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Scotland’s First Minister has announced a £5 million funding pot to tackle loss and damage caused by climate change in developing countries.

Speaking ahead of a panel discussion at Cop27 in Egypt, Nicola Sturgeon announced a boost in funding from Scotland, following on from the £2 million pledged during last year’s summit in Glasgow.

Following a conference on loss and damage hosted in Scotland this year, the Scottish Government has said it will offer the cash as grants as opposed to loans, so as not to compound financial hardships already seen in the countries impacted by climate change.

The First Minister announced the increase in funding on her second day at the Sharm El-Sheikh summit, with the money due to come from the Scottish Government’s climate justice fund.

The funding Scotland has announced today is a small sum in terms of the overall scale of the loss and damage that developing countries face, but I hope that it sends an important message

Nicola Sturgeon, First Minister

“In virtually everything we do on loss and damage, Scotland is trying to ensure that we listen to international perspectives, especially the perspectives of the global south,” the First Minister said.

“After all, for more than 30 years now – since the views of island states were first ignored – decisions at Cop have been dominated by the voices of the global north.

“With loss and damage now on the formal agenda for the first time, this Cop can mark a turning point in ensuring the views, experiences and perspectives of the global south assume a far more central role.

“If that does happen, it will lead to greater progress on loss and damage and will also, I hope, lead to quicker action on other aspects of climate change.

“I encourage all parties to make space for serious, open and honest discussion over the next two weeks.

“The funding Scotland has announced today is a small sum in terms of the overall scale of the loss and damage that developing countries face, but I hope that it sends an important message.”

The First Minister added that countries don’t have to wait for a decision to be taken at Cop27 on loss and damage funding.

“I very much hope that we will make collective progress on loss and damage at this Cop,” she continued.

“If that doesn’t happen, I expect that more and more governments will take action on their own – my belief is that as we do, it will create a momentum for change which will feed into future Cop summits.”

Meanwhile, Kenyan environmental activist Elizabeth Wathuti said countries acknowledging the problems caused by climate change was a “step in the right direction”, but added that a “real political commitment and collective effort from developed countries through a loss and damage finance facility is crucial”.

“We need permanent, reliable and sufficient funding,” Ms Wathuti said.

Jamie Livingstone, head of Oxfam Scotland, said: “More money from the Scottish Government to address loss and damage is very welcome.

“However, like all rich nations, the Scottish Government should ensure this money is fully new and additional, and avoid in any way squeezing the support it provides to its partner countries to help them adapt to the climate crisis.

“To achieve this, while also increasing investment to urgently cut Scotland’s climate-damaging emissions, the Scottish Government should identify new sources of finance which make polluters pay for their damage.”

Lang Banks, director of WWF Scotland, said: “It’s great to see the Scottish Government continue its support for climate justice, recognising the fact that most of those impacted hardest by climate change did least to cause the problem.

“We particularly welcome the move by the Scottish Government to build upon its announcement at Cop26, in Glasgow last year, of funding for action on loss and damage.”

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