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COP27 becomes historic over the adoption of loss and damage fund

Climate change is finally getting funding from the rich nations (Photo: IANS)

The agreement over the setting up of a loss and damage fund has been the bright spot for COP27 at Sharm-el-Sheikh. All these decades, negotiations over climate finance and transfer of technology have resulted in deep divisions between the close-fisted developed and the gutsy developing countries.

What exactly is loss and damage?
It is the cost that the developing nations seek from the developed countries for causing emissions and polluting the planet for which the developing nations are suffering by extreme weather events like flash floods, unseasonal rains and droughts.

The inclusion of the loss and damage fund will provide an estimated $100 billion more in the fight against climate change. It sets up a financial support structure for nations most vulnerable to diastrous effects of climate change.

For COP27, the setting up of the loss and damage fund was one of the main demands set by the developing nations at the Sharm el-Sheikh climate change summit. Developing nations wanted a new financing facility to be established to compensate for the impact of droughts and floods that threaten them currently. The drought in Egypt and floods in Nigeria and Pakistan paved the way for nations to reach a consensus on loss and damage.

The loss and damage idea comes from the “polluter pays” principle under which the polluter pays compensation for the environmental damaged caused and the payment for rectifying the problem.

Funding pledged

Some of the big donors promising to start the loss and damage funding include the UK with Pound 11.6 billion, Germany with Euro 170 million, the EU with Euro 60 million for Africa and Austria with Euro 50 million.

Many other nations have pledged smaller amounts that these. Switzerland too promises to contribute Swiss Francs 155.4 million spread over four years with parliamentary approval.

Historical liability
The global climate change negotiations have put up year 1850 as the baseline year for calculating the emissions of greenhouse gases as that year has been acknowledged as the start of the industrial revolution.

The US, the UK and Britain are believed to have emitted over 50 per cent of the emissions during this time. With carbon dioxide remaining in the atmosphere for hundreds of years, the current environmental problems that we see today have largely been caused by these historical emissions.

Looking at India’s example, we notice that it has contributed just three per cent of the historical emissions while China has contributed about 11 per cent emissions till now. But looking at their current emissions, India stands at number three after China and the US so they stand out like sore thumbs. So, historically their emissions have not caused as much damage as those done by the developed world which is facing the consequences right now.

Though the COP27 has ended on a high note because of the consensus around the loss and damage fund and big ticket pledges, a sore note is that the summit did not adequately address the causes of global warming–reducing fossil fuels on a larger scale. However, by setting up the loss and damage fund it will become clear at the COP28 summit as to how much money and to what purpose is this being used to combat climate change issues.

Also Read: Climate change could force migration of 216 million people: World Bank