Funding for loss and damage is officially on the agenda at COP27, as leaders have called on the Global North to do more to compensate the Global South.
This represents the first time in the history of the UN climate negotiations that there has been a formal agenda item dedicated to considering funding arrangements for responding to loss and damage associated with the adverse effects of climate change.
A small, but growing, number of developed countries are also committing finance towards loss and damage.
Yesterday, Austria committed EUR 50 million in finance for loss and damage, becoming just the fifth developed country to commit funding to address loss and damage in developing countries.
The other countries to have made similar commitments are Germany, Belgium, Denmark and Scotland, with Scotland’s First Minister, Nicola Sturgeon announcing a pledge of an additional £5 million, following Scotland’s pledge at COP26 of £2 million.
Whilst these developments fall well short of the demands of developing countries, they represent a significant step forward from previous UN climate summits. Developed countries have historically blocked any progress on funding for loss and damage.
It remains early days in the formal negotiations on funding for loss and damage, and we will closely track developments as COP27 progresses.
Nevertheless, there appears to be strong momentum and political attention, with UN Secretary-General Antonio Gutierres emphasising that “loss and damage” is a “moral imperative and a fundamental question of international solidarity and climate justice”.
Citing the “growing number of catastrophic events causing enormous suffering around the world”, Mr Gutierres cautioned the more than 100 world leaders in attendance that climate-induced “loss and damage” could “no longer be swept under the rug by the international community”.
We understand that a number of heads of government joined the informal consultations on funding arrangement for loss and damage, with one calling for a loss and damage response fund to be established as an operating entity of the UNFCCC’s Financial Mechanism. It is rare for high level representatives to get involved in the day to day negotiations in this way, demonstrating the critical importance of the issue.
Climate Implementation Summit
The Egyptian Presidency opened COP27 with a two day ‘Climate Implementation Summit’, which has brought together world leaders to discuss issues ranging from a just energy transition to water security in a series of high-level roundtable sessions.
At the opening of the Summit, Mr Gutierres took to the podium to call for the establishment of a “climate solidarity pact” between developed, developing and emerging economies. Under the pact, wealthier countries and financial institutions would provide financial and technical support to emerging economies to accelerate their transitions to renewable energy.
Mr Gutierres singled out the USA and China, as the world’s largest economies, as having a “particular responsibility to join efforts to make this pact a reality”.
Increased investment in renewable energy, particularly in emerging economies, is both a necessity for limiting global warming and a real opportunity for investors and project developers.
In a similar vein, South Africa, along with France, Germany, the UK and US launched the Just Energy Transition Investment Plan, which is a USD 8.5 billion investment in shifting from coal to green energy.
Other points of interest you may have missed
- China’s lead climate envoy, Xie Zhenhua publicly affirmed China’s commitment to carbon neutrality, although the prospects of the US and China resuming bilateral climate negotiations remain uncertain.
- Australia were among a number of countries to sign up to the US and Norway-led ‘Green Shipping Challenge’ that launched on day 1 of COP27. The challenge is an international pledge to ‘encourage governments, ports and companies to prepare commitments to spur the transition to green shipping’.
- The EU entered into Memoranda of Understanding with Guyana, Mongolia, the Republic of Congo, Uganda and Zambia for Forest Partnerships, which represent an ‘external dimension’ to the EU Green Deal. The purpose of these partnerships is to cooperate to ensure sustainable forest management, stimulate the forest bio-economy, and to reduce deforestation and forest degradation.
- The UN’s High Level Expert Group on Net-Zero Emissions Commitments of Non-State Entities published its first report, which focuses on integrity in setting and achieving voluntary net-zero targets. The report makes 10 recommendations, which are broadly aligned with existing initiatives including the Integrity Council for the Voluntary Carbon Market, the Voluntary Carbon Markets Integrity Initiative, and the Science-Based Targets Initiative.
- The Africa Carbon Markets Initiative (ACMI) in collaboration with the Global Energy Alliance for People and Planet, Sustainable Energy for All and the UN Economic Commission for Africa launched a roadmap for scaling voluntary carbon markets in Africa.
- The US White House issued a Nature Based Solutions Roadmap, marking the first time that the US has developed a strategy to scale up nature based solutions.
This post was written by Edward McCombe and Sophie Whitehead. The authors would also like to acknowledge Charlie Bevis for his ‘on the ground’ insights.