Loss and damage fund gives hope to COP27 talks

SHARM EL-SHEIKH, Egypt – Negotiations

went deep into overtime on Saturday

at the United Nations COP27 climate talks, with major issues yet to be formally agreed by nearly 200 countries attending the vast conference in Egypt.

But in a potential breakthrough,

a compromise proposal to create a loss and damage fund for developing nations

might help end the deadlock on a key focus area of the talks, though sticking points remain in other areas.

Poorer nations have been insisting COP27 agree on the creation of a fund or financing mechanism to help them cope with irreparable loss and damage caused by increasingly severe climate impacts, with

the recent Pakistan floods

overshadowing the conference.

Severe floods, storms, droughts, as well as rising sea levels, are destroying lives and livelihoods in many countries around the world, with the poorest nations hardest hit. They need financial support for a crisis they say is not of their making.

It is not yet clear if all nations will accept the latest draft wording contained in a proposal from the COP27 Egyptian presidency.

In addition to a dedicated loss and damage fund, the draft suggests establishing new funding arrangements for assisting developing countries in responding to loss and damage, and providing and assisting in mobilising new and additional resources, including cash.

A new committee would be established to guide the new financing arrangements and the fund, for consideration and possible adoption by the COP28 climate conference in the United Arab Emirates next year, according to the draft text.

The two-week talks in the Red Sea resort of Sharm El-Sheikh were meant to wrap up on Friday but could now stretch into Sunday.

“Time is not on our side. We must all rise to the occasion,” COP27 president Sameh Shoukry told reporters on Saturday.

Rich nations, which are the most to blame for the greenhouse gas emissions fuelling the climate crisis, have long been wary of any formal loss and damage funding mechanism, especially anything that could be labelled as compensation payments.

But the European Union backed the idea of a fund at the talks in a breakthrough after previously expressing reservations.

Negotiators have also been concerned over the ambition of draft texts at the talks, fearing an outcome from Sharm El-Sheikh that will not advance global ambition to cut emissions.

At COP27, India called for a decision that all fossil fuels be phased down – not just coal, as was

agreed at COP26 in Glasgow last year.

The EU has backed India’s call, as have many vulnerable nations, who say a rapid shift away from burning fossil fuels will reduce the threat from climate change.

But the latest draft cover text, which contains the overarching political decisions for COP27, retains the same Glasgow Climate Pact language around phasing down unabated coal – meaning carbon emissions from burning coal are not captured.

The draft text makes no mention of oil or gas. It is not clear if all nations will accept this wording.

European Commission vice-president Frans Timmermans told a press conference on Saturday that the EU would “rather have no result than a bad result” and was willing to walk out of the negotiations altogether.

But he added that he still hoped for a good outcome.

“We need to move forward, not backwards and all (EU) ministers… are prepared to walk away if we do not have a result that does justice to what the world is waiting for – namely that we do something about this climate crisis,” he said.

The EU wants COP27 to have strong language on cutting emissions and to reaffirm the aspirational goal of limiting global warming to 1.5 deg C from pre-industrial levels.

The current draft retains the Glasgow Climate Pact language, reiterating that the impacts of climate change will be much lower at the temperature increase of 1.5 deg C, compared with 2 deg C, and resolves to pursue further efforts to limit the temperature increase to 1.5 deg C.

“The (draft) text does keep the 1.5 alive,” Mr Shoukry told reporters.

Under

the 2015 Paris climate agreement,

nations agreed to keep warming to well below 2 deg C and aim for 1.5 deg C.

The world has already warmed 1.2 deg C, and the UN climate science panel has said crossing the 1.5 deg C threshold risks unleashing far more severe climate change effects on people, wildlife and ecosystems.

Failing to include references to phase out all fossil fuels would represent a weakening from the Glasgow Climate Pact, some nations and non-governmental organisations have said, because it would mean no increase in ambition to tackle climate change over the past 12 months, despite this year’s record weather-related disasters.

And on the sidelines of COP27, there have been new fossil fuel deals and criticism that the talks have hosted hundreds of fossil fuel executives.

“An aspect that’s been deeply concerning is we’re hearing empty rhetoric about 1.5 deg C from some countries,” said Dr Rachel Cleetus, policy director with the Climate and Energy Programme at the Union of Concerned Scientists in Washington.

“What does it really mean to uphold 1.5 deg C? It means stopping your expansion of fossil fuel infrastructure.”