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This year’s COP meetings that were supposed to be held in Sharm el-Sheikh, Egypt from November 6-18, but had to go into overtime and spilled over to November 20 to show some meaningful progress in terms of needed climate action. On the bright side, the COP meetings for the first time were able to reach consensus on setting up a loss and damage fund.

A recent Guardian published article ‘World still “on brink of climate catastrophe” after COP27 deal’ pointed out in this regard: ‘The agreement reached in Sharm el-Sheikh early on Sunday morning, after a marathon final negotiating session that ran 40 hours beyond its deadline, was hailed for providing poor countries for the first time with financial assistance known as loss and damage.

A fund will be set up by rich governments for the rescue and rebuilding of vulnerable areas stricken by climate disaster, a key demand of developing nations for the last 30 years of climate talks.’

Having said that, the fund needs a long way to meaningfully provide for the current and highly probable damage needs of countries.

The same article indicated in this regard: ‘The world still stands “on the brink of climate catastrophe” after the deal reached at the COP27 UN climate summit on Sunday, and the biggest economies must make fresh commitments to cut greenhouse gas emissions, climate experts and campaigners have warned.’

With regard to the loss and damage fund, the revised draft decision ‘Funding arrangements for responding to loss and damage associated with the adverse effects of climate change, including a focus on addressing loss and damage,’ of COP27 meetings, published on November 19, 2022, pointed out the developments as follows: ‘Decide to establish new funding arrangements for assisting developing countries that are particularly vulnerable to the adverse effects of climate change, in responding to loss and damage, including with a focus on addressing loss and damage by providing and assisting in mobilizing new and additional resources, and that these new arrangements complement and include sources, funds, processes and initiatives under and outside the Convention and the Paris Agreement. …

Establish a transitional committee on the operationalization of the new funding arrangements for responding to loss and damage and the fund established in paragraph 3 above (hereinafter referred to as the Transitional Committee)… for consideration and adoption by the Conference of the Parties at its twenty-eighth session (November–December 2023) and the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement at its fifth session (November–December 2023) with a view to operationalizing the funding arrangements…’

While establishing a loss and damage fund – although taking three decades to reach a consensus on this, which is indeed lamentable – is a significant achievement. A recent Financial Times (FT) published article ‘COP27: UN climate summit ends in discord after agreeing help for poor nations’ pointed out in this regard: ‘Negotiators at the COP27 summit in Egypt agreed to set up the new structure by the time of the next annual summit in 2023; contributors and recipients will be determined by a committee of countries. African and other developing world leaders were jubilant. Pakistan’s climate minister Sherry Rehman described it as “an investment in climate justice”.’

Having said that, filling the likely huge funding gap will require continued, meaningful commitment by rich countries. An article ‘Five crucial issues in fight to save planet – and what Cop27 did about them’ published recently by Guardian, highlighted these concerns in the following words: ‘Global warming has been caused by industrial nations who used fossil fuels to enrich themselves.

They should therefore reimburse countries who are suffering most from climate change. Such “loss and damage” claims include Pakistan’s recent $30bn bill for its flooding. … “The one bright spot at COP27 has been a renewed seriousness around loss and damage, with hundreds of millions committed via various schemes,” said geographer Laurie Parsons from Royal Holloway, London University. “Major concerns remain, however. The total funding required for adaptation is at least $2.5 trillion by 2030, so we are still orders of magnitude out.”’

One real let-down at COP27 meetings was a lack of commitment shown by countries in terms of cutting greenhouse gas emissions – something pivotal in keeping global average temperatures below the desired barrier of 1.5 degree centigrade.

In a major setback, the COP27 decision even backtracked on the achievement of COP26 in this regard.

So, on one side, while it is indeed important to provide climate-related reparations to affected countries, that alone will indeed fall well-short of reining in global average temperature, so that this significant cause of climate catastrophes is reduced in the first place.

The same FT published article pointed out in this regard: ‘But the talks ended in discord after negotiators failed to reach a deal on greater cuts to greenhouse gas emissions and an end to fossil fuel use. …the final agreement included the need for “low-emission” energy — which would allow the continued production of fossil fuels when paired with carbon capture technology.

EU climate chief Frans Timmermans said the result was “not enough of a step forward for people and planet”. …Germany’s foreign minister Annalena Baerbock said the conference had been “stonewalled by a number of large emitters and oil producers”. …UN secretary-general António Guterres… also voiced his discontent with failure on global warming targets.

“Our planet is still in the emergency room. We need to drastically reduce emissions now — and this is an issue this COP did not address,” he said.’

Here, while the frustration of rich countries is indeed understandable, and indeed no stone should be left unturned to meet the needed global warming targets and related net-zero carbon reduction timelines, it is also important that in addition to providing for reparations in the shape of creating a loss and damage fund, a more holistic ‘fiscal space’ understanding needs to be reflected in the thinking of rich countries, especially in terms of decision-making at COP27.

So, for instance, climate finance-related commitment of providing $100 billion to developing countries by 2020 should not have been missed.

Then in order to create much more fiscal space available with developing countries, so that they can be better placed to pan for needed green transition – although not an excuse that developing countries should move more vociferously even without the international help, given the existential nature of threat of climate change - multilateral institutions like the International Monetary Fund (IMF) should be asked by rich countries to move away, for instance, from both the policy of charging ‘surcharges’ on late payments by loan recipient countries, and misplaced over-emphasis of their programme related conditionalities on austerity and procyclical policies.

And more than supportive words and lukewarm commitment, the action plan in the shape of ‘The Bridgetown Initiative’ championed by the Barbadian Prime Minister, should have been given more consequential commitment, especially with regard to special drawing rights- related aspects.

Then at a more micro but highly consequential level, the layout of the COP meetings – including the COP27 ones – in terms of little ‘physical space’ for developing countries to raise greater audience, and leave a more impactful imprint in terms of outreach, also remains a big concern, and has remained a big deficiency at the operational side of the COP meetings.

Hence, a remedy that has come out is that rather than ‘money’ basically deciding how much space a particular country/other participants receive – where some developing countries, and among them highly climate vulnerable countries, could not even afford to buy any meaningful space – an equally proportioned space is provided to all participants in subsequent COP meetings.

In this regard, editor of FT’s ‘Moral Money’ publication, Simon Mundy in his November 21 article in that publication pointed out: ‘Wandering through the Blue Zone that is the central hub of every COP, I encountered everything… we could at least reconsider the current “pay to play” model that massively privileges the voices of wealthy countries and businesses over low-income nations.

Vast stretches of the Blue Zone were given over to branded “pavilions” where countries, companies and large non-profit groups pushed their respective agendas. …big fossil fuel producers also went large: the United Arab Emirates got 1,001m2, while liquefied natural gas leader Qatar had 416m to promote the interests of its 2.9mn citizens. …Meanwhile, Pakistan and Bangladesh, two countries direly exposed to climate impacts, with 390mn people between them, got 100m2 each.

Malawi got 9m2, the same as the University of Plymouth pavilion next to it. Other countries desperately vulnerable to climate impacts, from Afghanistan to Nepal to Bolivia, didn’t have a pavilion at all.’

Copyright Business Recorder, 2022

Dr Omer Javed

The writer holds a PhD in Economics from the University of Barcelona. He previously worked at the International Monetary Fund. He tweets @omerjaved7

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