Cop27: Historic deal reached to create climate damages fund but fails in ambitious emissions cuts

Cop27 has reached a historic agreement on a fund to compensate vulnerable countries for irrevocable climate damages - but there was disappointment that it did not go far enough to slash the greenhouse gas emissions spurring runaway climate change.

The gruelling two-week conference continued into Sunday morning in Sharm el-Sheikh, Egypt after a marathon negotiating session went through the night.

Out of the exhaustion, conflict and compromise, ultimately came jubilation on the contentious issue of loss and damage. All 197 countries agreed to establish a financial fund for assisting developing countries that are particularly vulnerable to the impacts of the climate crisis.

The agreement sets up a transitional committee with representatives from 24 countries that will work on establishing how the fund should work, and where the money should come from.

The group of nations will then present its recommendations at Cop28 in the United Arab Emirates next year, with a view to making the fund operational.

However, Cop27 did little to cut the carbon emissions which are heating the planet, and continue to rise.

The final deal reaffirms what was said in the Glasgow agreement, resolving to “pursue further efforts to limit the temperature increase to 1.5C,” but does little to up the ambition on cutting emissions.

The Alliance of Small Island States, a group representing some developing and vulnerable nations, celebrated the commitment to loss and damage reparations soon after the announcement.

“AOSIS promised the world we would not leave Sharm El Sheikh without achieving the establishment of a loss and damage response fund. A mission thirty years in the making has been accomplished,” read a statement from AOSIS chair, Molwyn Joseph of Antigua and Barbuda.

Developing and poor countries, suffering the worst climate impacts despite small carbon footprints, have called for loss and damage to be addressed for decades. The issue finally made it into Cop27 negotiations after the Egyptian presidency shepherded it onto the official Sharm agenda.

“The work that we’ve managed to do here and the results we have together achieved are a testament to our collective will as a community of nations to voice a clear message that rings loudly today, that multilateral diplomacy still works,” said Cop27 president, Egypt’s foreign minister Sameh Shoukry.

He spoke to the “anguish and despair” in Pakistan after catastrophic flooding this summer which killed more than 1,700 people and left tens of thousands of people displaced. Mr Shoukry described it as a “resounding alarm” of what awaits us beyond the 1.5C temperature limit.

Sherry Rehman, climate change minister for Pakistan, spoke on behalf of the G77 and China group which contains many vulnerable countries.

“The establishment of a fund is not about charity, it is a down payment and investment in our joint futures ... a down payment on climate justice,” she said.

There was a breakthrough on establishing a fund on Saturday after the United States reversed its opposition to a fund. The US had been long opposed to a loss and damage fund over fears of legal liability as it is historically the world’s largest polluter.

Talks dragged on 36 hours after the conference officially ended with countries struggling to overcome rifts on major issues such as temperature targets and phasing out the use of fossil fuels.

Cop26 President Alok Sharma said in his speech at the closing plenary session of the UN climate summit overnight that in Glasgow the pulse of 1.5C was weak, but now “unfortunately, it remains on life support”, after the failure to do more to limit global heating at this year’s summit.

“All of us need to look ourselves in the mirror, and consider if we have fully risen to that challenge over the past two weeks,” he said.

The agreement fails to call for phasing down fossil fuels, the primary cause of the global climate crisis.

Instead, it repeats the language in the Glasgow Climate Pact calling on countries to accelerate efforts towards the “phasedown of unabated coal power and phase-out of inefficient fossil fuel subsidies ...”, failing to build on its ambition.

India had called for the agreement to broaden the language to include a phasedown of all fossil fuels, rather than singling out coal.

The South Asian country is particularly reliant on coal power, which has the dirtiest carbon footprints of the main fossil fuels, but was supported in its call by several countries and the European Union.

The deal also fails to reflect calls that it should emphasise the need for emissions to peak in 2025 - the deadline for keeping 1.5C “alive”, according to the latest climate science.

And the language calling on countries to increase their efforts to cut emissions is also considered to be weak.

The text urges nations that have not yet strengthened their emissions-reduction plans to do so before Cop28 in the United Arab Emirates next year.

But last year’s Glasgow agreement had already requested countries to “revisit and strengthen” their 2030 climate plans by the end of 2022, with only a handful doing so.

The emissions-reduction plans submitted ahead of Cop27 take less than 1 per cent off projected global emissions in 2030.

Scientists say we must cut emissions by 43 per cent to hold temperature increases to the 1.5C limit set out by the Paris Agreement.

Speaking on behalf of the European Union, Frans Timmermans, European Commissioner for Climate Action, applauded the creation of the loss and damage but said that vulnerable countries also deserved more ambition from big polluters on cutting emissions.

He said that at the Sharm el-Sheikh conference there were “too many attempts to roll back on Glasgow” and major emitters were not doing enough.

Cop27 did not address the “yawning gap between climate science and climate policy” he said, and did not establish a clear path to remaining at 1.5C.

“We have to find the courage to do more,” he said.