COP27 Loss and Damage fund 

Sharm-Al Sheikh has established a loss and damage fund! The world’s developing countries achieved this political win at the 27th Conference of Parties (COP27) to the United Nations Framework Convention on Climate Change (UNFCCC) on November 20, 2022. The fund was a clear demand by the biggest negotiating bloc within UNFCCC climate negotiations - the G77 and China. The bloc, representing about 80% of the world’s population, had demanded that a facility be established at COP26 in Glasgow in 2021. Though the effort was unsuccessful last year, pressure escalated in the following months, resulting in a formal agenda item for loss and damage funding at COP27. So, the efforts have begun but will they even remotely resemble what was initially demanded?
While the political commitment to establish the fund is crucial, and must be considered a significant win, many unknowns remain. These will ultimately determine whether communities on the ground receive the support they need. Some of them are as follows:
It is not clear whether the new fund will be housed within the UNFCCC or outside of it - the G77 demands the former.
The mention of “particularly vulnerable” countries is a bone of contention, which may create distinctions and sow divisions among developing countries. Experts say the fund should be open to all developing countries.
Details on who will pay into the fund are scant. The adopted decision omits the reference to the principles of equity and to historical cumulative emissions. Already, groups like the EU spoke about broadening the donor base, alluding to large emitters like China. Many island nations have also called for China and India to pay into any future loss and damage fund, including Antigua and Barbuda, Mauritius, and Jamaica.
Risks include efforts to narrow down the recipient pool, bring in unaccountable sources of financing like the private sector, or waste time on petty fights concerning the donor base.
Down to Earth is Science and Environment fortnightly published by the Society for Environmental Communication, New Delhi. We publish news and analysis on issues that deal with sustainable development, which we scan through the eyes of science and environment.