Climate fund breakthrough offers ‘hope’ at UN COP27 talks, EU says

Pakistan has campaigned for the loss-and-damage clause to be included in the COP27 negotiations after devastating floods submerged large parts of the country this year

  • EU sources claim that a “loss and damage” agreement has been reached
  • More Thornic issues – like the source of funding – were brought up
  • Loss and damage financing a key issue for Africa
  • for more stories, go to tea News24 Business front page

As COP27 host Egypt scrambles to salvage Saturday’s UN climate talks, the European Union signaled a breakthrough on the contentious issue of “loss and damage” funding for climate-vulnerable nations.

Representatives from nearly 200 countries have gathered for two weeks at COP27 in Egypt to advance action to combat climate change as the world faces a worsening onslaught of extreme weather.

But talks stalled over the terms on which wealthy polluters would provide “loss and damage” finance to countries hit by climate disasters, as well as ambitions in tackling global warming.

After the European Union overnight flatly rejected a document presented by Egypt, a source from the bloc said they thought at least the loss and damage issue was “unified”.

A European source confirms:

An agreement on losses and damages was reached, targeting the fund to vulnerable countries.

A draft document on the creation of a specific loss and damage fund was published by the Egyptian Presidency on Saturday.

It borrows some of the language from three previous proposals – by the EU, Britain and the G77 and China bloc of 134 developing countries – and appears to be postponing some of the more thorny issues, particularly over funding sources, to next year.

“The draft loss and damage funding decision gives hope to vulnerable people that they will receive help to recover from climate-related disasters and rebuild their lives,” said Harjeet Singh, head of global policy strategy at Climate Action Network International, formerly European Commission Vice-President Frans Timmermans said the EU would “rather have no result than a bad result” and is ready to walk out of the negotiations altogether.

READ| COP27: What are the sticking points in reaching a climate agreement?

The EU wants COP27 to use strong language to cut emissions and reaffirm the ambitious goal of limiting global warming to 1.5 degrees Celsius above pre-industrial levels.

Scientists say this is a far safer guard rail against catastrophic climate impacts as the world is currently far off course and heading for about 2.5C warming under current commitments and plans.

“We are not here to produce paper, but to keep the 1.5-degree target alive,” said Federal Foreign Minister Annalena Baerbock.

Egypt’s COP27 presidency also released a new draft final statement addressing the need to accelerate “efforts to phase out unabated coal-fired power generation and phase out inefficient fossil fuel subsidies”.

And another document has been released specifically addressing ambitions to curb planet-warming emissions.

On the need to be more ambitious in slowing global temperature rises, think tank E3G’s Tom Evans said it was a “copy and paste” of the deal reached in Glasgow, without building on the one reached a year ago.

Many developing countries see the establishment of a loss and damage fund at this meeting as a key issue for talks.

The G77 and the Chinese bloc called for the immediate establishment of such a fund at COP27, with operational details to be agreed later.

A counter-proposal by the EU called for prioritizing the countries most at risk from the climate as recipients.

They also said the money should come from a “broad donor base” – code for countries like China and Saudi Arabia that have gotten richer since they were listed as developing countries in 1992.

Timmermans had previously warned that unless enough is done to lower emissions and keep 1.5C alive, “there is no amount of money on this planet that will be able to address the misery already see that through natural disasters etc.,” he said.

As part of the 2015 Paris Agreement, countries agreed to limit global warming to “well below” 2°C and preferably 1.5°C.

This more ambitious 1.5 degree target was adopted in Glasgow last year, with countries agreeing to review their carbon reduction targets annually.

With warming of about 1.2C so far, the world has seen a cascade of climate-related extremes in recent months – from floods in Pakistan and Nigeria to heatwaves and droughts around the world.

That has put the spotlight on the plight of developing countries, which face escalating disasters, an energy and food price crisis, and mounting debt.

The World Bank has estimated that the floods in Pakistan alone have caused $30 billion in damage and economic loss. Millions of people were displaced and two million homes were destroyed.

COP27 participants have criticized Egypt’s handling of the talks, which have stretched far into overtime.

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