Nepal has been in forefront to press for a loss and damage financial facility along with other LDCs and Developing countries. Head of Nepali delegation and secretary of Ministry of Forest and Environment Dr. Pem Kandel also raised this issue during his address.

He also stressed the need for COP27 to deliver a loss and damage financial facility. Developing nations have been demanding that developed world compensate for losses suffered due to climate change. Negotiations will include those that occur during Glasgow Dialogues.

The UN’s climate change summit opened Sunday with the inclusion of funding for losses and damages in the official agenda for climate talks, marking the culmination of a decades’ long effort by developing countries.

The opening plenary of COP27 began hours later than the scheduled time at Egypt’s coastal city Sharm el-Sheikh, with member countries debating the inclusion of the agenda item late into the night.

Losses and damages refers to the wreckage vulnerable countries must deal with when they can no longer adapt to the effects of climate change.

Developing countries have long demanded that their developed counterparts set up a finance facility to fund the losses and damages arising from climate change, for which they are least responsible.

For decades, the developed world blocked any proposals related to loss and damage funding. The inclusion of the agenda item in the COP27 marks the first ever time that it will be discussed formally in climate negotiations.

Its adoption, however, comes with certain caveats.

“The outcomes of this agenda item are based on cooperation and facilitation, and do not involve liability or compensation,” COP27 president and Egyptian Foreign Minister Sameh Shoukry said in the opening plenary, “It will launch a process with a view to adopting a conclusive decision no later than 2024.”

Negotiations on loss and damage during the COP27 will also include those that occur during the Glasgow Dialogues on Loss and Damage, a platform set by the COP26 to deliberate funding arrangements for losses and damages.

Also Read: Need concrete action on climate adaptation at COP27, says lead negotiator for African countries

Cautious optimism

Civil society groups and experts said the inclusion of loss and damage funding in the agenda gives developing countries more elbow room to have their demands heard.

The issue is likely to remain hotly contested, however, with the clauses of compensation and liability off the table.

“It is outrageous that developed countries continue to desist paying compensation for the losses and damages that poor and vulnerable countries have to bear,” said Harjeet Singh, head of global political strategy at the Climate Action Network, a civil society organization focussed on climate action.

“The inclusion of the agenda item should focus on building a mechanism that will actually help people on the ground. It’s a renewed fight for developing countries to push for a finance facility, which must materialise here,” Singh added.

World Resources Institute President and CEO Ani Dasgupta said it was “encouraging” that countries could reach a conclusive decision on funding arrangements within two years.

“Of course, getting funding to address loss and damage on the agenda is only the first step. We still have a marathon ahead of us before countries iron out a formal decision on this central issue for CO27. It is critical that all countries work together in good faith to get this done,” he said in a statement.

Tough negotiations ahead

Between 7 and 8 November, the COP27 will feature the Sharm El-Sheikh Climate Implementation Summit, in which heads of states and governments will deliver speeches and participate in round table discussions on implementing climate action.

While Prime Minister Narendra Modi is not attending the summit, Environment Minister Bhupender Yadav will be present for the high-level segment.

Apart from loss and damage, the negotiations will involve key discussions on climate finance and augmenting mitigation efforts, among others.

“The litmus test of this and every future COP is how far deliberations are accompanied by action. Everybody, every single day, everywhere in the world, needs to do everything they possibly can to avert the climate crisis,” UN Climate Change Executive Secretary Simon Stiell said at the opening plenary.

“COP27 sets out a new direction for a new era of implementation: where outcomes from the formal and informal process truly begin to come together to drive greater climate progress — and accountability for that progress,” he asserted.

The stakes for Loss and Damage have never been so high at a COP. Even before it started, negotiators spent hours into the night to agree on the agenda. For the first time loss and damage finance became a formal item on its own right due to huge, concerted effort from vulnerable countries with a strong support from civil society.

But this was not a reason to celebrate, especially as it calls for a decision to be made no later than 2024. It was the beginning of the work, not its end. Action on loss and damage is urgent and long overdue. Loss and damage is the litmus test of COP27.

ACT Alliance, together with the faith community and other allies have been working hard calling world leaders in Sharm El Sheik to ensure that a decision by the end of this COP is reached to establish a financial mechanism for loss and damage. It doesn’t matter what it is called – whether a facility or a fund – as long as it serves the purpose of ensuring that funding is provided and availed to communities suffering climate induced loss and damage.

We stand behind the calls from developing countries who have been united under the G77 and China who since COP26 in Glasgow have been calling for the establishment of a loss and damage finance facility under the UNFCCC.

Loss and Damage is at the heart of climate justice. A funding mechanism is essential to mobilize L&D finance, in line with a climate justice-oriented approach. Loss and damage funding must be new and additional to existing commitments, needs based, predictable and adequate, responding to the needs of the most vulnerable who are the most affected by L&D.

It will take real courage and leadership from the negotiating parties – and specifically the developed countries. As the ministers engage on this issue, the European Union, United States, United Kingdom, Australia, New Zealand and their developed counterparts must listen to the urgent demands from vulnerable countries.

Loss and Damage is the litmus text for COP 27, world leaders must deliver on it