The past week has given the world a glimpse of what climate-vulnerable countries have long known: while rich countries bend over backwards to pledge their support for climate action, they are far less enthusiastic when it comes to forking over the cash.
At the UN’s COP27 climate summit, the United States, the European Union and the United Kingdom are united against establishing a new fund this year to help the world’s developing nations – which have contributed little to the climate crisis – recover from climate disasters.
Developing a so-called loss and damage fund is a key issue at COP27, and “the litmus test for success” of the summit, said Erin Roberts, a climate policy researcher and founder of the Loss and Damage Collaboration.
As it stands, developing countries – which have for years pleaded for loss and damage funds – are facing disappointment.
With only three days of negotiations left, a sense of frustration is spreading through the Red Sea resort town of Sharm el-Sheikh where the conference is taking place. Activists are staging daily and increasingly angry protests outside the negotiation rooms. On Saturday, in what was the biggest protest of the summit so far, hundreds marched through the sprawling conference venue, demanding rich countries to get their act together and “pay up.”
But that message is not breaking through in high-level negotiations.
An EU source directly involved in the negotiations at the summit told CNN on Tuesday that the bloc doesn’t believe there should be a binding agreement on a new loss and damage fund before the details of how it would work are agreed on.
The source added that the EU believes the COP27 agreement could include an agreement that work needs to be done on the issue and a solution should be found by 2024.
Similarly, the UK government submitted a document to the conference saying it wants to establish a “process” that would lead to a concrete solution in 2024 at the latest.
US senior administration officials have only committed to having a conversation about loss and damage but have not gone further to explain what kind of fund they would ultimately support. They, too, see 2024 as the deadline for an agreement on loss and damage, but do not support the proposals put forward so far, concerned it could open up developed nations to legal liability in the coming years.
Pressed on what kind of loss and damage fund the US would be open to, officials have repeatedly declined to say. And they want to take the next two years to hammer those questions out, rather than come to an agreement this year.
A spokesperson for US climate envoy John Kerry did not respond to a request for comment.
The push for delay by some of the world’s richest countries means those that are worst impacted by climate change are already bracing for disappointment.
“I don’t want to leave COP27 empty handed,” Shauna Aminath, the Maldives’ minister of environment said an event at the conference on Tuesday. “Agreeing to work on something that will be established in 2024 is leaving empty handed.”
A contentious issue comes to a head
It was seen as a huge success that loss and damage made it onto the formal agenda for COP27, and developing nations are holding wealthy countries’ feet to the fire and pushing for a binding commitment this year.
Negotiations on the issue have been packed, summit-goers have told CNN, and have dragged late into the evenings this week.
But developed countries are slow-walking the issue – many want to take the next two years to explore possible solutions, with a proposal to make a decision by 2024, which doesn’t guarantee an official funding arrangement.
Amid a tough economy, US and EU leaders worry they won’t be able to get this funding passed through legislatures at home, where they’re already facing an uphill battle to marshal more money to fulfill climate finance commitments.
But Aminath said she doesn’t believe the reluctance to address loss and damage comes down to lack of finance.
“We saw that trillions were mobilized to address the global health emergency” during the pandemic, she said, and “we are seeing trillions being spent to help Ukraine.”
Representatives from vulnerable countries also told CNN they’re frustrated by wealthy nations’ calls for more analysis and mapping, which would cost money that could otherwise go to addressing loss and damage.
“They wanted to show their electorates that they are doing something when in fact they’re not,” Michai Robertson, loss and damage finance lead with the Alliance of Small Island States, told CNN. “They’re putting money into, for example, research departments, as opposed to actually putting funding for specific responses to all the loss and damage that we face.”
Despite the grim outlook so far, Robertson said developing countries remain united and determined, noting that the last thing they want is to be stuck in another cycle of climate disasters, more debt and devastation, with no action from developed countries.
“We don’t want just an opportunity to survive; we want opportunity to thrive,” he said.
Solutions in the meantime
A hopeful moment for loss and damage came earlier this week when Germany announced a Global Shield initiative designed to help vulnerable countries deal with the loss and damage caused by the climate crisis.
Flood-ravaged countries like Pakistan, Bangladesh and the Philippines will be among the countries to benefit from it when the program starts paying out funding early next year.
While the funds committed to the initiative were comparatively large, they still pale in comparison to the devastation these countries have endured.
For instance, the World Bank estimated last month that Pakistan would need “at least $16.3 billion” for reconstruction after this summer’s deadly floods. As of Monday, Global Shield had received total commitments of roughly $216 million.
The program has also been criticized because of its underlying focus on insurance and preventing future loss and damage, rather than direct funding to address the disasters that have already – and recently – occurred.
German Federal Development Minister Svenja Schulze stressed the initiative was in addition to — not a replacement of — an official UN loss and damage fund.
“That was a good start, but it is also just a start,” Schulze said at a Monday news conference, stressing that loss and damage was “a highly contentious issue.”
“I am glad that we, the international community have finally come to say yes, there is climate-related loss and damage,” Schulze said.
Julie-Anne Richards, an independent consultant and expert with the Loss and Damage Collaboration, said the Global Shield design is problematic.
“They’re facing all these climate risks because rich countries like Australia and the US caused the climate problem, yet now they’re outsourcing dealing with it to vulnerable people, saying ‘it’s your responsibility to take out insurance,’” Richards told CNN.
Richards said she worries that countries are spending more time, effort and money creating a system that might not be able to scale to the problem the planet is facing. Vulnerable countries are already watching their islands sink into the ocean, food and water supply dwindle rapidly from drought and homes inundated with floods.
“The loss and damage finance facility needs to be set up in such a way that it provides grants, it doesn’t lead to more debt, and doesn’t shift responsibility onto vulnerable countries,” Richards said. “So we need new money because of the scale of the problem. The climate impacts that we’re facing are significant, and it needs significant finance.”