In COP27 overtime, world leaders reach deal on climate disaster aid for vulnerable nations

Negotiators clinched a deal in overtime at the U.N. climate talks at Sharm el-Sheik, Egypt, for rich nations to compensate poorer nations grappling with the effects of global warming.

The deal calls for the establishment of a dedicated fund that helps developing countries by paying for so-called loss and damage, or reparations, from climate-affected droughts, floods and other extreme weather.

Governments also agreed to set up a transitional committee for making recommendations on the new fund at COP28 next year. Its first meeting is expected to be held during the first quarter of next year.

The deal marked an important turning point in the decades-old movement for climate justice. But there were major compromises: No new emissions reductions, despite requests from more than 90 nations to phase out oil and gas use that were blocked by the COP27 Egyptian presidency as host of the talks, and no direct links or earmarks for the funding to any form of official liability or reparations that rich nations worried could usher in endless claims.

Almost 12,000 of the more than 35,000 participants at the talks came from NGOs, including 636 fossil fuel lobbyists, according to a report from Global Witness.

Despite the lobbyists' presence, nations at COP27 made decisions that reaffirmed their commitment to the 2015 Paris Agreement's preferred goal of limiting global warming to 1.5 degrees Celsius, which would require a 43% emissions cut since the planet has warmed by 1.2 degrees C, according to Stiell's organization.

Along with cutting greenhouse gas emissions, it said, nations "strengthened action" to cut greenhouse gas emissions, adapt to climate change and increase support of finance, technology and capacity-building needed by developing countries.

But with rich nations failing to mobilize US$100 billion a year by 2020 as previously agreed, the COP27 summit also called for a new collective quantified goal on climate finance in 2024, taking into account the needs and priorities of developing countries, according to Stiell.

“In this text we have been given reassurances that there is no room for backsliding,” he said. “It gives the key political signals that indicate the phasedown of all fossil fuels is happening.”

As the summit neared an end, the E.U.'s Executive Vice President Frans Timmerman told reporters he and all the ministers from the 27-nation European bloc were "prepared to walk away if we do not have a result that does justice to what the world is waiting for."

He said the E.U. "worried about some of the things we have seen and heard" because they would not meet the 1.5 degrees C. goal.

Egypt's Foreign Minister Sameh Shoukry, who served as president of COP27, warned of gridlock over polluters' resistance to developing countries' push for a loss and damage fund. The summit outcome was evidence that "multilateral diplomacy still works," he said.

"Despite the difficulties and challenges of our times, the divergence of views, level of ambition or apprehension, we remain committed to the fight against climate change," he said. "We rose to the occasion, upheld our responsibilities and undertook the important decisive political decisions that millions around the world expect from us.”

At a press conference, Shoukry said the negotiating text contained minor compromise amendments but would still accomplish the 1.5 degree C. goal.

He said the "loss and damage" fund would compensate poor nations that are victims of extreme weather caused in large part by wealth nations' carbon pollution. But the fund also would require contributions from major economies such as China and Saudi Arabia, as demanded by the E.U. and the United States.

The E.U. proposed offering more money for poor countries to deal with climate disasters on condition that all nations phase out oil, natural gas and other fossil fuels and commit to deeper cuts in carbon pollution.

U.N. Secretary-General António Guterres, who flew back to Egypt for the summit's final hours to prod negotiators to reach a deal, said the summit took "an important step towards justice" for people who live on the frontlines but did so little to cause the climate crisis – including the victims of Pakistan's devastating floods that inundated one-third of the country.

"I welcome the decision to establish a loss and damage fund and to operationalize it in the coming period," he said. "Clearly this will not be enough, but it is a much-needed political signal to rebuild broken trust. The voices of those on the frontlines of the climate crisis must be heard."

He said the world must "massively invest in renewables and end our addiction to fossil fuels" for there to be any hope of sticking to the 1.5 degrees C. limit.

"We must avoid an energy scramble in which developing countries finish last – as they did in the race for COVID-19 vaccines. Doubling down on fossil fuels is double trouble," said Guterres. "COP27 concludes with much homework and little time."

Net negative vs. net zero

The summit called on wealthy polluting nations to reach "net negative" carbon emissions by 2030. That would be far more substantial than the net zero goals of the E.U. and United States by 2050 and China by 2060.

Scientists say the world was headed for 4.5 degrees C. of warming by the end of this century compared to pre-industrial levels in roughly the year 1750, but efforts since the 2015 Paris Agreement have lowered the global forecast to 2.6 C.

That is still far above the Paris treaty's upper limit of 2 degrees C., which would require a 27% reduction in carbon emissions by the end of this decade.

European officials say the language remains too vague and tries to cover too many topics to reach meaningful agreement before the summit ends. In many years past, however, negotiators worked overtime into the weekend – sometimes with success.

Germany's Foreign Minister Annalena Baerbock said the outcome gives rise to both hope and frustration because her nation wanted more binding commitments that were rejected by an alliance of oil-rich countries and major emitters.

"There is hope in seeing what is possible when states join forces across old north-south boundaries. We have achieved a breakthrough on climate justice, with a broad coalition of states, after years of deadlock. And we were able to prevent a backslide behind the consensus of Glasgow and Paris and to defend 1.5," she said.

But, she added: "It is more than frustrating to see overdue steps on mitigation and the phase-out of fossile energies being stonewalled by a number of large emitters and oil producers. The world is losing valuable time to move towards 1.5 degrees."