By Daniel Gutman
SHARM EL SHEIKh , Nov 20 2022 – They were on the brink of shipwreck and did not leave happy, but did feel satisfied that they got the best they could. The countries of the global South achieved something decisive at COP27: the creation of a special fund to address the damage and loss caused by climate change in the most vulnerable nations.

The fund, according to the Sharm El Sheikh Implementation Plan, the official document approved at dawn on Sunday Nov. 20 in this Egyptian city, should enable “rehabilitation, recovery and reconstruction” following extreme weather events in these vulnerable countries.

Decisions on who will provide the money, which countries will benefit and how it will be disbursed were left pending for a special committee to define. But the fund was approved despite the fact that the issue was not even on the official agenda of the summit negotiations, although it was at the center of the public debate before the conference itself.

“We are satisfied that the developed countries have accepted the need to create the Fund. Of course, there is much to discuss for implementation, but it was difficult to ask for more at this COP,” Ulises Lovera, Paraguay’s climate change director, told IPS, weary from a longer-than-expected negotiation, early Sunday morning at the Sharm El Sheikh airport.

“This COP has taken an important step towards justice. I welcome the decision to establish a loss and damage fund and to operationalize it in the coming period,” said U.N. Secretary-General António Guterres. He also described as an achievement that a “red line” was not crossed, that would take the rise in global temperature above the 1.5-degree limit.

More than 35,000 people from nearly 200 countries participated in the 27th Conference of the Parties (COP27) on Climate Change in Sharm El Sheikh, an Egyptian seaside resort on the Red Sea, where the critical dimension of global warming in the different regions of the world was on display, sometimes dramatically.

Practically everything that has to do with the future of the modes of production and life of humanity – starting with energy and food – was discussed at a mega-event that far exceeded the official delegations of the countries and the great leaders present, such as U.S. President Joe Biden and the Brazilian president-elect, Luiz Inácio Lula da Silva.

Hundreds of social organizations, international agencies and private sector stakeholders came here to showcase their work, seek funding, forge alliances, try to influence negotiations, defend their interests or simply be on a stage that seemed to provide a space for all kinds of initiatives and businesses.

At the gigantic Sharm El Sheikh International Convention Center there was also a global fair with non-stop activities from morning to night in the various pavilions, in stands with auditoriums of between 20 and 200 seats, where there was a flurried program of presentations, lectures and debates, not to mention the more or less crowded demonstrations of activists outside the venue.

In addition, government delegates negotiated on the crux of the summit: how to move forward with the implementation of the Paris Agreement, which at COP21 in 2015 set global climate change mitigation and adaptation targets.

United Nations Secretary-General António Guterres (3rd-R) walks hurriedly through the Sharm El Sheikh Convention Center during the last intense hours of the COP27 negotiations, when there were moments when it seemed that there would be no agreement and the climate summit would end in failure. CREDIT: Daniel Gutman/IPS

On the brink of failure

Once again, the nine-page Sharm El Sheikh Implementation Plan did not include in any of its pages a reference to the need to abandon fossil fuels, but only coal.

The document was the result of a negotiation that should have ended on Friday Nov. 18, but dragged on till Sunday, as usually happens at COPs. What was different on this occasion was a very tough discussion and threats of a walkout by some negotiators, including those of the European Union.

But in the end, the goal of limiting the temperature increase to 1.5 degrees Celsius, established in the Paris Agreement, was maintained, although several countries tried to make it more flexible up to 2.0 degrees, which would have been a setback with dramatic effects for the planet and humanity, according to experts and climate activists.

“Rapid, deep and sustained reductions in global greenhouse gas emissions (are) required – lowering global net greenhouse gas emissions by 43 percent by 2030 relative to the 2019 level – to limit global warming to 1.5°C target,” reads the text, although no mention is made of oil and gas, the fossil fuels most responsible for those emissions, in one of the usual COP compromises, since agreements are reached by consensus.

The Bolivian delegation in Sharm El Sheikh, which included officials as well as leaders of indigenous communities from the South American country, take part in a meeting with journalists at COP27 to demand more ambitious action. CREDIT: Daniel Gutman/IPS

The priorities of the South

Developing countries, however, focused throughout the COP on the Loss and Damage Fund and other financing mechanisms to address the impacts of rising temperatures and mitigation actions.

“We need financing because we cannot deal with the environmental crisis alone. That is why we are asking that, in order to solve the problem they have caused, the rich nations take responsibility,” Diego Pacheco, head of the Bolivian delegation to Sharm El Sheikh, told IPS.

Environmental organizations, which showed their power in Egypt with the presence of thousands of activists, also lobbied throughout COP27 for greater commitments, including mitigation actions.

“This conference cannot be considered an implementation conference because there is no implementation without phasing out all fossil fuels,” the main cause of the climate crisis, said Zeina Khalil Hajj of the international environmental organization 350.org.

“Together for implementation” was precisely the slogan of COP27, calling for a shift from commitments to action.

“A text that does not stop fossil fuel expansion, that does not provide progress from the already weak Glasgow Pact (from COP26) makes a mockery of the millions of people living with the impacts of climate change,” said Khalil Hajj, head of global campaigning at 350.org.

One of the demonstrations by climate activists at COP27 held in Egypt Nov. 6-20, demanding more ambitious climate action by governments, as well as greater justice and equity in tackling the climate crisis. CREDIT: Busani Bafana/IPS

The crises that came together

Humanity – as recognized by the States Parties in the final document – is living through a dramatic time.

It faces a number of overlapping crises: food, energy, geopolitical, financial and economic, combined with more frequent natural disasters due to climate change. And developing nations are hit especially hard.

The demand for financing voiced by countries of the global South thus takes on greater relevance.

Cecilia Nicolini, Argentina’s climate change secretary, told IPS that it is the industrialized countries, because of their greater responsibility for climate change, that should finance developing countries, and lamented that “the problem is that the rules are made by the powerful.”

However, 80 percent of the money now being spent worldwide on climate change action is invested in the developed world, according to the Global Environment Facility (GEF), the world’s largest funder of climate action, which has contributed 121 billion dollars to 163 countries over the past 30 years, according to its own figures.

In this context, the issue of Loss and Damage goes one step further than adaptation to climate change, because it involves reparations for the specific impacts of climate change that have already occurred, such as destruction caused by droughts, floods or forest fires.

“Those who are bearing the burden of climate change are the most vulnerable households and communities. That is why the Loss and Damage Fund must be established without delay, with new funds coming from developed countries,” said Javier Canal Albán, Colombia’s vice minister of environmental land planning.

“It is a moral and climate justice imperative,” added Canal Albán, who spoke at a press conference on behalf of AILAC, a negotiating bloc that brings together several Latin American and Caribbean countries.

But the text of the outcome document itself acknowledges that there is a widening gap between what developing countries need and what they actually receive.

The financing needs of these countries for climate action until 2030 were estimated at 5.6 trillion dollars, but developed countries – as the document recognized – have not even fulfilled their commitment to provide 100 billion dollars per year, committed since 2009, at COP15 in Copenhagen, and ratified in 2015, at COP21 which adopted the Paris Agreement.

It was the absence of any reference to the need to accelerate the move away from oil and natural gas that frustrated several of the leaders at the COP. “We believe that if we don’t phase out fossil fuels there will be no Fund that can pay for the loss and damage caused by climate change,” Susana Muhamad, Colombia’s environment minister, who was at the two-week conference in Sharm El Sheikh held Nov. 6-20, told IPS.

“We have to put the victims first in order to make an orderly and just transition,” she said, expressing the sentiments of the governments and societies of the South at COP27.

By Aimable Twahirwa
SHARM EL SHEIKH, Nov 20 2022 – After a tense impasse and many hours of negotiations, almost 200 countries struck a deal to set up a loss and damage fund to assist nations worst hit by climate change – a demand considered not-negotiable by the developing countries.

COP27 was extended by a day after negotiators couldn’t agree on the fund – leading to UN Secretary-General António Guterres saying on Friday, November 18, 2022, that the time for talking about loss and damage finance is over. He alluded to a growing breakdown of trust between developing and developed countries.

Guterres, early on Sunday, November 20, 2022, welcomed the fund saying: “I welcome the decision to establish a loss and damage fund and to operationalize it in the coming period. Clearly, this will not be enough, but it is a much-needed political signal to rebuild broken trust.”

He added that the voices of those on the frontlines of the climate crisis must be heard.

Speaking in the closing plenary, COP President H.E. Sameh Shoukry said:

“The work that we’ve managed to do here in the past two weeks, and the results we have together achieved, are a testament to our collective will, as a community of nations, to voice a clear message that rings loudly today, here in this room and around the world: that multilateral diplomacy still works… despite the difficulties and challenges of our times, the divergence of views, level of ambition or apprehension, we remain committed to the fight against climate change… we rose to the occasion, upheld our responsibilities and undertook the important decisive political decisions that millions around the world expect from us.”

Shoukry noted: “This was not easy. We worked around the clock. Long days and nights. Strained and sometimes tense, but united and working for one aim, one higher purpose, one common goal that we all subscribe to and aspire to achieve. In the end, we delivered.”

Under the previous global climate summit, which took place in Glasgow, Scotland last year, parties agreed on the roadmap where developing countries, which did little to cause the climate crisis, arrived with a determination to win a commitment from rich nations to compensate them for this damage.

On several occasions during negotiations, Egyptian Foreign Minister Sameh Shoukry, also the COP27 President, stated that climate finance remains key for Africa since the continent contributes 4 percent to global emissions and is adversely affected to a much higher degree by global warming-relate events.

On losses and damages, some climate finance experts believe that ongoing climate talks on finance at COP27 are one of the most painful examples of the African proverb that when the elephants fight, it is the grass that gets trampled.

“Ongoing negotiations on loss and damage are the most recent iteration of this long-standing fight,” Sophia Murphy, the Executive Director of the US-based Institute of Agriculture and Trade Policy (IATP), told IPS.

Delegates debate climate finance on the sidelines of COP27 at Sharm El Sheikh. Credit: Aimable Twahirwa/IPS

IATP is a think tank that analyses the interconnection between agriculture, trade, and climate in developing countries.

Since 2015, loss and damage have served as the main catalyser under the UNFCCC process, especially for enhancing financial support for adaptation to avert, minimise and address climate change impacts in developing countries that are particularly vulnerable to the adverse effects of climate change.

Murphy pointed out that the G77 includes a very wide range of countries and interests, and the climate crisis is not suffered equally across the South.

“Currently developing nations at COP27 are likely showing that everyone is responsible for the negative realities of climate change and loss and damage negotiations is the most recent iteration of this long-standing fight,” she said.

While many negotiators in Sharm El Sheikh believe that rich countries are lagging in measures to allocate loss and damage funding, there is a consensus that the current negotiations on climate finance did not go very well, particularly with respect to the expectations for COP27.

Dr Somorin Olufunso, Regional Principal Officer, Climate Change and Green Growth (East Africa) at the African Development Bank, told IPS that the finance negotiation is primarily a “trust” negotiation.

“Unfortunately, if the trust is broken, it may affect other issues being negotiated and ultimately affect our collective action of combatting climate change,” the senior financial expert said.

The bank published the 2022 African Economic Outlook report on the needs of African Countries for loss and damage in 2022-2030 at between USD 289.2 to USD 440.5 billion. The estimated adaptation finance needs are in a similar order of magnitude.

For many Africans, according to Olufunso, the negotiations were not aggressive enough in finding solutions urgently needed at both scale and speed.

Until the end of the summit, loss and damage fund remained a major sticking point.

“Negotiations are going well in some items and not well in other items (…) Rwanda and other vulnerable countries had much expectation in securing a decision of adopting the establishment of loss and damage fund,” Faustin Munyazikwiye, the Deputy Director General of Rwanda Environmental Management Authority (REMA) and Rwanda’s Lead negotiator, told IPS in an interview.

According to him, this item [on loss and damage] did not go well.

African negotiators at COP27 prioritised filling gaps between present risks associated with climate change and financing for adaptation.

However, most developing countries prefer to ensure that finance for loss and damages is channelled through the private sector and is not necessarily a liability for rich countries.

But other experts believe that cost of repairing these damages is staggering and the countries which should pay are the ones who contributed to climate change in the first place.

While some climate finance experts observe that the commitment by rich nations to pay the developing world $100 billion cannot even compensate what Africa’s needs, others point out that COP27 must deliver a bold finance facility to pay for loss and damage to communities already impacted by climate change on the continent.

Kelly Dent, the Global Director of External Engagement at the UK-based World Animal Protection, told IPS most vulnerable countries, mainly in Sub-Saharan Africa, are considering the climate emergency as a matter of life.

“Without a coherent and meaningful agreement on finance, COP27 will fall short of its mission and put millions of lives at risk,” she said.

From Dent’s perspective, a roadmap to track and deliver a doubling of adaptation finance is critical.

The 2022 UNEP’s Adaptation Gap Report, released on the sidelines of COP27 in Sharm El Sheikh, indicates that the continent requires 7 to 15 billion US dollars annually to enhance adaptation to climate change besides the nearly 3 trillion dollars investment that is needed to implement nationally determined contributions (NDCs) and cap emissions in line with the Paris climate deal.

IPS UN Bureau Report

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