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‘Loss and damage’ fund okayed at COP27

Participants arrive at the Sharm el-Sheikh International Convention Centre, during the COP27 climate conference in Egypt's Red Sea resort city of the same name, on Nov 17, 2022. (MOHAMMED ABED / AFP)

The 27th Conference of the Parties to the United Nations Framework Convention on Climate Change, or COP27, concluded on Sunday with the reaching of a historic agreement to provide "loss and damage" funding to vulnerable countries most affected by global climate change.

"This COP has taken an important step towards justice. I welcome the decision to establish a loss and damage fund and to operationalize it in the coming period," UN Secretary-General Antonio Guterres said in a video message issued from the conference venue in Sharm El-Sheikh, Egypt.

Developing countries have long called for financial compensation for their loss and damage caused by global warming, which has been mostly attributed to industrialized countries that have emitted the bulk of greenhouse gases in recent centuries

"Clearly this will not be enough, but it is a much-needed political signal to rebuild broken trust," he said, adding that the UN system will support the effort every step of the way.

For the first time, "loss and damage" was a primary agenda item for discussion during this year's gathering. Developing countries have long called for financial compensation for their loss and damage caused by global warming, which has been mostly attributed to industrialized countries that have emitted the bulk of greenhouse gases in recent centuries.

ALSO READ: COP27 deal delivers landmark on 'loss and damage', but little else

During this year's session, developing countries also repeatedly called for developed countries to fulfill their promise to provide $100 billion each year to developing countries to help them fight climate change, a pledge made during COP15 in Copenhagen, Denmark, 13 years ago.

Simon Stiell, the UN's climate change executive secretary, said of the agreement, which was reached on Sunday after days of intense negotiations among countries, "At COP27 … we've determined a way forward on a decadeslong conversation on funding for loss and damage."

Pollution rises from the BASF chemical plant in Ludwigshafen, Germany on Nov 7, 2022. (MICHAEL PROBST / AP)

Pakistani Foreign Minister Bilawal Bhutto Zardari said it is a "win for climate justice, a win for the developing world in honor of 33 million victims of Pakistan floods and millions around the world who suffer from a climate catastrophe they did not create and do not have resources to address"

The negotiations were difficult, but "this historic outcome does move us forward and it benefits the vulnerable people around the world", Stiell said.

"Let's use this success as a springboard to restore trust in our process. Let's use it to achieve greater ambition and faster implementation," he said on his social media.

ALSO READ: EU tells COP27 it will increase climate ambition

Pakistani Foreign Minister Bilawal Bhutto Zardari, commenting on the "loss and damage" agreement, said it is a "win for climate justice, a win for the developing world in honor of 33 million victims of Pakistan floods and millions around the world who suffer from a climate catastrophe they did not create and do not have resources to address".

In addition to agreeing to set up a dedicated fund, countries attending COP27 also committed to establishing a transitional committee to make recommendations for countries to adopt at COP28 next year, according to a UN news release.

Internally displaced flood-affected people take refuge in a camp at Kotri in Jamshoro district of Sindh province, Pakistan on Sept 28, 2022. (RIZWAN TABASSUM / AFP)

UN Secretary-General Antonio Guterres said that much more needs to be done to prevent the worsening of climate change, such as accelerating the phasing out of coal and the development of renewable energy

While emphasizing that a fund for loss and damage is essential, Guterres said that much more needs to be done to prevent the worsening of climate change, such as accelerating the phasing out of coal and the development of renewable energy.

The UN chief also stressed the need for developed countries to honor their long-delayed promise of providing $100 billion a year in climate change mitigation financing for developing countries.

READ MORE: EU eyes middle path on climate damage fund to unblock COP27 talks

Mahmoud Mohieldin, the UN Climate Change High-Level Champion for Egypt, said the $100 billion figure should be scaled up to meet the evolving needs of developing countries today. "People who have done the least to cause the climate crisis are paying the highest price. Africa accounts for no more than 3 percent of global emissions, yet many of its people are suffering the most from climate change," he said.