COP 27: a “global loss-and-damage fund” to help vulnerable countries already suffering from climate disasters
According to Simone Tagliapietra´s article released at Bruegel, the successful of the COP 27 will be defined by progress on climate finance and the global “loss and damage fund”, an item included in the conference’s agenda that tackles the difficult point of who should pay for damage caused by global warming-related extreme weather in poor countries that have not caused the climate problem.
- The loss-and-damage concept was created long time ago but never really made progress. The Alliance of Small Island States called in 1991 for a mechanism that would compensate countries affected by rising sea levels. The concept refers to the destructive impacts of climate change in vulnerable and developing economies (which have not created the climate change problem to the same extent as rich countries) that cannot be avoided by cutting greenhouse gas emissions or adapting to the changing climate by themselves. Although COP26 in 2021 came close to creating a ‘Glasgow Loss and Damage Facility’ the initiative was ultimately rejected by rich economies (including the EU and the US) which feared unlimited liability.
- A global fund is needed to deal with loss and damage: According to the article this global loss-and-damage fund would raise questions on governance such as what form could take, what types of activity it could support….It would also raise questions on how it could be funded and in this regard the article echoes the proposal of António Guterres, UN Secretary General, suggesting countries could tax the windfall profits of fossil-fuel companies and use those revenues to support countries suffering climate-related loss and damage.
- Progress on climate finance commitments. According to the article climate finance unfulfilled commitments are also a major source of frustration that need to be addressed. Specifically, the commitment of $100 billion per year by 2020 (agreed in 2009 and extended until 2025 in Glasgow) from advance economies to support the efforts of developing countries to reduce emissions and adapt to climate change, which have not been allocated (the article mentions a shortfall of between $20 to $80 billion per year depending on the source).
According to the article the success of COP27 will be measured against how far rich nations ultimately decide to go on these two crucial issues of loss and damage and climate finance.