Cop27: UN summit puts climate compensation on agenda for the first time

The issue of ‘loss and damage’ remains highly contentious

Climate compensation has been green-lit for negotiations at Cop27 – the first time in the summit’s history.

Funding for countries that have suffered permanent losses and irreparable damage from the climate crisis - or “loss and damage” in the lingo of international negotiations - has been placed on the agenda.

It was a burst of good news on Sunday as world leaders descended on Sharm el-Sheikh for start of the summit after a wave of announcements last week which revealed the world is far off track in making dramatic cuts to emissions, and climate impacts are mounting.

Hours after the baton of the Cop (conference of parties) was passed to Egypt from Cop26 host, the United Kingdom, news was announced that climate compensation would be discussed at the summit where US president Joe Biden will be in attendance.

Poorer countries, largely in the Global South and experiencing devastating extremes of climate change today, have been driving demands for richer countries that built their economies on fossil fuels to pay for the impacts of their carbon footprint. However, the issue has remained highly contentious.

The United States and the European Union in the past have been hesitant to engage in discussions around the issue, fearing the possibility of legal liability and compensation.

But this time there is hope as countries discuss the shape and financing of the fund over the next two weeks.

“Getting finance for Loss and Damage in the agenda for Cop27 is a definite win for developing countries,” Dr Saleemul Huq, director of the International Centre for Climate Change and Development (ICCCAD) in Bangladesh told The Independent in Sharm el-Sheikh.

However, experts warn the job doesn’t stop here. Dr Huq adds that the next step would be to “get the fund set up by the end of Cop27”.

“The last few days have seen a shift with senior officials and politicians in some developed countries appearing to show a willingness, for the first time, to address Loss and Damage and it is now on the final agenda for Cop27,” said Michael Sheldrick, co-founder and chief policy, impact, and government affairs officer for Global Citizen.

He added: “This alone is not enough as it doesn’t mean it will get the attention it deserves. Developed countries must now participate in negotiations in good faith and agree to set up a Loss and Damage financing facility under the UNFCCC and the Paris Agreement.”

How countries work together on this will provide a litmus test for how much action can be achieved in this critical decade to curb global temperature rise to the increasingly ambitious 1.5C, or “well below” 2C as set out by the Paris Agreement.

Chadians pose for a photograph at the entrance of the Cop27 (AP)

Climate-induced disasters and extreme weather events have already wreaked havoc in many countries. Floods killed more than 1,700 people in Pakistan and caused $44bn worth of damages while heatwaves and droughts have withered crops in India, China and Africa.

“Funding arrangements responding to Loss and Damage associated with the adverse effects of climate change, including a focus on addressing loss and damage,” the agenda for Cop27 reads.

The process should wrap up no later than 2024 and does not involve liability or compensation, the agenda added.

US climate envoy John Kerry said last month that the US anticipated the inclusion of Loss and Damage as an agenda item and “we’re perfectly comfortable helping it to be that.”

“We anticipate trying to work towards that outcome according to what we decided in Glasgow,” he said.

Beyond loss and damage, developing countries are calling for a doubling of finance to adapt to climate impacts by 2025 from 2019 levels.

“Loss and Damage doesn’t get ticked off the to-do list by putting it on the agenda, it has to be put into action,” said Jean Su, energy justice director at the Center for Biological Diversity.

“The US and other rich countries must work with vulnerable nations to establish a real finance mechanism, start paying up and stop obstructing loss and damage negotiations like they have for the past decade.”