A possible breakthrough has emerged in deadlocked global climate talks at the Cop27 summit after the European Union made an early morning proposal aimed at resolving the loss and damage impasse.
In the early hours of Friday at the summit, European Commission vice-president Frans Timmermans unveiled a proposal on behalf of the EU that would see it agree to establishing a loss and damage fund but targeted at the most vulnerable countries.
Minister for Climate Eamon Ryan, who is leading EU negotiations on the issue, said it was a major proposal and “an opportunity to get agreement” though difficult hours of negotiation were ahead.
Rich countries had been holding out against this key demand, arguing it would take time to establish whether such a fund was needed, and how it would operate.
Mr Timmermans said on Friday morning the EU had listened to the G77 group of developing countries, for whom the establishment of a fund at this summit is a core demand – they total 134 countries while China traditionally supports their position.
Key to progress at this point will be the response of the G77 but also China and the United States.
Loss and damage refers to the ravages of extreme weather on the physical and social infrastructure of poor countries, and the finance needed for rescue and reconstruction after climate-related disasters. It also acknowledges historical and future emissions caused by rich countries who have contributed most to the climate crisis.
Mr Ryan said the proposal is for a loss and damage fund for the most vulnerable countries combined with broadening the sources of funds “that delivers real climate justice”. Tied into this was strong language on the need for mitigation, reducing emissions.
“It’s two sides of the one coin. If we cut those emissions, we reduce the need for loss and damage,” he added.
Broadening the funds included aviation, shipping and fossil-fuel industries, he confirmed – but also tying this into major reforms of the global financial system “to deliver the climate justice we need”.
Amid new high-level negotiations on Friday morning, Mr Ryan said at a briefing it was still uncertain as to what would happen.
Speaking about the EU proposal, Mr Timmermans said: “We were reluctant about a fund, it was not our idea to have a fund. My reluctance was because I know from experience it takes time before a fund can be established, and more time before it is filled, whereas we have existing instruments.
“I really believe we could move faster with existing instruments [for climate finance]. But since they [the G77] are so attached to a fund, we have agreed.”
Mr Timmermans added that “clear conditions” would be attached to any fund. It would be geared towards supporting the most vulnerable, with a broad financial donor base contributing to the fund.
The fund would not operate in isolation, but as part of a mosaic of solutions that includes reform of multilateral development banks, for example.
In parallel, the EU wants more ambition on cutting emissions, with stronger provisions on updated national plans for emissions cuts in line with the 1.5-degree target in the Paris Agreement and peaking global emissions by 2025.
“This would have to be a package deal,” Mr Timmermans said.
Meanwhile, the Egyptian presidency published in the middle of the night a draft negotiating text of a deal that delegates at the summit are hoping to agree in the coming days.
The text – which builds on earlier, less formal iterations – did not set out a proposed solution on loss and damage financial arrangements.
Instead it contained place holder text, indicating delegates were still seeking consensus on the matter.
The issue made it on to the formal summit agenda for the first time in what was seen as a breakthrough on a subject that has long divided developed and developing nations. It is seen as being critical to the success of “an African cop”.
The overarching deal text, time-stamped at 3.30am reflecting the intensity of the final negotiations, reaffirmed key points in last year’s Cop26 deal in Glasgow and the Paris 2015 agreement on limiting the rise in global temperatures.
The text said the conference: “reaffirms the Paris Agreement temperature goal of holding the increase in the global average temperature to well below 2 degrees above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5 degrees above pre-industrial levels.”
Tensions, however, are mounting as a newly released “cover decision text” fails to commit to the swift, just, and equitable phase-out of fossil fuels.
Despite calls from civil society organisations and governments worldwide including India, Tuvalu, the UK, Norway, Denmark, Spain and the EU, the Egyptian presidency chairing negotiations continues to ignore calls for phase-out to be included in the text, according to the campaign group 350.org.
People across the world are depending on governments to commit to phasing out oil, gas, and coal to uphold the Paris Agreement 1.5-degree target and meet the demands of science, said its spokeswoman, Zeina Khalil Hajj.
“This conference cannot be considered an implementation conference because there is no implementation without phasing out all fossil fuels,” she added.
“The Egyptian presidency is failing Africa, it’s failing frontline communities, it’s failing civil society, it’s failing its own promise to implement and it is failing the recommendations of the science community.”
