Climate compensation on the agenda at COP27

For the first time, climate compensation is on the agenda at the COP27 conference in the Egyptian city of Sharm el-Sheikh. While previous COP conferences predominantly focused on developing plans for tackling climate change, COP27 will, among others, finally focus on adapting and, crucially, implementing the plans that have been developed. 

Several reports leading up to the summit were able to describe how we are not at all on our way to achieving the goals of the Paris Agreement. The agreement was signed in 2015 by 195 countries at COP21 in Paris and formally entered into force in November 2016. With the agreement, the countries of the world agreed to limit global warming to well below 2 degrees by the end of the century. Ideally, it should be limited to 1.5 degrees above the pre-industrial level, but we are already 1.1 degrees above and on our way to 2.4-2.6 degrees.

One of the most important issues at the COP27 revolves around the question of whether the rich countries among the member states provide sufficient financial resources to enable the poorer members to switch to climate-friendly energy supply, a green economy and climate-friendly agriculture. 

Future reparation payments for climate damage are also a discussion point on the agenda. This year, the more vulnerable countries are the ones seeking clarification on what should happen with the loss and damage and how it should be financed. Much of the damage and loss affects poorer countries, and so delegates have agreed to discuss whether rich countries should compensate poor countries that are most exposed to climate change. These could have to be paid for by the biggest polluters in the future. “This creates, for the first time, an institutionally stable space on the formal agenda of the COP and the Paris Agreement to discuss the pressing issue of funding arrangements needed to deal with existing gaps,” says COP27 President Sameh Shoukry.

At COP26, which was held in Glasgow last year, rich nations blocked a proposal that specifically dealt with climate compensation for poor countries. They instead supported a new three-year dialogue on the funding discussion. Prior to the meeting, the expectation was also that poor nations would raise the issue of climate compensation again, as they believe that they are to a lesser extent responsible for the climate changes that are responsible for damages and losses in their countries.

In 2009, the rich countries pledged $100 billion a year in climate finance to developing countries from 2020 to 2025. However, in 2020, only around $80 billion was allocated. Throughout the first day at COP27, leaders from wealthy countries, including French President Emmanuel Macron, underlined in their official speeches the importance of showing solidarity and helping developing countries. The discussions now on the agenda at the conference are not going to involve binding compensation. Instead, the intention is that they should lead to a final decision in 2024 at the latest, Sameh Shoukry has stated.