A deal has been struck at the COP27 UN climate summit to help pay for the damage an overheating world is having on poor countries.
The deal establishes a fund for what negotiators call loss and damage. It is a big win for poorer nations who are often the victims of climate-worsened floods, droughts, heat waves, famines and storms despite having contributed little to the pollution that heats up the globe. It has also long been called an issue of equity for nations hit by weather extremes and small island states that face an existential threat from rising seas.
The fund would be largely aimed at the most vulnerable nations, though there would be room for middle-income countries that are severely battered by climate disasters to get aid.
Seve Paeniu, the finance minister of Tuvalu, said: “Three long decades and we have finally delivered climate justice. We have finally responded to the call of hundreds of millions of people across the world to help them address loss and damage.”
Speaking for a coalition of the world’s poorest nations, Pakistan’s environment minister, Sherry Rehman, said the establishment of the fund “is not about dispensing charity”. She added: “It is clearly a down payment on the longer investment in our joint futures.”
Antigua and Barbuda’s Molwyn Joseph, who chairs the organisation of small island states, described the agreement as a “win for our entire world”. He said: “We have shown those who have felt neglected that we hear you, we see you, and we are giving you the respect and care you deserve.”
However, Martin Kaiser, the head of Greenpeace Germany, described the agreement on a loss and damage as a “small plaster on a huge, gaping wound”.
While major emerging economies such as China would not automatically have to contribute, that option remains on the table. This is a key demand by the European Union and the United States, who argue that China and other large polluters currently classified as developing countries have the financial knowledge and responsibility to pay their way.
Next year’s talks will see further negotiations to work out details of the new loss and damage fund. According to the agreement, the fund would initially draw on contributions from developed countries and other private and public sources such as international financial institutions.