At COP27, Countries Hit Hardest by Climate Change May Finally Get Their Due

Speakers have frequently invoked the phrase “climate reparation” to describe the responsibility to compensate future generations based on past harms. That reflects a tradition as old as World War I, when certain nations were held responsible for paying for the clean-up, explains Lisa Vanhala, a political scientist at University College London who studies loss and damage negotiations. But wealthy polluters like the US have remained fearful that it could be leveraged to hold them accountable in venues outside the United Nations, despite agreements at past COPs to avoid liability claims. Those countries want to keep the conversation looking forward, away from a litany of past harms, preferring to use the more anodyne and open-ended phrase “loss and damage” at the negotiating table. Worried about alienating the rich nations, countries advocating for finance have largely agreed to speak in those terms—at least in the negotiating room. The UN requires consensus to move forward.

The question remains what the phrase “loss and damage” actually means. One idea, led by Germany ahead of COP, is a sort of insurance program that would pay out when a climate-linked disaster strikes. The program, which the EU calls Global Shield, would likely involve help from wealthier nations to cover the premiums and would supplement ongoing disaster relief efforts. At COP, a number of nations, including Belgium and Ireland, have committed funding to the program.

But other nations want a fund for loss and damage within the UN. Among the fiercest advocates are some of the small island nations that pioneered the idea of loss and damage, who say any insurance plans cannot come at the expense of a grant-based program for affected nations. “As climate impacts become worse, some places will become uninsurable,” says Michai Robertson, who leads finance negotiations for AOSIS, a group of small island states. Plus, he adds, insurance is good at covering sudden disasters but not slow-onset changes like desertification and sea level rise. The group’s member states have plenty of ideas for how to finance a UN loss and damage fund, including grants from polluters or other measures like taxing oil company profits.

By late Tuesday in Egypt, as world leaders departed, leaving negotiators with their marching orders, some appeared slightly more optimistic about the creation of a fund. “Suffice to say that momentum is gathering,” said Mottley of Barbados at a press conference Tuesday. There are challenges ahead, including indications that the United Kingdom may be unwilling to provide funding and uncertainty over the US position as it emerges from midterm elections. Also uncertain is the role of countries, like China and India, that are major polluters now but haven’t contributed as much to the problem in the past. On the sidelines of the talks, Gaston Browne, prime minister of Antigua and Barbuda, emphasized that everyone must step up. “The polluter must pay. I don’t think there’s a free pass for any country,” he said.

In the meantime, more action is taking place outside the UN process. At COP27, New Zealand and other polluters have set up their own loss and damage funds, joining a movement spearheaded last year by Scotland, a non-UN member, which has pledged a total of $7 million to loss and damage. That’s “very, very small” in the context of potentially trillions in losses and damages, First Minister Nicola Sturgeon acknowledged at an event. Covering the immense costs, she said, could not be tackled only through a “coalition of the willing” that decide to take action on their own, highlighting the importance of finding consensus in the COP negotiations.

She turned to Huq, her copanelist, thanking him for his years of work on making that happen. He replied that he is often asked why he keeps attending COP every year, despite its consistent shortcomings. His answer is relentless optimism. This year, at least, they’ll be talking money, and that’s a start. “We’ve been playing this game for years, and we’ve been losing,” he said later, “but this time we got it.”