Egypt offers possible compromise on climate payments at COP27

In a bid to resolve an impasse between developed and developing countries over payments for the consequences of climate change, the Egyptian hosts of the COP27 conference offered a compromise Saturday afternoon that would aim to set up a new fund for climate harms in developing nations by the end of next year.

Payment for “loss and damage” — United Nations parlance for the irreversible harms of climate change — has been the most contentious issue at this conference, after years of sitting on negotiators’ back burners.

The proposal released Saturday calls for “new funding arrangements,” including a dedicated fund to help developing nations address loss and damage. It establishes a committee to develop plans for how the fund should operate, which would be considered and adopted at next year’s COP28 in Dubai. It “urges” — but does not require — developed countries to provide new financial support to nations dealing with floods, droughts and other destruction wrought by rising temperatures.

“I would say it is a good decision; it offers hope,” said Harjeet Singh, head of global political strategy for Climate Action Network International. “Something that has not been in the UNFCCC or the Paris agreement is consequences for climate inaction. By establishing funding arrangements [for loss and damage] we are now going to make sure that polluters who are causing the crisis now have to pay up.”

Unlike a previous proposal from the European Union, the new text does not specify that the loss and damage fund only benefit “particularly vulnerable” nations — language that could exclude emerging economies like Pakistan and Nigeria, which were both hit by catastrophic floods this year.

But some activists were wary that Egypt’s offering was still too vague about when the fund would become operational or who would control it. Developing nations have been adamant that any loss and damage fund would need to be nested under the U.N. Framework Convention on Climate Change — the body that oversees the COP process — and overseen by representatives from every region of the globe, especially small island nations and least developed countries.