For a Safer Earth, Healthier Climate

COP27 Concludes With Agreement on “Loss and Damage” Fund for Vulnerable Countries

By Ruth Tene Natsa, Abuja

The United Nations Climate Change Conference COP27 closed today with a breakthrough agreement to provide “loss and damage” funding for vulnerable countries hit hard by climate disasters.

The cover decision, known as the Sharm el-Sheikh Implementation Plan, highlights that a global transformation to a low-carbon economy is expected to require investments of at least USD 4-6 trillion a year. Delivering such funding will require a swift and comprehensive transformation of the financial system and its structures and processes, engaging governments, central banks, commercial banks, institutional investors, and other financial actors.

Set against a difficult geopolitical backdrop, COP27 resulted in countries delivering a package of decisions that reaffirmed their commitment to limit global temperature rise to 1.5 degrees Celsius above pre-industrial levels. The package also strengthened action by countries to cut greenhouse gas emissions and adapt to the inevitable impacts of climate change, as well as boosting the support of finance, technology and capacity building needed by developing countries.

UN Climate Change Executive Secretary, Simon Stiell, said “This outcome moves us forward. We have determined a way forward on a decades-long conversation on funding for loss and damage – deliberating over how we address the impacts on communities whose lives and livelihoods have been ruined by the very worst impacts of climate change.”

Creating a specific fund for loss and damage marked an important point of progress, with the issue added to the official agenda and adopted for the first time at COP27.

Governments took the ground-breaking decision to establish new funding arrangements, as well as a dedicated fund, to assist developing countries in responding to loss and damage. Governments also agreed to establish a ‘transitional committee to make recommendations on how to operationalize both the new funding arrangements and the fund at COP28 next year. The first meeting of the transitional committee is expected to take place before the end of March 2023.

Parties also agreed on the institutional arrangements to operationalize the Santiago Network for Loss and Damage, to catalyze technical assistance to developing countries that are particularly vulnerable to the adverse effects of climate change.

Serious concern was expressed that the goal of developed country Parties to mobilize jointly USD 100 billion per year by 2020 has not yet been met, with developed countries urged to meet the goal, and multilateral development banks and international financial institutions called on to mobilize climate finance.

At COP27, deliberations continued on setting a ‘new collective quantified goal on climate finance’ in 2024, taking into account the needs and priorities of developing countries.

“In this text we have been given reassurances that there is no room for backsliding,” said Stiell. “It gives the key political signals that indicate the phasedown of all fossil fuels is happening.”

The World Leaders Summit, held over two days during the first week of the conference, convened six high-level roundtable discussions. The discussions highlighted solutions – on themes including food security, vulnerable communities and just transition – to chart a path to overcome climate challenges and how to provide the finance, resources and tools to effectively deliver climate action at scale.

COP27 brought together more than 45,000 participants to share ideas, solutions, and build partnerships and coalitions. Indigenous peoples, local communities, cities and civil society, including youth and children, showcased how they are addressing climate change and shared how it impacts their lives..

A summary of some of the other key outcomes of COP27 include the announcement of a USD 3.1 billion plan by the  UN Secretary-General António Guterres, to ensure everyone on the planet is protected by early warning systems within the next five years.

The UN Secretary-General’s High-Level Expert Group on Net-Zero Commitments published a report at COP27, serving as a how-to guide to ensure credible, accountable net-zero pledges by industry, financial institutions, cities and regions.

Other outcomes include the launch of a new five-year work program at COP27 to promote climate technology solutions in developing countries, the launch of a mitigation work programme aimed at urgently scaling up mitigation ambition and implementation as well as the launch of 25 new collaborative actions by countries in power, road transport, steel, hydrogen, and agriculture among others

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