COP27: With time slipping, deal on ‘loss and damages’ seems distant

After a sluggish start to the talks, Egypt’s COP27 presidency outlined an ambitious schedule for week two, with the aim of getting all nations to concur by Friday on a “cover text” — a political statement that lays out the objectives and commitments decided in Sharm El-Sheikh.

“There is still a lot of work ahead of us if we are to achieve meaningful and tangible outcomes of which we can be proud; we must now shift gears. Time is not on our side and the world is watching — let us come together and deliver now,” COP27 President and Egypt’s Foreign Affairs Minister Sameh Shoukry said during an address to delegates on Monday.

Many negotiators and observers cautioned that despite Shoukry’s pleas, a number of crucial issues remain unresolved. The most divisive topic on the table is loss and damage, or how developed nations should make up for the extreme weather events that developing countries endure despite not making a significant contribution to greenhouse gas emissions.

After a protracted battle to include it, the subject is now on the Conference of Parties’ official agenda for the first time at COP27, allowing ministers to discuss and decide on the matter. With a clear road map toward that goal established at the conclusion of this meeting, developing countries want to establish a new “facility” or programme to provide technical assistance and funding to address climate-related losses and damages. 

“There’s a longer term approach looking at setting up a financing facility, but I think from the perspective of the African Group of Negotiators we do need to see immediate support for loss and damage on the continent,” said South Africa’s Environment Minister Barbara Creecy.

According to Matthew Samuda, the minister without portfolio for Jamaica in the Ministry of Economic Growth, some countries are requesting a “intermediary fund” to aid nations that have recently been affected by climate disasters, which emphasises the urgency of the situation even more.

While some technical issues were resolved in the first week, Alden Meyer, a COP veteran and senior associate with research firm E3G, said that all of the major political issues, such as loss and damage, the regulations governing international carbon markets, and a programme to scale up efforts to reduce emissions, are still unresolved.

Meyer said, “All of the crunch issues have gotten logjammed. You’re going into the second with most of the big negotiating issues unresolved.”

With only five days left until the conference ends, there is a chance that negotiations will become entangled in the most contentious issues, making it impossible for negotiators to reach a consensus by Friday and causing the process to be postponed until COP28 by a full year.

The Group of 20 summit, which is taking place in Bali, Indonesia, about 6,000 miles away, will have an impact on the outcome of the talks in the Egyptian beach resort of Sharm El-Sheikh. Sharm El-Sheikh will be impacted by what the G-20 says about climate change and fossil fuels in their own final communiqué.

“If those discussions go well and there’s positive momentum coming into Bali, that will definitely help ministers here get some deals done at the end of the week. On the other hand, if there’s gridlock and backsliding in Bali, it will make it very difficult for ministers to compromise here because their bosses couldn’t agree in Bali,” Meyer added.

However, it will be difficult to convince delegates to fully support a brand-new facility or loss and damage programme at this COP. There are already established funding mechanisms, according to US officials and other developed nations, such as the Global Shield, the Green Climate Fund, and the Adaptation Fund, which were all established in 2001, 2010, and 2010.

The final one is a new G7 initiative that Germany is coordinating to direct insurance and disaster funding to nations responding to droughts, floods, and storms made worse by climate change.

 US Special Presidential Envoy for Climate John Kerry said on Saturday, “I don’t think anybody has fully defined what a facility is or what shape it might take, and there are all kinds of views about what that might be. It’s a well-known fact that the United States and many other countries will not establish some sort of legal structure that is tied to compensation or liability.” 

The delivery of specific financial commitments made during previous COPs, such as the promise made in 2009 to provide $100 billion annually in climate funding by 2020, has fallen short. According to Rachel Cleetus, policy director with the Climate and Energy programme at nonprofit Union of Concerned Scientists, this time, countries are not requesting money to be provided by the conclusion of the summit but rather a political agreement to establish a new facility. A diversionary tactic, according to Cleetus, is pointing to current institutions as a way to move forward.

According to Richie Merzian, director of the climate and energy programme at the Australian Institute and former lead negotiator for the nation on loss and damage issues, a compromise on the subject will most likely be reached by the end of this week.

However, the final wording will probably reflect the lowest common denominator and leave many disappointed because cover documents need to be agreed upon by all countries, he said.

He further added, “G-20 industrialized countries are not going to tip money into a compensation fund that exposes them to liability for their emissions and for developing nations, that’s a very hard pill to swallow. Developing countries have nothing to leverage at this COP, so loss and damage might end up as a political tool to push for more mitigation and adaptation finance.”

(With inputs from Bloomberg)