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Article | 30 November 2022 | ESG
COP27: breakthrough on compensation; frustration on emissions
Fraught negotiations at the COP27 in Egypt produced a landmark deal. This should see vulnerable countries compensated for the acute damage caused by climate change. Under the new framework agreement, richer countries will pay into a “loss and damage” fund, which poorer countries suffering some of the worst effects of climate change will be able to draw on. This could help tiny islands where rising sea levels pose an existential threat or countries facing more severe weather events.
It is hoped the new fund will be launched during 2023. Key details are still to be agreed, including who precisely foots the bill and which countries are defined as vulnerable. A critical point of contention is that developed countries want China, currently the world’s biggest carbon polluter, to pay into the fund.
Despite this landmark agreement, many will remember COP27 for its lack of progress on fighting the causes of global warming. India pushed a plan to end the use of all fossil fuels, but this was blocked by strong opposition from oil producers such as Saudi Arabia and Russia.
Scientists warned that the world is currently significantly behind where it needs to be, if the goal of limiting global warming to no more than 1.5°C is to be reached. It would require a 45% cut to emissions before 2030, in order to reach net zero emissions by 2050. The can has been kicked down the road to COP28 in Dubai next year. And nations might have to commit to more ambitious reductions in emissions if the 1.5°C target of the Paris Agreement is to be kept alive.
Architas view
The emphasis of this year’s COP27 communiqué was more focused on remedying past damage, than on solutions to limit future damage. Nonetheless, it’s a good sign that developed countries appear increasingly willing to show solidarity with their developing counterparts on climate matters. Exactly who will be eligible to receive the funding, who will contribute and how much are vital questions. But there is hope that we could see more cooperation between richer and poorer countries in the years ahead, in a bid to combat global warming.
