Countries signal they agree to create a fund to repair climate damage

As the end of COP27, the UN Lima conference, approaches, countries are on the verge of signing a historic decision establishing an international fund to repair climate damage.

The theme was avoided in the last 30 years, since the creation of the UN Climate Convention.

A new text proposed by the Egyptian presidency of the COP —the current edition takes place in the country— this Saturday afternoon (19) was celebrated by the G77 (bloc that brings together developing countries), since it represents one of the main demands of the group. China has also signaled that it supports the measure.

The draft proposes the creation of a fund that should start operating from the end of next year, in addition to a transition committee that, starting in March, will work on the implementation of the mechanism.

The text also foresees that the fund responds to the UN Climate Convention – which suggests its submission to a principle of the Convention that is dear to the developing bloc: that countries have “common but differentiated responsibilities” regarding the climate.

The G77 would still like to make the reference to this principle more explicit. It works as a password to remember that rich countries —historical emitters and main causes of the climate crisis— are also responsible for climate financing.

To the general surprise of the negotiators, the European Union and the United States have been signaling throughout this Saturday that they must agree with the text —which removed from the fore the proposals of the rich bloc strongly criticized by developing countries, such as the restriction of the loss fund and damage only to the most vulnerable countries.

The text needs to be unanimously approved by the countries.

On the other hand, developed countries are still seeking guarantees that emerging economies will commit to reducing emissions and getting rid of fossil fuels. What they hear back is that there will be no more commitment to climate mitigation (basically, the reduction of greenhouse gas emissions) without the rich providing more “real” funding for the energy transition.

The adjective has been increasingly used in conversations, as the rich bloc presents solutions such as loans or carbon credits under the heading of climate finance.

The old debate over funding versus mitigation is the latest obstacle to prevent the completion of yet another Climate COP, this time about to sign a historic understanding on the creation of a fund to repair climate damage and losses.

The clash is reflected in different texts of the negotiation: the mitigation work program, the post-2025 funding target and the COP decision, which brings a political and comprehensive message.

It is possible that this year, unlike the 2021 decision, the final decision will not mention the reduction in the use of fossil fuels. A suggestion about encouraging the transition to renewable energies, however, was well accepted and should remain in the text.

As of the time of publication of this report, there is still no forecast on the agenda for a closing plenary of the COP. The conference presidency maintains consultation with the delegations, which position themselves on the last draft on the table.

Negotiators bet that consultations should stay overnight and extend through Sunday (20), when a decision may be adopted later in the afternoon at local time (morning in Brazil). The delay causes the COP to end without most of the representatives of developing countries, who were unable to extend their trip and returned home.

The initial forecast is that the meeting would end on Friday (18), but the delay in the negotiations meant that this deadline was extended.

Even so, negotiators from African countries and small islands are excited about the unprecedented perspective of climate justice, with the developed bloc’s recognition of responsibility for repairing climate damage and losses.

^{The Planeta em Transe project is supported by the Open Society Foundations}