Climate Change

COP27: Here is what to expect on the extended day of talks at Sharm El-Sheikh

Loss and damage remains the elephant in the negotiating room

 
By Jayanta Basu
Published: Saturday 19 November 2022
Photo: UNFCCC

The 27th Conference of Parties (COP27) to the United Nations Framework Convention on Climate Change (UNFCCC) formally concluded November 18, 2022. But talks have been extended to November 19, as developed and developing countries negotiate hard to find a solution on the climate crisis.

Differences over setting up a loss and damage finance facility remain the key impediment to a unanimous COP27 decision.

“There are other outstanding issues. But it seems that once the political decision over the loss and damage facility is cleared, everything else will follow. Clearly, loss and damage remains the elephant in the negotiating room,” a climate expert in Sharm El-Sheikh, who has been following the issue over two decades, told this reporter November 18.

India, so far, has chosen to remain silent over the impasse. It has offered support to developing countries’ position to set up the facility in Sharm El-Sheikh but not committed to anything else.

Experts feel that India wants to tread carefully on the issue. This is because since several countries, especially from the European Union (EU), have demanded that emerging economies and emitters like China and India should pay for loss and damage. 

As the countries negotiate, a text prepared by ministers engaged in the loss and damage section came up earlier November 18.

It flagged off three options. The first called for a decision to establish the fund at COP27 itself considering public and other sources of funding.

The second option gave the time frame of 2023 for fund establishment. The third did not establish a fund but proposed other sources of funding including outside of the UNFCCC.

Riders for developing economies

The third option, set in motion by the EU, is so far receiving momentum as developing countries point out that the COP will be a failure without the facility being set up here.

But it comes with riders for countries like India and China. This is because it talks about phasing out all fossil fuels; aligning national policies to limit temperature rise within 1.5 degrees Celsius of global mitigation goals; turning around emission curves quickly and the demand for countries like China and India to also pay for loss and damage.

“The proposal is an effort to divide developing countries’ unity on the issue and isolate China and India,” an expert said.

“We want the facility to be created at Sharm El-Sheikh with modalities worked out in the coming one or two years. If that is not done, this COP will not be successful,” Nabeel Munir, Pakistan’s ambassador and key negotiator told this reporter.

An EU negotiator said “the world has changed since 1992 and present major economies and emitters should also pay for loss and damage,” shifting the onus mainly on China and India.

The G77 and China group had released a draft text November 15 regarding loss and demand finance. It had asked “to establish a fund for assisting developing countries in meeting their costs of addressing non-economic and economic loss and damage associated with the adverse effects of climate change” and had set the ball rolling.

The statement was issued as a counter to a text circulated by the COP Presidency a day before, where it was mentioned that “funding arrangement … to be operationalised no later than by COP29 (November 2024) … (or) on the basis of negotiations … between 2023 and 2024”.

The draft negotiating the overall cover text released at 9 am November 18 is also hardly an improvement.

It recognised “the growing urgency to address loss and damage”; expressed “deep concern towards the significant financial costs associated with loss and damage for developing countries” but remained silent on setting the facility at Sharm El-Sheikh.

“The stand of developed countries is absolutely unacceptable and if they do not agree to the creation of a facility here, that may prove to be a make-or-break agenda,” Harjeet Singh, head of global political strategy of Climate Action Network (CAN) International, said.

“In the past year, the EU has moved significantly and is now supporting a loss and damage fund at COP27, including a new proposal to finance it by taxing polluters and fossil fuels. To gain support, at this final stage of the negotiations, the EU needs to strengthen the inclusion of equity and recognise the historical responsibility of big emitters, bringing new and additional funds,” Chiara Martinelli, director at CAN Europe, said.

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