COP27: new fund for vulnerable nations

On Saturday, a deal was reached at the United Nations climate talks to create a fund that would pay for climate-related damage in nations considered to be particularly vulnerable. It would cover damages from phenomena that scientists link to climate change that inflict havoc that is sudden or potentially irreversible.

The provision was approved by negotiators from developed and developing countries in the closing moments of the COP27 U.N. climate summit held in Egypt. As part of the Paris Agreement, wealthy nations are seeking stronger commitments from poorer nations to reduce emissions over the next ten years.

The main demand of wealthier nations opposing the flow of funds to China and other high-income countries under the U.N. treaty on climate change was that the funds be directed towards poorer countries that were viewed as being most vulnerable. Countries would find new funding sources as part of the fund creation process. For the poorer countries, this was a significant victory that removed a significant obstacle to the larger global warming negotiations.

Bangladesh and other small island countries have sought funds for decades to cover losses and damages. Even though rich nations are most responsible for the emissions of greenhouse gases that have contributed to climate change, they have previously opposed climate change initiatives. In their view, making payments would expose their governments and businesses to legal action.

The United States, Europe, and other wealthy nations argued that a new fund was not necessary. Instead, funds for loss and damage could be channeled via the same organizations that now give climate funding to developing countries. There are still many unanswered questions about how the fund will function. In particular, whether it can act quickly to assist nations that most scientists agree have been impacted by climate change. It’s unclear to what extent any event may be directly linked to global warming. 

According to Filipino attorney and chief negotiator for developing nations Vicente Paolo Yu, a transitional committee is expected to work out the specifics over the course of the following year, including how the fund fits in with the billions already in existing climate financing.

“What we wanted to get out of this COP was a political decision to have a fund funded by developed countries,” he said.

As the country that emits the most greenhouse emissions, the U.S. is expected to take the lead in attempts to provide climate funds for emerging regions. However, the U.S. Congress would need to approve any cash, and Republican resistance is anticipated. The European Union stated Thursday evening that it was prepared to create the fund, but only if it targeted the most vulnerable developing countries and wealthy developing countries contributed.

As an example of what vulnerable countries may increasingly face, many have referred to this year’s monsoon rains and floods in Pakistan. These have left the country with damages and reconstruction expenses estimated by the government and the World Bank at $30 billion. Less than half of Pakistan’s $816 million international emergency appeal has been granted.