At COP27, poorer countries are securing a fund for climate damage

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The deal at the COP27 summit in this Egyptian seaside town awards a victory to poorer countries that have demanded that money since the first UN climate treaty was signed three decades ago.

Other provisions of the broader agreement, reached early Sunday morning in this Egyptian seaside town, left negotiators from wealthy countries disappointed in their efforts to cut greenhouse gas emissions faster. Rich countries managed to keep an agreement on emissions reductions reached in Glasgow last year after major developing countries tried to water it down, but failed to make any new commitments.

Sunday’s accord summit also urges wealthy governments to review multilateral development banks so that those institutions can increase their funding to developing countries for renewable energy projects and infrastructure to adapt to the impacts of climate change. This meets long-running criticism from developing countries that climate funds from institutions such as the World Bank are too difficult to access and have too high interest rates.

The agreement’s most consistent provision would earmark money for what’s known as loss and damage: when rising seas, more powerful storms and other impacts most scientists associate with climate change cause destruction that is sudden or potentially irreparable.

Negotiators representing developed and developing countries agreed to set up a fund in the final hours of the summit, defying expectations that they would make that move amid opposition from the US and other wealthy nations. The fund would target poorer countries deemed most vulnerable, a key demand from rich countries that didn’t want money flowing to China and other higher-income countries considered developing economies under the UN’s climate treaty.

The creation of a new fund was a rallying cry for a coalition of developing countries stretching from small island states like Barbados to low-lying and densely populated Bangladesh. These countries are believed to be most at risk from climate change, but they have emitted a small percentage of the greenhouse gases that scientists say have been warming the planet since the start of the industrial age.

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The magnitude of Pakistan’s monsoon rains and floods this year, with an estimated cost of $30 billion, gave impetus to their campaign. Pakistani officials blamed climate change, and some scientists say this was likely a contributing factor.

“This COP has taken an important step towards justice,” said UN Secretary-General António Guterres. “Obviously this will not be enough, but it is a much-needed political signal to restore the broken trust.”

The decision leaves open the possibility that China, oil-rich Persian Gulf states and other higher-income developing countries could contribute to the fund or provide money for other efforts to compensate for loss and damage. The agreement creates a committee charged with “identifying and expanding funding sources” and figuring out other details over the next year. Officials expect these decisions to be the subject of fierce debate in the coming months.

“What we wanted to get out of this COP was a political decision to have a fund funded by developed countries,” said Vicente Paolo Yu, a negotiator for the Philippines.

Delegates from China, Saudi Arabia and elsewhere in the developing world say they are not required to contribute money. The 1992 UN Climate Convention designates them as countries that should receive money from rich countries to respond to climate change. The US, Europe and other rich countries say that division no longer makes sense given China’s rapid economic growth over the past three decades and the enormous wealth that the oil states in the Persian Gulf have amassed.

Wealthy countries have long resisted the creation of a fund, fearing that their governments and companies risk litigation if they agree to make payments.

A senior Biden administration official said Saturday’s deal would not create legal liability.

How much any given event can be attributed to global warming is not clear. Some climate scientists are now weighing how much climate change affects the likelihood of a specific event occurring, as part of the emerging field of weather attribution research. Climate change is increasing the frequency and severity of droughts, heat waves and other extreme weather events in many regions of the world, according to the latest UN climate science report.

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Developed country negotiators spent the final day of the summit rebuffing an attempt by major emerging economies to reverse an agreement reached at last year’s Glasgow climate summit. That deal pushed governments to strengthen their emissions targets this year in hopes of meeting the climate goals of the Paris agreement. They call on governments to limit the temperature increase to well below 2 degrees Celsius and no less than 1.5 degrees compared to the pre-industrial era. The UN says current plans put the world on track for a warming of about 2.5 degrees.

Few developing countries followed suit. On the last day of the Sharm El Sheikh summit, Egyptian officials leading the talks released a draft agreement with text written by major developing countries that would have prevented countries from strengthening their emissions targets for the next decade. European negotiators threatened to walk away.

The final agreement largely retains the text of the Glasgow agreement. But it does not contain measures that rich countries, especially those of the European Union, are looking for that go beyond the Glasgow Pact to keep the 1.5 degree climate target within reach. European officials wanted a commitment to reaching maximum global emissions by 2025, a step scientists say is necessary to limit warming to 1.5 degrees. That language did not survive the negotiations.

“What we have in front of us is not enough as a step forward for people and the planet,” said Frans Timmermans, the EU’s climate commissioner. “It’s not enough additional effort from major emitters to increase and accelerate their emissions reductions.”

Numerous questions remain about how the damage fund will work and whether it can act quickly to help countries most scientists believe have been affected by climate change. As the largest greenhouse gas emitter over time, the US is expected to lead efforts to provide climate finance to the developing world. But all funds must be approved by the US Congress, where the effort is likely to meet Republican opposition.

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Nevertheless, the negotiators see the agreement as a welcome change. The Russian invasion of Ukraine rocked energy markets and created geopolitical tension ahead of the negotiations. The two largest emitters in the world, China and the US, were not even in talks to enter the conference due to disputes over Taiwan.

US climate envoy John Kerry managed to reconnect with his Chinese counterpart during the conference.

Then a burst of Covid-19 infections reached the top. Mr Kerry tested positive for the virus, his spokeswoman said, forcing him to self-isolate and work by phone with his team and negotiators from other countries. His spokeswoman said his symptoms were mild.

A breakthrough in talks came Thursday evening when the EU said it was ready to set up the fund, but on the condition that it target the most vulnerable developing countries and that wealthier developing countries contribute.

Egyptian officials on Saturday called a meeting of negotiators from the Group of 77 — representing 132 developing countries — the EU, the US and the Alliance of Small Island States, or Aosis. The Group of 77 negotiators pushed for a proposal for a loss-and-damage fund that would potentially provide money to all developing countries, even wealthier ones like China, not just the most vulnerable countries that are members of Aosis.

European negotiators asked if that was the position of Aosis, whose members are also members of the Group of 77. The Maldives Environment Minister, representing Aosis, asked for a 30-minute break to discuss the matter with the Group of 77 to be discussed.

Negotiators from the two groups returned to the room and said they were ready to support a fund that would target particularly vulnerable countries, as the EU wanted.

—Chao Deng and Summer Said contributed to this article.