Governments from more than 190 countries at the COP27 climate conference struck a deal Saturday to set up a fund that would pay for climate-related damage in vulnerable countries, according to a European source.
The source explained that an agreement was reached “on the creation of a special fund dedicated to losses and damage, which directs funds to the most vulnerable countries to climate change.
The agreement includes the amount of financing required, and the annual increase rate, sources told Daily News Egypt.
Early on Saturday, Frans Timmermans, Vice-President of the European Commission, has launched a proposal on behalf of the European Union (EU) on the approval of the establishment of a fund for losses and damages, which is the main requirement of the main developing countries on financial assistance to poor countries, known as the fund for losses and damages, although rich countries have refused this request, arguing that it takes more time to determine the need for such a fund, and its mechanism of action.
Timmermans stressed that the EU listened to 77 developing countries on the need to establish a fund as a basic requirement for them, as losses and damage refer to the damage caused by climate on the physical and social infrastructure of poor countries, as well as the necessary financing for rescue and reconstruction after climate-related disasters.
The draft of the proposal includes an agreement to “establish a fund to respond to losses and damages”. The draft needs the approval of the countries participating in COP27 in Egypt, numbering about 200 countries.
The call for developing countries to create a climate damage Fund has dominated UN negotiations over the past two weeks, pushing the summit to continue beyond its original deadline, which was scheduled for Friday, with countries facing difficulty in reaching an agreement.
According to the proposal, most of the controversial decisions on the fund will be postponed to next year, after which a “transition committee” will make recommendations to countries for adoption at the COP28 in November 2023.
These recommendations will include “identifying and expanding funding sources,” referring to the vexing question of which countries should finance the new fund.
After years of resistance by rich countries to calls from countries vulnerable to climate change demanding compensation for losses and damage, the EU said it would support the creation of a fund if it was co-financed by emerging emission-intensive economies such as China, instead of only countries historically responsible for causing a large amount of emissions, such as the EU.