Countries agree to create fund to repair climate damage

As the end of COP27, the UN climate conference, approaches, countries are about to sign a historic decision establishing an international fund to repair climate damage and loss.

The measure will allow the most vulnerable countries to be compensated for damages caused by the climate crisis and which can no longer be remedied – this is the case, for example, of the floods that left more than 1,700 dead in Pakistan in September.

The subject was a long-standing demand from poorer and developing countries, but it has been shunned for the past 30 years, largely due to opposition from richer nations.

This Saturday (19), however, the European Union and the United States signaled that they changed their historical position and that they will support the creation of the fund. As the two were primarily responsible for halting the progress of the negotiations, the tendency now is for the measure to be achieved.

For that to happen, however, it needs to be unanimously approved by representatives of nearly 200 countries who have been gathered for two weeks in the Egyptian resort of Sharm el-Sheikh for COP27.

The meeting should have ended on Friday (19), but it was extended precisely to allow negotiations to be concluded. The expectation is that the adjustment of details will continue into the early hours of Sunday (20) in meetings behind closed doors.

After that, the countries must hold a plenary session in the morning (dawn in Brazil) to give the final blessing to the text. Until the conclusion of this report, the forecast was to open the meeting at 3 am in Egypt (10 pm in Brazil).

The delay causes the COP to end without most of the representatives of developing countries, who returned home.

As a country can change its mind at any time and oppose the agreement, it is impossible to know with 100% certainty whether it will actually be approved – but the tendency is for that to happen.

This Saturday’s climate of optimism contrasts with the situation of the last few days, when approval of the fund seemed distant. The advance happened after proposals from the bloc of rich countries that were criticized by developing countries were removed from the text.

One of the most controversial measures was that it restricted money from the loss and damage fund to the most vulnerable countries – which would prevent nations like Brazil and Pakistan from having access to funds.

Thus, a new text was proposed by the Egyptian presidency of the COP this Saturday afternoon and received with celebrations by the G77 + China (bloc that brings together developing countries, including Brazil), since it incorporated the main demands of the group.

The text also provides that the fund responds to the UN Climate Convention. This is important because one of its principles is that countries have “common but differentiated responsibilities” for the climate. In other words, wealthier nations—historic emitters and major drivers of the climate crisis—must contribute more than the rest to funding to solve the problem.

One of the points that still need to be resolved, however, is who will actually pay for the new fund. The European Union has previously advocated that donors reflect current realities — a sign that China should contribute. In the draft currently under discussion, however, this excerpt does not appear.

On the other hand, developed countries are still seeking guarantees that emerging economies will commit to reducing emissions and getting rid of fossil fuels. This is one of the points that are still being negotiated.

It is even possible that this year’s text does not mention the reduction in the use of fossil fuels, which was included in last year’s agreement. A suggestion about encouraging the transition to renewable energies, however, was well accepted and should remain in the text.

The European Union had already stated that it expected that, in exchange for the creation of the new fund, developing countries would present more ambitious targets for reducing emissions.

Frans Timmermans, executive vice-president of the European Commission (the bloc’s executive arm), said this Saturday that his main objective in the negotiation was “to keep 1.5°C alive”. This value is considered by experts as the ceiling for the increase in the global average temperature – above it, the forecast is for a series of climate catastrophes.

At the current pace, the forecast is that the increase will be almost twice that target, staying close to 2.8°C. Hence the European pressure to reduce emissions, which could help contain warming.

“There is not enough money on this planet to make up for the misery that will be caused by the natural disasters that we are already seeing,” said Timmermans.

Developing countries, on the other hand, claim that there will be no more commitment to climate mitigation (basically, the reduction of greenhouse gas emissions) without the richest providing more “true” 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 – as exposed by the US during the current conference.

Negotiators from African countries and small islands are excited about the unprecedented prospect of receiving compensation and recognition of the developed bloc’s responsibility for repairing climate losses and damage.

Interestingly, the possible historic decision comes after two weeks of criticism that pointed to a lack of leadership by the Egyptian presidency of COP27 — traditionally the host country of the event acts as the main mediator of the conversations.

The text even received the nickname of “Christmas tree” from the negotiators, since all requests were being included in the draft. The new damages fund, then, could be the gift that the most vulnerable countries have been waiting for years.

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