COP27: Summit agrees on climate fund for ‘loss and damage’ in landmark deal


Sharm El Sheikh, Egypt
CNN

Delegates at the United Nations Climate Change Summit COP27 agreed early Sunday morning in Sharm el-Sheikh, Egypt, on a provision to establish a loss and damage fund.

However, the delegation lacked the full draft text of the agreement as members from Switzerland asked for more time to review the full document, which was released minutes before the final plenary session.

The summit is currently suspended for 30 minutes while members review the text.

This is a breaking story and will be updated.

For the second year in a row, the marathon talks dragged on well past their scheduled end as the countries tried to negotiate tougher talk about phasing out fossil fuels, including oil and gas, rather than just coal, according to many NGOs monitoring the talks.

Progress has been made elsewhere. The countries reached a tentative agreement on Saturday to establish a “loss and damage” fund for nations vulnerable to climate disasters, according to negotiators with the European Union and Africa, as well as non-governmental organizations monitoring the talks.

The United States is also seeking to sign an agreement on a loss and damage fund, Whitney Smith, a spokeswoman for U.S. climate envoy John Kerry, confirmed to CNN.

The fund will focus on what can be done to support loss and damage resources, but does not include liability or compensation provisions, a senior Biden administration official told CNN. The US and other developed countries have long sought to avoid such provisions that could open them up to legal liability and lawsuits from other countries.

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If completed, it could be a major victory in negotiations on the contentious issue – and is seen as a reversal since the US has resisted efforts to create such a fund in the past.

All is not settled yet, with an EU source directly involved in the talks warning earlier on Saturday that the agreement is part of a larger COP27 agreement that must be ratified by nearly 200 countries. Negotiators worked through the night into Sunday. And other issues, including talk of fossil fuels, remain, according to several NGOs monitoring the talks.

But progress has been made, the source said. In a debate on Saturday afternoon Egyptian time, the EU managed to get the G77 bloc to agree on a fund for vulnerable states, which could pave the way for a deal on loss and damage.

If the deal is finalised, it would be a major breakthrough on the international stage and far exceed expectations for this year’s climate summit, with some delegates in a jubilant mood.

Countries that are most vulnerable to climate disasters, but have contributed little to the climate crisis, have struggled for years to secure a loss and damage fund.

Developed countries, historically the largest emitters of planet-warming pollutants, have been reluctant to sign on to a fund they believe could open them up to legal liability for climate disasters.

Details of how the fund will operate remain murky. The preliminary text says the fund will be established this year, but many questions remain about when it will be completed and operational, climate experts told reporters on Saturday. The text mentions a transition committee to help work out these details, but does not set any future timelines.

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“There are no guarantees on the timeline,” Nisha Krishnan, director of Africa’s resilience at the World Resources Institute, told reporters.

Advocates for the Loss and Damage Fund welcomed the progress, but noted that the project is not ideal.

“We’re happy with this outcome because it’s what developed countries wanted — although not everything they came here for,” Erin Roberts, founder of the Loss and Damage Collaborative, said in a statement to CNN. “Like many, I was prepared to expect very little from the process. While the creation of the fund is undoubtedly a win for developing countries and those on the front lines of climate change, it is an empty shell without funding. It’s too little, too late for those fighting climate change. But we will work on it.”

At COP27, demand for a loss and damage fund from developing countries, the G77 bloc and activists reached a fever pitch, driven by a number of major climate disasters this year, including devastating floods in Pakistan.

The conference first ended on Saturday and continued into the early hours of Sunday morning, with negotiators still hammering out details as workers dismantled the site around them. There was a real sense of fatigue and frustration in places. Complicating matters is the fact that Kerry, the top US climate official, has been distancing himself and working by phone rather than face-to-face after a recently confirmed Covid test.

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And earlier on Saturday, EU officials threatened to walk out of the meeting if the final agreement did not confirm the goal of limiting warming to 1.5 degrees Celsius above pre-industrial levels.

Scientists around the world have warned for decades that warming must be limited to 1.5 degrees, a limit that is fast approaching as the planet’s average temperature has already risen to around 1.1 degrees. Above 1.5 degrees, the risk of extreme droughts, wildfires, floods and food shortages will increase significantly, scientists say in the latest report by the UN’s Intergovernmental Panel on Climate Change (IPCC).

At a carefully choreographed press conference on Saturday morning, EU Green Deal czar Frans Timmermans, joined by a whole host of EU member state ministers and other top officials, said “no deal is better than a bad deal”.

“We don’t want 1.5 Celsius to die here and today.” This is completely unacceptable to us,” he said.

The EU has made clear that it is prepared to agree to a loss and damage fund, a significant change from a week ago, but only in exchange for a firm commitment to the 1.5 degree target.

As the sun set in Sharm el-Sheikh on Saturday night, the mood turned to cautious jubilation as negotiating teams began to hint that a deal was on the way.

But, as is always the case with top-level diplomacy, officials were quick to point out that nothing is really agreed until the last tooth falls.

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