COP27 Ends with Historic ‘Loss and Damage’ Fund but Leaves Fossil Fuels’ Future in Doubt
After prolonged negotiations, the United Nations concluded the COP27 climate summit on Sunday, November 20, by approving a “historic agreement” to establish a fund to finance the “loss and damage” vulnerable countries are suffering from climate change. However, no decisive decision was taken on the future of fossil fuels.
The deliberations required extending the conference, which was scheduled to conclude on November 18, by two more days to reach a settlement on controversial points regarding the loss and damage fund and other topics.
In a statement, the United Nations said the agreement to create a specific fund for loss and damage marked “an important point of progress.”
“We have determined a way forward on a decades-long conversation … over how we address the impacts on communities whose lives and livelihoods have been ruined by the very worst impacts of climate change,” said Simon Stiell, executive secretary of the United Nations Framework Convention on Climate Change (UNFCCC).
In a separate statement, Egypt’s conference presidency described it as a “historic step”.
According to the U.N. statement, governments also agreed to establish a “transitional committee” to make recommendations on how to put the new loss and damage fund into operation at COP28, to be held in the United Arab Emirates next year.
The first meeting of the transitional committee is scheduled to take place before the end of March 2023.
During COP27, held over more than two weeks in Egypt’s Sharm El-Sheikh, countries renewed their commitments to limiting the rise in global temperature to 1.5 degrees Celsius above pre-industrial levels, a goal set in the 2015 Paris Agreement on Climate Change. They also agreed to increase the actions taken to reduce greenhouse gas emissions, adapt to the inevitable effects of climate change, and strengthen the financing, technology, and capacity-building support needed by developing countries.
“We have determined a way forward on a decades-long conversation … 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, executive secretary of the United Nations Framework Convention on Climate Change (UNFCCC).
While the issue of “adaptation” was at the forefront of COP27’s concerns, the U.N. statement stressed that the main problems that developing countries have been facing for years may remain unsolved, in part because developed countries have failed to meet in full their previous commitments to provide $100 billion a year in climate financing.
The statement said that the Sharm El-Sheikh Implementation Plan, introduced earlier in the conference, noted that a global transformation to a low-carbon economy would require annual investments of at least $4 trillion to $6 trillion, and that this would need to involve governments, central banks, commercial banks, investors, and other financial actors.
The Future of Fossil Fuels
While the conference concluded with no clear decisions on ending fossil fuels, Simon Stiell said in the closing statement that the final agreement gave “reassurances that there is no room for backsliding.” It also provided “key political signals that indicate the phasedown of all fossil fuels is happening,” he added.
Observers who spoke to Al-Fanar Media said they were pleased with the breakthrough agreement on establishing a fund for loss and damage, but disappointed that the summit had not also made progress on phasing out fossil fuels, the main cause of global warming.
Jeni Miller, executive director of the Global Climate and Health Alliance, which brings together 130 health organisations around the world, said the loss and damage fund was an important step to protect people who have contributed least to carbon emissions yet have been the hardest hit by climate change.
However, Miller criticised the failure of countries to agree on a clear commitment to phasing out all types of fossil fuels.
Cutting emissions “is the most important step to avoid exceeding the dangerous rise in global temperature by 1.5 degrees Celsius. … Only the complete removal of fossil fuels would achieve the maximum health benefits from clean air and a sustainable healthy environment.”Jeni Miller, executive director of the Global Climate and Health Alliance
Cutting emissions “is the most important step to avoid exceeding the dangerous rise in global temperature by 1.5 degrees Celsius,” she said. Reducing emissions “also reduces loss and damage to people’s health and livelihoods,” she added. “Only the complete removal of fossil fuels would achieve the maximum health benefits from clean air and a sustainable healthy environment.”
Caroline Mair-Toby, executive director of the Institute for Small Islands, which studies countries at risk of being drowned by sea level rise, also said that establishing a loss and damage fund was a “very good start” but not enough.
“There is no solution but a commitment to reducing carbon emissions to achieve a fair, safe world,” she told Al-Fanar Media. “Otherwise, all efforts will be wasted.”
The Intergovernmental Panel on Climate Change (IPCC) has emphasized that limiting global warming to 1.5 degrees Celsius would require rapid, far-reaching and unprecedented changes in all aspects of society, including land, energy, industry, buildings, transport, and cities. Global net emissions of carbon dioxide would need to fall by about 45 percent from 2010 levels by 2030, and reach “net zero” around 2050, it says.
Fatima Yamin, communications advisor at Pakistan’s Ministry of Climate Change, whose country witnessed a major climate disaster, said in a statement to Al-Fanar Media that the establishment of the loss and damage fund was “a long overdue achievement in terms of achieving climate justice and protecting affected developing countries.”
The fund is an acknowledgment that some countries are more vulnerable than others, Yamin said. It confirms, she added, that inequality in climate risk tolerance is not just a result of poor infrastructure capabilities, but mainly a result of high greenhouse gas emissions and insufficient efforts by rich countries, which are responsible for the bulk of emissions, to prioritise mitigation in their climate action.
Likewise, Michael Okumu, Kenya’s deputy director of climate-change negotiations at COP27, told Al-Fanar Media that the agreement on loss and damage represents important progress towards reducing the misery and destruction caused by the effects of climate change. “Unfortunately, Africa is the most vulnerable and affected party,” he added.
According to the U.N. statement, a number of important announcements were made during COP27. Among them, the secretary-general of the United Nations, António Guterres, announced a $3.1 billion plan to provide early warning systems over the next five years to protect all people from climate-related disasters.
The Group of Seven industrialised nations (Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States), in partnership with the Vulnerable Twenty (V20) group of finance ministers from the most climate vulnerable countries, launched a scheme called the Global Shield Financing Facility to provide financing to countries suffering from climate disasters.
The conference’s outputs “were not up to expectations. They did not announce clear mechanisms for developed countries’ commitment to reducing emissions.”Hisham Issa, a member of the Union of Arab Environmental Experts and former Egyptian coordinator for the United Nations Framework Convention on Climate Change
Meanwhile, eight governments (Denmark, Finland, Germany, Ireland, Slovenia, Sweden, Switzerland, and the Walloon region of Belgium) pledged $105.6 million in new funding to help low-lying and low-income countries adapt to climate change.
The G20 Leaders Summit, which coincided with COP27,announced a new partnership for a just energy transition in Indonesia. The leaders, meeting in Bali, agreed to mobilise $20 billion over the next three to five years to help Indonesia accelerate its transition to clean energy.
Hisham Issa, a member of the Union of Arab Environmental Experts and former Egyptian coordinator for the United Nations Framework Convention on Climate Change, was among those disappointed in the summit overall. The conference’s outputs “were not up to expectations,” he said.
“They did not announce clear mechanisms for developed countries’ commitment to reducing emissions, such as allocating a part of their gross national product in favor of climate financing, or the imposition of taxes on carbon,” he told Al-Fanar Media. “Carbon markets did not receive sufficient discussions in the negotiations, although they are one of the basic mechanisms for implementing commitments.”
He agreed that the loss and damage fund ws a gain for developing countries, but added that “time could have been saved and this could have been included under the umbrella of financing the Green Climate Fund, which was already established to follow up on climate financing provided by developed countries. It could have been under this item, separate amounts are allocated for loss and damage.”
Similarly, the United Nations Environment Programme (UNEP) said in its recent “Adaptation Gap Report” for 2022 that the flow of international adaptation finance to developing countries is five to ten times below estimated needs and that the gap between needs and reality is widening. The report estimates that annual adaptation needs will be $160 billion to $340 billion by 2030, a range that will grow to $315 billion to $565 billion by 2050.
- Egypt Introduces the Sharm El-Sheikh Adaptation Agenda to Protect Billions of Lives
- Huge Investment in Renewable Energy Is Needed to Reach Climate Goals, Experts Say
- Climate Change Is a Health Crisis, Medical Organisations at COP27 Say
Read more about the COP27 climate summit and global climate concerns in Climate and Environment, an archive of Al-Fanar Media’s reporting on these topics.
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