Agreement for loss and damage fund, the key takeaway from COP27

Autor: Article based upon analysis from Reuters Breakingviews | Link: COP27 deal is a blessing in a very good disguise
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Creating a specific fund for loss and damage marked an important point of progress, to what otherwise would have been a flop at recently ended COP27.

Set against a difficult geopolitical backdrop, the draft issued at the United Nations Climate Change Conference closed on Sunday in Egypt’s Sharm El-Sheikh will come as a disappointment for countries who want a phase-down of all fossil fuels, not just coal.

And that’s a must if governments want to eliminate the risk of breaching the 1.5 degrees Celsius target for global warming.

A year ago, at COP26, a promise has been made by the world’s nearly 200 nations that their decarbonization plans will be updated in 2022.

Now, the final version of the COP27 agreement doesn’t mandate a peaking of global emissions by 2025, nor the firming up of the end of coal and a glide path to phase out oil and gas.

So it’s safe to say that the primary goal of this year’s conference was not delivered: reducing global greenhouse gas emissions by 2030 so global warming might remain manageable at 1.5 degrees Celsius above pre-industrial levels.

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Nonetheless, governments took the ground-breaking decision to establish new funding arrangements, as well as a dedicated fund, to assist developing countries in responding to loss and damage.

The United States has resisted the creation of a “loss and damage” fund that makes rich countries that are responsible for most of the world’s historical emissions pay for cleaning up the real effects of climate change. But at COP27 that changed.

Still, the fund comes with many unknowns. What will be the criteria to trigger a payout? Where will the money come from, and will it be enough?

Epic floods in Pakistan this year submerged swathes of the country and wiped out much of its agriculture and infrastructure, creating an estimated $40 billion hit.

Extreme weather events are expected to become more frequent and severe with every fraction of a degree of warming.

Some studies reckon loss and damage will cost developing countries $580 billion in 2030, according to Reuters. So the negotiations will be difficult.