One historic win for humankind and one step backwards

Developing nations broke a decades-long deadlock on loss and damage funding but no reference was made to the phasing out of all fossil fuels in the final text at Cop27, writes Anna Rawhiti-Connell in this excerpt from The Bulletin. To receive The Bulletin in full each weekday morning, sign up here.

Loss and damage fund agreed to

With Cop27 wrapping up, delegates from nearly 200 counties gathered at 4am yesterday (local time in Egypt) and agreed to set up a loss and damage fund to compensate nations that are victims of extreme weather worsened by rich countries’ carbon pollution. Applause broke out as Cop president Sameh Shoukry brought the gavel down on the document which represented the consensus. As the BBC’s Matt McGrath writes in a useful summary of the climate talks, Cop27 may have resulted in both the biggest win (loss and damage fund) since the Paris climate talks in 2015 and the biggest loss. The cover text (the final decisions) failed to include a reference to the phasing out of all fossil fuels, meaning no progress was made on cutting emissions. The Associated Press headlined the loss and damage fund as “calamity cash”.

“Some progress has been made but not at anything like the speed required”

Details of the loss and damage funding are scant and will be worked out over the next year. In comments provided by the Science Media Centre, Adrian Macey from the New Zealand Climate Change Research Institute said “At least another year will be needed to make the new ‘funding arrangements’ (note a fully stand-alone fund was a bridge too far) operational. Expect much more of the same fraught discussions”. Climate change minister James Shaw said the fund was a bright spot, acknowledging more could be done but that “activists from poorer countries have been pushing for something like this for years and it should be acknowledged as a significant step forward.” Overall Shaw described this COP as “much like any other, in that some progress has been made but not at anything like the speed required.”

How much should New Zealand contribute?

It’s hard to say how much contributing to a loss and damage fund will cost New Zealand. Newsroom’s Marc Daalder has done a back-of-the-envelope fairness calculation. “New Zealand considers its annual $325m climate finance spend on mitigation and adaptation a fair contribution to the global US$100b climate finance goal announced in 2009 in Copenhagen. Loss and damage in developing countries by 2030 is likely to total at least US$300 billion. A fair share contribution to covering that cost would imply close to $1b annually from New Zealand.”

Pacific nations flex their power

Sometimes developed nations paying their fair share is framed as benevolence. The idea of loss and damage funding was first put on the agenda by Vanuatu three decades ago. Getting it over the line has been a concerted effort of lobbying and activism. And it continues. The Australian government launched a campaign at Cop27 to co-host the annual climate conference with Pacific neighbours in 2026. When Glasgow hosted the summit in 2019, it was estimated to be a £73m boost to the city’s economy. Vanuatu’s new climate change minister, Ralph Regenvanu, said support for the bid from Pacific nations should be conditional on Australia ending new fossil fuel subsidies. As the utility of these climate talks continues to be questioned, you could argue they at least make a useful bargaining chip.