COP27 climate summit: Developed countries agree to offer loss and damage fund for poorer countries

The Conference of the Parties of the UNFCCC, 2022 concluded this Sunday and included some of the most revolutionary decisions for climate change. One of these decisions included a release of loss and damage funds for the poorer countries that were affected the most due to climate change, despite having a low carbon footprint. The developed countries agreed on contributing to this fund which will be used to strengthen the poor countries in terms of infrastructure and other means to fight climate change. This is the first time in thirty years that such a fund has been announced. The loss and damage fund will be quickly made available to the poor countries struck by natural disasters to assist them in rebuilding their infrastructure destroyed during the disaster. 

The Conference of the Parties of the UNFCCC or the United Nations Climate Change Conference is an annual conference that has been running since 1995. The 27th Conference of the Parties was an essential one as many poor countries suffered from natural disasters such as hurricanes, floods, heavy rains, landslides, etc. There have been many studies that have indicated that climate change and the occurrence of these natural disasters are closely related. But it has also been proved that the rich countries are the ones responsible for climate change due to their large-scale industrialization and high use of fossil fuels. Because of this, many of the developing and poor countries were united in COP27 for the loss and damage fund from these rich and developed countries. According to the developing and poor countries, the previous funds were inadequate and of no use as these funds used to take weeks to reach. But despite this, the rich countries were completely against bringing such funds despite clearly being responsible for climate change. Seve Paeniu, the finance minister of Tuvalu even said that there is no point in having such a fund if it takes three weeks to arrive after being struck by a hurricane. 

The European Union, the US, and the UK seemed completely against the idea of bringing such funds. Because of this, the idea of a loss and damage fund was met with some serious negotiations. These countries instead suggested adopting a “mosaic” approach to gather funding to support poorer countries. The mosaic approach includes gathering funding from various international institutions such as the World Bank and other financial institutions and many existing climate funds such as the Green Climate Fund, Global Environment Facility, and other national funds. The reason given by the rich countries for a mosaic approach is that it takes a significant amount of time to set up and fill a new fund. 

But this idea of a mosaic approach was completely denied by poor countries and climate activists. Teresa Anderson, the global lead for climate justice at ActionAid International said that developed countries always try to show that they care about the environment and poor countries, but when it comes to showing such, these countries always try to bail out of the idea of establishing financial support. Later on Friday, the European Union agreed with the developing countries to set up such a fund and to actively support them. But along with this, the EU demanded to also include the countries which were categorized as developing countries during the UN Framework Convention on Climate Change, 1992. This means that China will also be part of the contributing countries to the loss and damage fund.