How vulnerable countries finally got a fund for climate damage

The world’s most climate-threatened countries came away from two weeks of COP27 talks with an historic win — but it meant aligning with a small group of petrostates and emerging economies slow-walking efforts to cut emissions.

After more than 36-hours of overtime, the global climate conference ended with agreement on a fund that would pay vulnerable states for the damage wrought by global warming.

That victory came at a price.

Reaching consensus on the new form of climate aid — or payments for “loss and damage” in U.N. circles — meant bargaining with countries who sought to block the conference from doing much to slow global warming.

Those efforts, according to two European officials and an official from the U.K., were led by Saudi Arabia, Iran, China, Russia and Brazil. None of those delegations could be contacted for comment immediately after the conference.

“We fought hard. And we moved the world on funding for loss and damage,” said Aminath Shauna, environment minister of the Maldives, a country that sits just 1 meter above sea level.

But Shauna lamented the lack of progress on climate mitigation.

“I am disheartened we did not get there,” she said in her closing statement on Sunday.

The final cover decision reiterated an agreement from a year ago to phase down coal, but it also opened the door to natural gas. The deal also gave short shrift to an initiative designed to encourage faster action in all countries. As a whole, it barely held to a pact made at the COP 26 conference in Glasgow, Scotland, last year.

“We have finally responded to the call of hundreds of millions of people across the world to help them address loss and damage, so this is a defining COP,” said Seve Paeniu, finance minister for the Pacific island of Tuvalu.

But he expressed “deep regret and disappointment” more wasn’t done to stave off future disaster.

'This is not charity'

Developing countries showed an unprecedented unity at this year's talks.

The group — which negotiates as an often fractious 134-country bloc at climate talks, called the G77 and China — includes oil-producing Persian Gulf states, emerging economies, Africa's least-developed countries and the smallest Pacific islands.

The countries — marshaled by Pakistan, which holds the group's rotating chair — were consistent throughout the two-week summit in their demand for a new and dedicated fund that would provide them with money and resources to recover from devastating climate impacts.

“We are not here with cap in hand begging, this is not charity. This is an issue of climate justice,” said Molwyn Joseph, minister of health and environment for Antigua and Barbuda and chair of the 39-member Alliance of Small Island States.

That unified pressure softened the EU’s position on a fund, said Frans Timmermans, the European Commission's Green Deal chief and head of the EU delegation at the summit, despite the bloc's continued misgivings about the fund’s usefulness.

Timmermans put forward a proposal late Thursday that paved the way for a compromise deal that ultimately earned the acceptance of almost 200 countries, including the U.S., which had until recently refused to countenance any discussion of financing for climate damage.

In the final hours of the talks, the Egyptian presidency presented the loss and damage fund proposal to the room, and with no objections, Egypt’s Foreign Minister Sameh Shoukry quickly brought down the gavel.

It was accepted, and exhausted negotiators savored a victory that many thought could never happen after decades of intractability from the EU and the U.S.

But the unity of the G77 group left less space for wealthy industrialized countries and vulnerable nations to work together to resist pressure from large polluters and producers of fossil fuels, including Saudi Arabia and China, seeking to water down other aspects of the final deal.

A moral dilemma

Even as negotiators celebrated a victory on loss and damage, a final draft of the COP27 cover decision that dealt with a section on cutting emissions was dropped on delegates in the plenary hall.

The Swiss delegation asked for a half-hour to review the document, but it took less time than that to see that developed countries had been outflanked. Their main bargaining chip — walking away from the loss and damage fund if they didn’t get more action on emissions cuts — had already been agreed to.

They sat back down and swallowed the whole thing. Senior U.S. delegates walked from the room almost immediately afterward, not waiting to hear the traditional closing speeches of their peers.

Timmermans reflected on the moral quandary his bloc of 27 countries had faced in trying to pursue their goals against a developing world united on loss and damage.

“This deal is not enough on mitigation. But do we walk away and thereby kill a fund the vulnerable countries … have fought so hard for for decades? No, that would have been a huge mistake and a huge missed opportunity to tackle climate change,” he said in a statement delivered to the plenary.

“We had to give up some of the things we wanted to help other parties and this process to move forward,” Timmermans continued. “But I urge you to acknowledge when you walk out of this room, that we have all fallen short in actions to avoid and minimize loss and damage.”

Island nations, so often the moral voice at the talks, lauded the loss and damage outcome but expressed disappointment on the lack of progress to reduce emissions.

“The current text is not enough,” said Kathy Jetnil-Kijiner, climate envoy for the Marshall Islands. “But we’ve shown with the loss and damage fund that we can do the impossible. So we know we can come back next year and get rid of fossil fuels once and for all."

That leaders at the summit may finally be able to understand the human cost of climate change owes much to the strength of the G77, said observers.

“It shows that on this one common thread where you really have a focus, like on loss and damage, you're able to deliver,” said Alden Meyer, a senior associate at E3G.

Future issues are likely to be more divisive, including whether China and other high-income countries such as Singapore and oil-rich Saudi Arabia contribute to the loss and damage fund.

Those talks will begin ahead of the climate summit next year in the United Arab Emirates and as countries determine their targets for a new climate finance goal starting in 2025.