Historic deal on climate costs agreed at COP27 summit

Sharm el-Sheikh: The countries at the COP27 climate summit have agreed to set up a “loss and damages” fund to help poor countries being battered by climate disasters, but delayed approving a wider deal outlining global resolve to fight climate change.

The summit has also agreed on an overarching climate deal, summarising the political agreements made in Sharm el-Sheikh.

COP President Sameh Shoukry brought the gavel down on the document which represented the consensus all nations have come to.

There was applause as Shoukry brought down the gavel to confirm the deal.

After tense negotiations that ran through the night, the Egyptian COP27 presidency released a draft text for an overall agreement - and simultaneously called a plenary session to gavel it through as the final, overarching agreement for the UN summit.

The session approved the text’s provision to set up a “loss and damage” fund to help developing countries bear the immediate costs of climate-fuelled events such as storms and floods.

But it kicked many of the most controversial decisions on the fund into next year, when a “transitional committee” would make recommendations for countries to then adopt at the COP28 climate summit in November 2023. Those recommendations would cover “identifying and expanding sources of funding” - referring to the vexed question of which countries should pay into the new fund.

Calls by developing countries for such a fund have dominated the two-week summit, pushing the talks past their scheduled Friday finish.

Immediately after the plenary approval for the loss and damage fund, however, Switzerland called for a 30-minute suspension for time to study the new text of the overall deal - specifically the language relating to national efforts to cut climate-warming emissions, the Swiss delegate said.

Negotiators late on Saturday had worried about changes being discussed so late in the process.

The document, which forms the overall political deal for COP27, needed approval from the nearly 200 countries at the climate summit in Egypt.

In line with earlier versions, the draft did not contain a reference requested by India and some other delegations to phasing down use of “all fossil fuels”. It instead referred to a phase down of coal only, as agreed at last year’s summit.

What does ‘loss and damages’ mean?

The term refers to the need for a fund to help countries deal with the immediate impacts of climate change - the loss and damages.

Rich countries have - until now - resisted the discussion over financing for 30 years fearing that since they historically played a major role in causing climate change, they will have to pay for it for centuries to come.

But, the impacts of flooding in Pakistan, Nigeria and elsewhere in recent years have tipped the balance - in Egypt the issue of the losses and damages due to rising temperatures finally made it onto the negotiating agenda..