Cop27 draft agreement fails to include a fund for climate compensation

A draft version of the Cop27 agreement has been published just hours before the critical climate summit is due to draw to a close in Egypt.

The publication of the draft deal, which is still expected to change as it’s negotiated in the coming hours, is the defining moment of Cop27 so far as the world gets to see the first iteration of the vision world leaders have for tackling the climate emergency.

The text, which builds on earlier less formal versions, has many “placeholders” for the thorniest issues where the outcomes from ongoing negotiations can be slotted into the final version, and seems – in its current form – to fall short of being a significant step forward from Glasgow.

One such gap in the text is for funding arrangements to compensate vulnerable countries for the loss and damage they have suffered due to climate change.

This was the dominating issue of this two-week climate summit in Egypt, with small island states and other developing nations pushing for a new finance fund set up for this climate compensation by “no later” than 2024.

They argue that they are bearing the brunt of climate devastation despite their relatively small carbon footprints.

After two decades of calls by developing countries, the inclusion of loss and damage as an agenda item at Cop27 was hailed as a step towards addressing climate injustice.

But while developed nations, grown rich by burning fossil fuels, have admitted that more money is needed many, including the United States, have pushed back on the concept of a new fund.

So far the draft of the final text welcomes the parties’ agreement to include loss and damage as an agenda item at Cop27, and notes with concern the “growing gravity, scope and frequency” of loss and damage in all regions. It underlines that an “adequate and effective” response to loss and damage is of “great importance” to the continued credibility and relevance of the UN climate process, and includes a placeholder for a “funding arrangement”.

The text was published after the European Union added its own proposal on loss and damage on Friday, adding to the handful already being discussed. The bloc proposes setting up a fund for loss and damage in the most vulnerable countries but from a “broad donor base,” indicating hopes to expand the responsibility for a fund beyond the rich nations that have historically contributed the most to global heating.

So on loss and damage there remains a lot to figure out.

1.5C

Elsewhere in the document, the text reaffirms countries’ resolution to pursue efforts to limit global temperature rise to 1.5C above pre-industrial levels, repeating the strength of language around 1.5C seen in the Glasgow Climate Pact last year.

The document also reaffirms that limiting temperature rise to 1.5C would require “rapid, deep and sustained” cuts to greenhouse gas emissions, and “strongly urges” parties that have not yet submitted strengthened climate plans to do so.

This, however, is not new and analysts say the section of the text dedicated to reducing greenhouse gas emissions does not in its current form represent a step forward from Glasgow.

At Glasgow, for example, countries were requested to “revisit and strengthen” their 2030 climate plans in 2022. So far only a handful have done so and while the Cop27 draft encourages those who have not to come forward with new plans, it does not call on all countries to up their ambition on their 2030 targets.

“It’s not responding to calls we heard in the room for strengthened language on 1.5C and on 2030 climate targets,” said Tom Evans, a policy adviser at the climate think tank E3G, of the text.

Some countries had also hoped for language around the need for emissions to peak in 2025 – the latest date scientists say they could do so in order to keep 1.5C “alive.” But that so far has not made it into the text.

It could potentially have been worse though – and still could be as the negotiations continue – as there had been concern that some countries are attempting to backslide on their commitments made in Scotland.

A Western official told The Independent on Friday that Brazil, China and Russia were among the countries backsliding on the Glasgow commitment to “keep 1.5C alive”.

The official said the countries were pushing to stick to the Paris temperature goal of “well below 2C” rather than the more ambitious 1.5C. The Independent has contacted the countries for comment.

Fossil fuels

Missing too from the text is any mention of India’s demand to include wording on the “phase down of all fossil fuels” in the agreement.

The Cop26 agreement in Glasgow called upon parties to accelerate efforts towards the “phasedown of unabated coal power.” New Delhi has been pushing at Cop27 for this language to be broadened to include all fossil fuels, and had gained the support of multiple countries including the European Union.

India remains heavily dependent on coal, the dirtiest of fossil fuels.

Instead, in one place the draft text published on Friday appears to strengthen the language calling on countries to accelerate efforts to “phase-out” coal rather than “phasedown.”

In another part of the text, however, the language around coal is slightly different, an example of a potential internal contradiction in the text that will need to be ironed out before the final iteration is published.

Earlier in the document, it “encourages” continued efforts to “phase down” unabated coal power, which some have pointed out potentially weakens the language in the Cop26 agreement that “calls” upon parties to phase down coal.

But so far, analysts say what’s in the text in no way moves forward the Glasgow summit’s aim of consigning coal to history.

The text also adds peculiar language around the fossil fuel subsidies. In Glasgow, the final text called on countries to “phase-out” inefficient fossil fuel subsidies – making it the first United Nations text of its kind to mention fossil fuels, the major driver of the climate crisis.

In the draft published on Friday, in one place the text encourages countries to phase out and “rationalize” inefficient fossil fuel subsidies, seemingly weakening the language.

The International Energy Agency warned this week that global coal use must be slashed by 90 per cent by 2050 if the world is to limit global heating to 1.5C.

Climate finance

This was another major focus of Cop27, with leaders like Barbados Prime Minister Mia Mottley pushing for an overhaul of the way development lending works.

Ms Mottley has argued to ensure that nations vulnerable to climate change are not forced to cover the costs of rebuilding after climate destruction, while at the same time investing in a clean, renewable economy and facing higher interest rates on loans than rich nations.

So far her so-called “Bridgetown Agenda” has not made it into the draft text, but the document does include calls for Multilateral Development Banks and international finance institutions to scale up climate funding and to reform to “adequately” address the climate emergency without exacerbating debt burdens.

It also decides to establish the “Sharm el-Sheikh dialogue” to help achieve the Paris commitment to make climate finance consistent with low greenhouse gas emissions and climate-resilient development.

The text also calls for a “roadmap” for the delivery of the committed doubling of finance to help developing countries adapt to the impacts of climate change, and urges developed countries to meet the goal of delivering $100 billion a year and to address the shortfall since 2020, the year countries were first supposed to collectively come up with these funds.

Speaking before the draft text was published on Friday, the UN Secretary-General Antionio Guterres said there must be action on finance including delivering “clarity” on how the doubling of adaptation finance will be delivered through a credible roadmap and said the $100 billion in climate finance for developing countries needed to be delivered.

So far it seems this text falls short on that too.