COP27: Historic shift towards loss and damage financing

The Business Post

The UN climate talks COP27, which closed in Egypt on Saturday, started addressing the symptoms of the climate crisis in a breakthrough decision for the most vulnerable.

A historic progress was made with a commitment to set up a financial support structure for the most vulnerable to deal with “loss and damage” caused by the impact of the climate crisis by the next COP in 2023 as costs from extreme weather soar to over $200 billion annually. This year’s COP made about 340mn euro in new pledges for loss and damage.

Saber H Chowdhury, President of the Parliamentary Standing Committee on the Ministry of Environment, Forest and Climate Change (MoEFCC) and the recent LDC Group Ministerial Lead at COP27 for L&D negotiations leading to the adoption of the decision stated, “For Bangladesh, displacement is a major issue and the climate refugees it creates is a powerful instance of loss and damage when countries and communities do not have the capacity of means to adapt.”

“The decision at COP27 also includes the setting up of a transitional committee to finalise all the modalities and arrangements for this fund and we are hopeful that Bangladesh will be represented in this platform,” he added.

Dr Saleemul Huq, Director, International Centre for Climate Change and Development (ICCCAD) mentioned, “After trying for many years to get finance for loss and damage on the COP agenda and succeeding here in COP27 in Sharm Al Shaikh in Egypt, we are very pleased to have agreed to establish a fund for addressing loss and damage. This is a significant achievement for all countries together.”

COP27’s decision on loss and damage finance provided a reflection of the mindset with the hope to deal with the profound loss incurred by the vulnerable nationals. However, there is still no clarity on the terms of the funding arrangements. A reassessment of which countries pay and which receive will also be a major issue next year.

In the absence of an immediate source of funding, loss and damage pledges mostly went to the Global Shield and the UN early warning systems, with some commitments to the Santiago Network and country-specific projects.

Originally this article was published on November 21, 2022 at The Business Post.