COP27 Reaches Last Minute Agreement on ‘Loss and Damage’ Fund
The COP27 in Egypt closed on 20 November 2022 with a breakthrough agreement to provide ‘Loss and Damage’ funding for vulnerable countries deeply affected by #ClimateChange.
The UN Climate Change Executive Secretary, Simon Stiell prefers to look at the bright side and qualified the ‘Loss and Damage’ Fund as an “outcome that moves us forward.”
“We have determined a way forward on a decades-long conversation on funding for loss and damage – deliberating over how we address the impacts on communities whose lives and livelihoods have been ruined by the very worst impacts of climate change.”
Simon Stiell, UN Climate Change Executive Secretary
Pressured by G77, the EU Vice-President, Frans Timmermans, finally agreed to set up the ‘Loss and Damage Fund.’
“We were reluctant about a fund, it was not our idea to have a fund. My reluctance was because I know from experience it takes time before a fund can be established, and more time before it is filled, whereas we have existing instruments. I really believe we could move faster with existing instruments [for climate finance]. But since they [the G77] are so attached to a fund, we have agreed.”
Frans Timmermans, EU VP
The COP27 delivered the Sharm el-Sheikh Plan which is a roadmap towards a global low-carbon economy. The plan estimates that global decarbonisation programme will necessitate funding of USD 4-6 trillion annually. However, during the COP in 2020, developed nations pledged to mobilize USD 100 billion annually to fight Climate Change and that has yet to materialise.
COP27 participants also agreed to establish a ‘Transitional Committee’ to come up with recommendations on funding matters for COP28 next year. The first meeting for the ‘Transitional Committee’ is scheduled to take place before end of March 2023.
“The work that we’ve managed to do here in the past two weeks, and the results we have together achieved, are a testament to our collective will, as a community of nations, to voice a clear message that rings loudly today, here in this room and around the world: that multilateral diplomacy still works…. despite the difficulties and challenges of our times, the divergence of views, level of ambition or apprehension, we remain committed to the fight against climate change…. we rose to the occasion, upheld our responsibilities and undertook the important decisive political decisions that millions around the world expect from us.”
Sameh Shoukry, COP27 President
Former President of Ireland, Mary Robinson, remained hopeful and optimistic : “If adopted, this could well ignite bold reform of the wider international financial system so multilateral development banks (MDBs) open their coffers for those in need of loss and damage financing. If this text is agreed at COP27 it not only delivers a UNFCCC answer to loss and damage finance, it could initiate the restructuring of international financial architecture to meet today’s global challenges.”