to restore US-China communications when they met last week at the G20 summit in Bali , paving the way for US climate envoy John Kerry and his Chinese counterpart Xie Zhenhua to formally meet again.
“Without China, even if the U.S. is moving toward a 1.5 degree program, which we are if we don’t have China, no one else can achieve that goal,” Kerry told CNN last week.
The two sides met during the second week of the COP, trying to pick up where they left off before China suspended the talks, according to a source familiar with the discussions. They focused on specific action points, such as strengthening China’s plan to reduce methane emissions – a potent greenhouse gas – and its overall emissions target, the source said.
Unlike last year, there was no major, joint climate announcement from the two countries. But the resumption of official communication was seen as an encouraging sign.
Li Shuo, Beijing-based global policy adviser for Greenpeace East Asia, said this COP “saw extensive exchanges between the two sides, led by Kerry and Xie.”
“The challenge is that they have to do more than talk, [and] he must also lead,” Suo said, adding that the restarted formal dialogue “helps avoid the worst outcome.”
