COP27 approves historic climate change compensation fund

The UN climate conference (COP27) approved this Sunday the creation of a loss and damage fund for countries “particularly vulnerable” to climate change, a historic request from the poorest countries.

After more than 24 hours of grueling deliberation, the delegations also agreed to “continue efforts to limit temperature rise” towards a “rapid, deep and sustainable” reduction in greenhouse gas emissions. planet) to 1.5ºC”.

However, the final declaration was criticized by UN Secretary General Antonio Guterres and the European Union (EU) as being unpretentious.

Around 200 members of COP27 had to negotiate until the early hours of Sunday to reach a final textual agreement, which sparked mixed reactions.

This was the end of a troubled climate conference under Egypt’s presidency, which has been criticized by the EU and other participants for its alleged lack of transparency.

Despite the pleasant atmosphere in the general assembly area, some delegates could not stand it and fell asleep in their seats, and the session continued with a break for the final discussion a few times.

transition committee

The idea of ​​loss and damage funding began to be negotiated three decades ago, when the most vulnerable countries began demanding compensation for climate change for which they were historically not responsible.

“The agreements reached at COP27 are a victory for the whole world. We show that we hear, see and respect those who feel undervalued,” the Alliance of Small Island States (AOSIS) said in a statement.

According to the text, the fund, which will not be operational immediately, will provide “predictable and adequate financing for particularly vulnerable developing countries”.

A transitional committee of 24 countries, three of which are from Latin America and the Caribbean, will over the course of a year detail the operation and financing of the initiative, with a view to gaining approval at COP28 by the end of 2023. year ago. the time frame provided so far.

Funding will basically fall on the rich countries that contribute the most to global warming.

But one of the working arms created this Sunday envisions “expanding funding sources”, which would leave the window open for countries like China to participate, a demand voiced by the European Union and Canada, among others.

Chinese representative Xie Zhenhua warned that developing countries’ participation in the fund should be “voluntary”.

The COP27 agreement also invites the World Bank and the International Monetary Fund to find “financing solutions”.

It is very difficult to calculate the direct and indirect impact of climate change, and some amounts are astronomical.

According to the Grantham Institute, losses could range from $290 billion to $580 billion per year by 2030.

further negotiations

The COP27 final statement also mentions the current world energy crisis, which was addressed in the two weeks of the COP, and highlights the “importance of strengthening the clean (source) energy combination” without forgetting the “national conditions” of each. country.

Despite lengthy negotiations, the text does not specifically address the need to abandon fossil fuels, as the EU and many countries want.

“Our planet is still in the emergency room. Now we need to drastically reduce emissions, and that’s an issue this COP isn’t addressing,” Guterres said.

“What’s ahead isn’t enough. It doesn’t offer the additional effort needed for major emitters to increase and accelerate their emissions cuts,” said Frans Timmermans, Vice-President of the European Commission.

Another issue discussed in Sharm el-Sheikh was the future of long-term financing for climate change adaptation and greenhouse gas emissions reduction.

In 2009, developed countries committed to release US$100 billion a year, starting in 2020, to help poor countries adapt to climate change and reduce their emissions, as well as kickstart the energy transition.

And the value of $100 billion out of reach should in principle be increased from 2025.

COP27 has chosen to defer decision on the matter to the climate conference scheduled for November 2024.