COP27 agrees landmark ‘loss and damage’ fund to compensate developing countries for climate impacts

A landmark deal to create a ‘loss and damage’ fund to pay poorer countries hit by the impacts of the climate crisis has been reached at a UN summit, capping a decades-long struggle between activists for the climate and developing countries.

The decision marked a breakthrough in climate negotiations, where for years developing countries have pressed wealthier countries to provide some form of compensation for droughts, wildfires, floods and other increasing climate impacts they have faced due to global warming emissions which have mostly come from the wealthier corners of the world.

There was exhausted applause as nearly 200 countries accepted the new fund at the Cop27 summit in Egypt, with the loss and damage agreement passed in a delayed meeting that began soon after. 4 a.m. local time. “On African soil, the voice of the most affected communities has finally been heard,” tweeted the Egyptian presidency of the Cop27 talks.

Rich countries, led by the United States, have long blocked the idea of ​​a loss and damage fund, fearing they could be held legally responsible for billions of dollars in debt. But the new deal makes it clear that there will be no legal liability, although other details of the fund will have to be worked out by a new committee which will report next year.

Sherry Rehman, the climate minister of Pakistan, which suffered devastating floods this year, said she looked forward to the fund being fully operational to help those on the front lines of the climate crisis. “This announcement offers hope to vulnerable communities around the world struggling to survive in the face of climate stress. And lends some credibility to the Cop process,” she said.

As the two-week Cop27 talks drew to a close, the European Union said it accepted the idea of ​​a fund for loss and damage, while insisting that the money be channeled to the most vulnerable countries, excluding China, which is still classified as such. in the UN climate negotiations. The United States, a longtime opponent of such a fund, relented, ushering in a moment that climate activists had hoped for when the issue was put on the agenda at the start of the summit.

The creation of the fund “sent a warning shot to polluters that they can no longer remain unscathed from their climate destruction,” said Harjeet Singh, head of global policy strategy at Climate Action Network International. “Now they will have to pay for the damage they cause and be held accountable to the people who face super-powerful storms, devastating floods and rising seas.”

“Countries must now work together to ensure the new fund can become fully operational and respond to the most vulnerable people and communities facing the height of the climate crisis.”

The creation of the fund does not yet come with money and there is no guarantee that rich countries will pay out anything commensurate with the rising costs of climate disasters in communities least able to cope. In 2009, governments around the world agreed that rich countries would provide $100 billion a year in climate finance to developing countries by 2020, but that has yet to materialize.

However, the adoption of the loss and damage fund at COP27 was hailed as a potential turning point in which the vast inequalities of the climate crisis were laid bare and acknowledged.

“This is a big win for climate justice that gives hope to millions of people in the Global South who are on the front lines of a rapidly worsening climate crisis and who are not their doing,” said Rachel Cleetus, policy director at the Union of Concerned Scientists.

Nabeel Munir, Pakistani diplomat and chief negotiator for the G77 group of developing countries, told the Guardian: “This is a historic moment. [It’s the] the culmination of 30 years of work and the start of a new chapter in the pursuit of climate justice. A beacon of hope for countries hardest hit by shutdowns and climate-induced damage.