There are indications of tangible progress at Cop27 as wealthy countries are increasing climate finance commitments, a pivotal issue for developing countries gathered at the UN summit in Egypt.
While some of the gestures by high-emitting countries are symbolic, it has lifted the mood among negotiators as they face into a week of difficult talks.
Emily Wilkinson of the ODI think tank said: “The growing number of country pledges on loss and damage funding are significant and welcome. We expect more countries to pledge during Cop27. This puts further pressure on negotiators to agree to the development of an appropriate financing mechanism.”
There are three types of climate finance; for cutting emissions (known as mitigation); adapting to inevitable climate impacts and loss and damage. The latter is most controversial and has been blocked for years by rich states who fear being liable for huge sums of compensation.
The UK said, however, it would allow some debt payment deferrals for countries hit by climate disasters, while Austria, Scotland and New Zealand put forward funding for loss and damage, which is the cost of rebuilding in poorer nations after unavoidable climate impacts.
Ireland has also got some credit for setting aside €10 million for loss and damage; specifically to help countries recover from climate-related disasters.
In addition, there is increased recognition for adaptation, so least developed countries and small island developing states, that have done little to cause the climate crisis, can prepare for inevitable climate shocks arising from current levels of carbon pollution.
Without progress under all these climate finance headings, developing countries will not trust developed countries and collective action will fail – and a weak outcome from Cop27 in Sharm El Sheik will be inevitable.
The UK said its export credit agency, which loans money to overseas buyers of British goods and services, will become the first agency to include “climate resilient debt clauses” in its lending. These stop debt payments for two years if a nation is hit by a climate disaster, freeing up funds to deal with the emergency.
“Climate shocks are increasing in frequency and severity which is why we are supporting countries hit hardest,” said James Cartlidge, a UK Treasury minister. “In the wake of a disaster, they face painful trade-offs between rebuilding their communities and making debt repayments.”
The move was strongly backed by Avinash Persaud, special envoy to the Barbados prime minister, Mia Mottley – the most prominent backer of major reforms to the global financial system to deliver climate finance.
“Adopting these clauses in debt instruments is the single most impactful way of making the international financial system fitter for the new world of shocks and for international development. I cannot commend this initiative by the UK government enough,” he added.
Mottley’s Bridgetown Agenda, which sets out sweeping proposed reforms to the World Bank, International Monetary Fund (IMF) and other multilateral development banks, has received the backing of France at Cop27, and chair of the Elders Mary Robinson who is to attend next week.
The French position is significant as it is the first developed country to support the agenda. A group of 10 developed nations, including all G7 countries, are also putting pressure on the banks to reform.
Mottley raised the idea at Cop27 of a 10 per cent tax on soaring fossil fuel profits to fund loss and damage.
Analysis by campaigners at Global Justice Now published on Wednesday suggests five big oil companies – Chevron, ExxonMobil, BP, Shell and Total – should be paying $65bn a year based on their contribution of 11 per cent of global emissions to date. Recent research showed oil and gas industry has delivered an average of $1tn a year in pure profit for the past 50 years.
“Our planet is rapidly overheating, disasters are proliferating and lives are being lost because governments have failed to take on the fossil fuel industry, failed to stop them from burning fossil fuels and failed to make them pay for the pollution they have caused,” said Global Justice Now director Nick Dearden.
He added: “The money is in the hands of those who created this crisis. They must clean up the mess. They must be forced to pay – through pollution taxes – for the damage they have caused, often knowingly. And we need to make headway on this urgently because the problem won’t go away. The longer we leave it, the bigger the cost of climate disasters is only going to get. This is an investment in a habitable, safe and secure future.”
Director-general of the International Committee of the Red Cross, Robert Mardini, welcomed progress on the loss and damage. “It’s encouraging to see steps being taken at Cop27 to support the most vulnerable to climate change. It’s essential that a greater proportion of climate finance reaches communities affected by conflict and violence to reduce people’s double vulnerability to climate risks and conflict,” he said.
“We’re already seeing these devastating effects in such places as Afghanistan, Somalia, Mali, and Yemen. Our work in these places helps people cope with the climate crisis. But humanitarian action alone is not enough to overcome the many challenges people suffering from violence and climate shocks face. Without decisive financial and political support to the most fragile countries, the suffering will only worsen,” he predicted. – Additional reporting Guardian
