• COP 27 Reaches Historic Deal on Compensation for Developing Nations

Fuel for Thought

COP 27 Reaches Historic Deal on Compensation for Developing Nations

Nov 21 2022

Over the weekend, negotiations were very much on a knife-edge at COP27. Even up until late Sunday evening, it was unclear whether commentators and watchdogs would have much of anything to write about come Monday morning. Talks had already been extended; time was running out. But the world woke up today to an historic surprise: after more than thirty years of pleading, so-called ‘loss and damage’ compensation will be provided to those non-polluting countries which have suffered the brunt of the climate crisis so far.  

It’s important to emphasise just how unlikely such an agreement seemed even two weeks ago. In a small resort town on Egypt’s Red Sea coast, delegates from developing countries spent forty hours lobbying the organisers to put the issue on the agenda. Their plea was successful, and it marked the very first time that the topic had made it onto any COP’s official programme. But debating the issue proved difficult, deadlocking negotiations. On Thursday, the European Union proposed that a finance facility for the scheme be established, beginning lengthy negotiations throughout Friday and Saturday. Slowly, light could be seen at the end of the tunnel, as long-opposed nations like the United States began to give up the ghost. One final, five-hour-long plenary on Sunday sealed the deal. 

As with most agreements of its kind, this is only the very first step on the long road to implementation, but the outline established is promising, nevertheless. It legislates the creation of a committee, staffed by representatives from 24 countries, that will design a fund to dole out the compensation. As part of these discussions, the committee will decide which countries will benefit and which will contribute, as well as the type of regenerative projects that can be funded by the scheme. 

Despite the surprising about-face of the polluting nations on this issue, many in the international community will hold onto doubts over their real commitment to redistributive projects of this kind. This is only reasonable, given the frequent failure of developed nations to provide the USD100 billion to developing countries that had been agreed as part of the Paris Agreement of 2015. In 2020, for instance, not only were the official numbers short by USD15 billion, a clear dereliction of duty, but Oxfam have been scathingly critical of what they regard as the reports’ fraudulent accounting methodologies, such that, in their estimation, the true value of these transfers puts the shortfall at over USD40 billion.   

Notwithstanding such reservations about the future of the scheme, we must agree with Barbados’ Prime Minister Mia Mottley, widely lauded as one of the Global South’s greatest assets in the negotiations, when she stated: “We must recognise this as a historic moment when we took a big step for climate justice.” 


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