Cop27: UN puts out draft text on thorny issue of 'loss and damage'

The UN on Monday put out a draft text on resolving the thorny issue of "loss and damage" amid growing concern whether its climate conference in Egypt would live up to its billing as the "implementation summit".

Vague and including a range of options, the draft text sets out what this year's climate summit, Cop27, could agree upon the subject of "loss and damage" — a negotiation phrase that means rich industrialised countries should bankroll efforts by developing nations to adapt to and mitigate the impact of climate change.

At the heart of the issue is the fact that rich nations are responsible for the vast majority of greenhouse gas emissions while developing nations, whose responsibility for climate change is insignificant, are the hardest hit.

The draft text, which could still be changed, included a reference to the establishment of a UN-administered fund. Other options included a fit-for-purpose fund under the UN and the strengthening of existing entities and public finance, including grants.

It was not immediately clear whether the industrialised nations have agreed to the UN draft text, or parts of it, but available evidence suggests that it could prove a hard sell. Still, it offered a glimmer of hope that a breakthrough might still be attainable.

Already, the US, through its special climate envoy John Kerry, has said it did not want a dedicated financial body or mechanism created to channel funds to the developing countries hit by climate change.

“This is just not happening,” Mr Kerry said at the weekend in the Red Sea resort of Sharm El Sheikh, dampening the optimism felt by many developing nations when loss and damage was added to the official agenda of the annual climate talks for the first time after years of opposition from rich nations.

Officials from the US and other rich countries say there are already existing funding mechanisms, including the Adaptation Fund established in 2001, the Green Climate Fund established in 2010 or the Global Shield.

The last of these is a new G7-backed initiative called “Global Shield against Climate Risks.” It was launched on Monday with initial funding of more than $200 million to provide “pre-arranged financial support designed to be quickly deployed in times of climate disasters”.

Germany said it was contributing €170m ($175m) while Ireland committed to give €10m.

Anxiety that the summit might fail to reach agreement on new targets and the implementation of resolutions adopted in previous years, as well as some form of compromise on the issue of loss and damage, is becoming evident in comments by senior delegates and the Egyptian hosts.

With just five days left before the scheduled end of the talks, the risk is that negotiations become entangled around the most controversial issues, preventing representatives from reaching an agreement by Friday and delaying the process by a full year, until Cop28.

There was, however, a ray of hope on Monday when news broke that the US and China — the world's two biggest emitters of greenhouse gas — have agreed to resume their formal contacts on climate change. The agreement was reached by the two rivals during the summit of the Group of 20 nations taking place in Bali, Indonesia.

But for now, there is already talk that the summit might not wrap up by Friday as scheduled and could extend into the weekend to give negotiators more time.

On issues where not enough progress has been made, delegates have been given two more days to work out differences. Pairs of ministers — one from a developing nation and the other from a rich one — will have until Thursday night to reach agreement on a given topic.

Egyptian Foreign Minister Sameh Shoukry, president of Cop27, struck a note of anxiety when he addressed a plenary meeting on Monday. Time was running out for a deal by Friday, he said.

Mr Shoukry, alluding to loss and damage, said the ongoing talks would focus on “co-operation and facilitation” not “liability or compensation”. Compromise is necessary to reach a “conclusive decision” before the Cop28 meeting in the UAE next year, he told delegates.

UN Climate Secretary Simon Stiell also appealed for constructive diplomacy to match the high-flying rhetoric heard during the opening days of the talks.

“Let me remind negotiators that people and planet are relying on this process to deliver,” Mr Stiell said.

“Let’s use our remaining time in Egypt to build the bridges needed to make progress.”

South Africa's Environment Minister Barbara Creecy has called for immediate financial aid for developing countries hit by climate disasters, throwing the ball back into the court of the US and rich European nations.

Wealthy countries should provide aid through a so-called loss and damage mechanism, and multilateral development banks should be recapitalised to provide more finance to tackle global warming, she said at the weekend.

“From the perspective of the African Group of Negotiators, we do need to see immediate support for loss and damage on the continent,” Ms Creecy said.

Jamaica echoed South Africa's sentiments, saying a “settled road map” on setting up a loss and damage finance facility needed to be in place by the end of Cop27 for the climate conference to be considered a success.

“The reality is that we haven’t yet settled even on the mechanisms to deal with the discussions or the negotiations on loss and damage going forward,” said chief Jamaican delegate Matthew Samuda, the Caribbean island's minister without portfolio in the Ministry of Economic Growth.

“The expectations for 2024 are at risk if we leave Cop without a settled road map.”

The summit’s second week is when negotiators double down on the details of outstanding issues as ministers arrive to work on breaking the deadlock.

Besides the talks on loss and damage, a key element will be the kind of “cover decision” the summit’s Egyptian presidency pursues. The document signals the political action countries are willing to take to meet their climate commitments.

Separately, Brazilian president-elect Luiz Inacio Lula da Silva was due to arrive in Sharm El Sheikh on Monday. He is expected to pledge to reverse the environmental policies of his right-wing predecessor and to protect the Amazon rainforest.

The trip will be his first international visit since beating incumbent Jair Bolsonaro in last month’s presidential run-off.

Mr da Silva, 77, who promised on the campaign trail to work towards zero deforestation, will address the conference on Wednesday, his press team said.