COP27: Rich countries to pay poorer countries for climate change damages

A historic deal negotiated at COP27 will see rich nations pay damages to poorer countries over economic losses suffered as a result of climate change.

After a chaotic 48 hours of negotiations in Sharm el-Sheikh, countries at the UN Climate Change Conference agreed to establishing a ‘loss and damage’ fund for climate-induced disasters.

Developing countries celebrated the historic deal, but more developed countries were left dissatisfied due to little progress on the phasing out of fossil fuels or the limiting of temperatures to 1.5C.

UN secretary-general António Guterres welcomed the decision to establish a loss and damage fund, describing it as “an important step towards justice”.

“Clearly this will not be enough, but it is a much-needed political signal to rebuild broken trust,” he said.

Egyptian Foreign Minister Sameh Shoukry, also COP27 President, made a strong appeal to delegations to vew the draft decisions as “a collective message to the world”.

“The world is watching, I call on us all to rise to the expectations entrusted to us by the global community, and especially by those who are most vulnerable and yet have contributed the least to climate change.”

Negotiators reached a deal on the loss and damage facility after missing their Friday night deadline. Other issues tackled in the deal include a so-called mitigation work programme to keep countries on the path towards 1.5C.

Despite this, Guterres remarked that this COP did not address the need to reduce emissions. He said that the world is yet to make a giant leap on climate ambition and reduce dependency on fossil fuels.

Guterres remarked on a long-delayed promise of $100 billion a year in climate finance for developing countries.

He added that multilateral development banks and international financial institutions ought to change their business models to help in tackling the climate crisis.

“They must accept more risk and systematically leverage private finance for developing countries at reasonable costs,” he said.