The debate on “loss and damage” will dominate the COP27 agenda

World leaders attending next month’s UN climate summit are preparing for a renewed battle over how much financial support rich countries give developing nations to help them cope with the fallout from rising global temperatures.

The issue of so-called “loss and damage” financing for developing countries has been contentious for years, with rich countries reluctant to accept financial responsibility for climate change caused by industrial activity and offer compensation to poorer countries.

But many developing countries, such as low-lying Pacific island states vulnerable to rising sea levels, are stepping up their demands. They want to see the creation of an international loss and damage financing mechanism, a type of fund, at the COP27 UN summit in November, hosted by Egypt.

“Wealthier countries have a moral responsibility” to help poorer nations recover, adapt and build resilience to disasters, António Guterres, UN secretary-general, said on Friday. “Let’s not forget that 80 percent of the emissions that drive this kind of climate destruction come from the G20.”

Alex Scott, an analyst at environmental think tank E3G, says the UN summit will be a test of how willing governments are to understand what is needed to tackle mounting climate impacts, particularly after the recent devastating floods in Pakistan.

Without some movement on the issue of loss and damage, “the legitimacy of [the UN process] they will be challenged,” argues Laurence Tubiana, executive director of the European Climate Foundation.

While last year’s COP26 summit in Glasgow drew much fanfare, attended by political and business leaders from around the world, the upcoming conference in Sharm el-Sheikh is expected to be a more procedural and low-key event.

The Egyptian presidency wants to focus on implementing the wide range of promises made since the 2015 Paris agreement, which are broadly divided into efforts to reduce emissions, adapt to climate change and provide money to help the most vulnerable countries. to do both.

“The number one priority is implementation,” says Wael Aboulmagd, Egypt’s COP27 ambassador. “Everyone has to be part of the conversation.”

However, only a handful of countries had updated their emission reduction plans by the end of September, despite a commitment in the COP26 agreement to “review and strengthen them” by the end of 2022.

Current pledges by nations that have signed the agreement are likely to limit warming to less than 2.3°C, which is above the Paris Agreement’s red line target of 2°C, according to Climate Action Tracker. Ideally, global warming would be limited to 1.5°C, although temperatures have already risen by at least 1.1°C since pre-industrial times.

Aboulmagd told a recent briefing that the Egyptian team had been “working over the phone” to encourage countries to improve their commitments, and he was hopeful that more would do so before November.

Wael Aboulmagd, COP27 ambassador from Egypt
Wael Aboulmagd, Egypt’s ambassador to COP27: “The number one priority is implementation” © Sayed Sheasha/Reuters

Rich nations promised to mobilize $100 billion a year in support of the poorest countries by 2020. But research shows they fell short at $83.3 billion. The most recent estimates by US climate envoy John Kerry suggest the figure may have reached $90 billion. But in addition to signing the full amount, the signatories must agree on a new target for climate-related financial aid to be delivered from 2025.

Meanwhile, China and the so-called Group of 77, a coalition of developing nations at the UN, will propose that loss and damage financing be included as a topic of discussion on the official agenda of COP27, which will be finalized at the beginning of the top. .

In Glasgow last year, rich nations rejected a proposal for a loss and damage financing mechanism, although the countries agreed to start a “dialogue” on the issue.

While calls for the creation of such a facility are growing louder in the run-up to November, anything included in the final COP27 deal will require the unanimous approval of more than 190 parties to the Paris Agreement. .

However, the Egyptian hosts say they are committed to moving the issue forward and have appointed ministers from Chile and Germany, including Jennifer Morgan, a former executive director of Greenpeace and now Germany’s climate envoy, to coordinate discussions on the issue. at COP27.

Vulnerable countries will hope these are fruitful, as they did not leave Glasgow with “any satisfaction” from loss and damage, says Aboulmagd. “We all have a collective obligation to ensure this issue is addressed, and in particular the funding side.”

Conrod Hunte, vice president and chief climate negotiator for the Alliance of Small Island Developing States, says it’s important that any loss and damage deal includes a financing element. “We are reaching our breaking point, our limit, both literally and figuratively,” he says.

However, during New York climate week in September, Kerry rejected the need for specific funding for loss and damage, arguing that the focus should be on supporting so-called mitigation projects. The EU is also expected to resist the idea of ​​creating a fund at COP27.

Reaching a unanimous agreement, let alone one that includes a decision on compensation, is always a challenge at the COP, but it is likely to be particularly difficult this year given the geopolitical context.

The Russian invasion of Ukraine has fueled the broader inflation, food price and energy crises, while relations between the United States and China are fractured. Poorer nations like India have emphasized the need for financial support if they want to transform their energy systems and economies to limit greenhouse gas emissions, while wealthier nations are now also scrambling to provide support to their own citizens in the midst of an ever-increasing cost of living through the crisis, with their budgets already depleted by support measures in the face of the pandemic.

However, scientists and international bodies such as the IMF have pointed to the severe cost to all countries of rolling back on decarbonisation and climate change commitments, saying rich nations must provide support to the most vulnerable. As a result, climate justice is expected to be a particularly prominent theme at a COP organized in Africa.

Speaking at the Africa Adaptation summit in September, Moussa Faki Mahamat, chairman of the African Union Commission, said there was “a strong imbalance between Africa’s responsibility [for climate change] and the volume of resources it receives” to mitigate and adapt to the crisis. “This is where one of the most shocking injustices towards our continent resides.”

E3G’s Scott says the world is in “a time of multiple crises” but COP27 must demonstrate progress and cooperation among leaders on climate finance, emissions reductions and real economy transformation.

“It is possible that it will be very disappointing and then the history of COP27 will be one of failure and lack of understanding of the scale of the challenge,” he warns. That would only add to the pressure for next year, when geopolitical events and energy crises “will not have abated yet”.

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