The final agreement reached at the United Nations COP27 climate summit in Egypt established a “loss and damage fund” to assist developing countries in dealing with extreme weather.
History was made today at #COP27 in Sharm El-Sheikh as parties agreed to the establishment of a long-awaited loss and damage fund for assisting developing countries that are particularly vulnerable to the adverse effects of climate change. pic.twitter.com/spmWVUjTva
— COP27 (@COP27P) November 20, 2022
It is a big win for nations, which have long called for cash, sometimes viewed as reparations because they are often the victims of climate-worsened floods, droughts, heat waves, famines, and storms despite having contributed little to the pollution that heats the globe.
According to the agreement, the fund would initially draw on contributions from developed countries and other private and public sources, such as international financial institutions.
While major emerging economies such as China would not initially be required to contribute, that option remains on the table and will be negotiated over the coming years.
This is a key demand by the European Union and the United States, who argue that China and other large polluters currently classified as developing countries have the financial clout and responsibility to pay their way.
The fund would primarily aim at the most vulnerable nations, though there would be room for middle-income countries severely battered by climate disasters to get aid.
#COP27 has taken an important step towards justice.
I welcome the decision to establish a loss and damage fund and to operationalize it in the coming period.
Clearly this will not be enough, but it is a much-needed political signal to rebuild broken trust. pic.twitter.com/5yhg5tKXtJ
— António Guterres (@antonioguterres) November 20, 2022
What is COP27?
COP27 is the 27th meeting on climate change. The first one was held in Berlin in 1995. The COP meets every year unless the parties decide otherwise.
There are now 197 parties to the United Nations Framework Convention on Climate Change, all of whom have signed the Paris Agreement, the first global climate pact.
The Paris Agreement
Signed at COP21 in 2015, the Paris Agreement’s goal is to limit global warming to below two degrees Celsius, preferably to 1.5 degrees Celsius, compared to pre-industrial levels.