Tension mounts over loss and damage financing at COP27

All the negotiating blocks, state parties, observers and journalists are eyeing the decision on whether there will be a declaration for setting up a finance facility for addressing loss and damage.

Tension is mounting as it is not clear if all the parties will agree to the proposal of creating a loss and damage fund.

Compensation for loss and damage occurring in the climate vulnerable countries is a decade-long issue which is discussed at climate conferences each year. However, every year the issue was sidelined and never entered into the main agenda.

This year in COP27, the loss and damage finance facility came into the agenda list for the negotiation. Since the issue was included in the agenda on November 6, it came to the centre of the discussion, gossiping and negotiation. Now it is the talk of the town.

A total of 136 countries including negotiating block G77+China, 38 Least Developed Countries (LDCs) block, 8 countries of Independent Alliance of Latin America and the Caribbean (AILAC) and 39 states of Alliance of Small Island States (AOSIS) are pushing the negotiation to set up a finance facility this year named 'Sharm el-Sheikh Loss and Damage Finance Facility'.

The developed countries which are the biggest polluters and who will pay the money are also not denying the need for it. But they use tactics to cause delays. The developed countries want to waste time by saying that they are in an economic crisis and the discussion is not mature enough to make any declaration right now.

However, sensing the denial of some developed world, AOSIS, G77+China and LDC countries called an urgent press conference on Thursday at the conference venue. They urged the political commitment to declare finance facility this year as there is no more scope for delay.

They called the press conference at such a time when the two-week-long conference has only one day left to come to a final decision.

Moreover, to include any declaration in the final cover text of the conference, all the parties must come to a consensus. If a single country denies then it will not be possible, according to the rule of the United Nations Framework Convention on Climate Change (UNFCCC).

“We do have to go forward with, at the very least, a political announcement of intent because that is needed. The political will to take loss and damage forward,” Sherry Rehman, Pakistan’s Federal Minister for Climate Change said in the press conference while she was representing the G77+China block.

Molwyn Joseph, Minister of Health, Wellness and the Environment of Antigua and Barbuda said. “We are asking this time not for a strong comprehensive solution but for one single decision to establish a loss and damage fund.

“The message is clear. We need to establish the fund as a first step,” said Molwyn a representative from AOSIS countries.

He also called for not leaving the conference without establishing a loss and damage fund.

All the ministers described the vulnerability of the people of their own country as well as regional and global losses and damages happening due to different climatic events.

Alioune Ndoye, Minister of Environment, Sustainable Development and Ecological Transition of Senegal, representing the LDC group, and Javier Canal Alban, Vice-Minister of Environmental Planning of the Territory, Bogota representing the Independent Association of Latin America and the Caribbean (AILAC) also spoke in the press conference.

Dr Saleemul Huq, Director of ICCCAD, and one of the best theorists on loss and damage told The Business Post, “It is in the agenda, it is our primary victory. According to the agenda, the discussion will continue to COP29. And it will be implemented from COP30.”

“That is why it is needed to set up the finance facility this year. Once the facility is set up, in the next two years we will discuss who will pay the money, how much will be paid, how the money will be channelled, how the fund will be operational and so on,” he added.

“Our first task is to set up a finance facility for loss and damage and that has to be a separate fund,” Saleemul said.

Saber Hossain Chowdhury is the chairman of the Parliamentary Standing Committee for the Ministry of Environment, Forest and Climate Change, Bangladesh. He is leading the thematic negotiations on behalf of the LDC group.

Saber told The Business Post, “No one is denying the proposal. But developed countries just want to waste the time by delaying it. If a single country said they are not ready to set up the fund, it will not be possible to set up the fund.

“However, probably we will have another chance to negotiate before the conference ends,” he said.

This Story was produced as part of the 2022 Climate Change Media Partnership, a journalism fellowship organised by Internews’ Earth Journalism Network and the Stanley Center for Peace and Security.