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The new fund will support poorer countries that have been affected by disasters as a result of the climate crisis, though it may take some time to be developed.
An agreement has been reached at COP27 to set up a “loss and damage fund”, providing financial assistance to developing countries impacted by the climate crisis.
The fund aims to support poorer countries hit by climate disasters and slow onset issues such as rising sea levels, ocean acidification, loss of biodiversity, desertification and rising temperatures.
The commitment was reached at the end of the UN’s climate conference, which took place this year in the Egyptian coastal city of Sharm el-Sheikh. The two-week event saw nearly 200 heads of state and governments attend, with roughly 35,000 participants focused on climate action.
This included Taoiseach Micheál Martin, who told world leaders that this generation must “step up urgently” to tackle the climate crisis.
Speaking yesterday (20 November), Minister for the Environment, Climate, Communications Eamon Ryan, TD, said the climate compensation fund agreement is “historic and progressive”, but noted that the final text is a compromise from what was originally proposed by the EU.
“Progress on broadening the contributor base to now include the potential for innovative sources of funding could open the way for a landmark break from traditional thinking,” Ryan said. “Such sources could potentially include sectors like aviation, shipping and the fossil fuel industry.
“There is now scope for exploring the potential for financing and debt relief for especially vulnerable countries from multilateral and development banks.”
‘We have treated some of the symptoms but not cured the patient from its fever’
– URSULA VON DER LEYEN
The new loss and damage fund could take several years to be created, as more details need to be finalised such as who will oversee the fund and which countries will pay.
European Commission president Ursula von der Leyen said COP27 marks “a small step towards climate justice” but much more is needed to help Earth.
“We have treated some of the symptoms but not cured the patient from its fever,” von der Leyen said. “I am pleased that COP27 has opened a new chapter on financing loss and damage, and laid the foundations for a new method for solidarity between those in need and those in a position to help.”
She added that the conference has “kept alive” the goal of limiting the rise of global temperatures to 1.5 degrees Celsius, which was agreed at COP21 in Paris in 2015.
However, von der Leyen said the summit has not delivered on a commitment by “major emitters” to phase down fossil fuels, or new commitments on climate mitigation.
“But the EU will stay the course, notably through the European Green Deal and REPowerEU, because it is essential to keep the ambition of the Paris Agreement within reach.”
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