# At COP27, climate ‘loss and damage’ funding makes it on the table
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-11-07
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Climate negotiators agree to start discussions on funding
Meta Description: Discover the latest updates from COP27 as nations discuss funding mechanisms to aid climate-hit countries cope with escalating losses and damages.
URL: https://financedigest.com/at-cop27-climate-loss-and-damage-funding-makes-it-on-the-tablehtml

![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-11-07t100608z1lynxmpeia60aprtroptp4us-climate-un-funding-1736814903390-compressed.jpg)

By Laurie Goering

SHARM EL-SHEIKH, Egypt (Thomson Reuters Foundation) – Warned that mounting economic crises should not delay action on increasingly obvious global warming threats, climate negotiators agreed at U.N. talks on Sunday to start discussions on a [funding plan](https://www.financedigest.com/uk-drops-plan-to-tax-sovereign-wealth-funds.html "UK drops plan to tax sovereign wealth funds") to help climate-hit countries cope with surging losses.

As the COP27 [climate summit opened](https://www.financedigest.com/one-minute-to-midnight-says-johnson-as-climate-conference-opens.html "“One minute to midnight” says Johnson as climate conference opens") in Egypt, U.N. [climate chief Simon Stiell said concrete action to tackle emissions and climate risks](https://www.financedigest.com/institutional-investors-back-shell-board-lawsuit-over-climate-risk.html "Institutional investors back Shell board lawsuit over climate risk"), delayed over decades, could no longer wait as dangerous effects worsen.

There is no one single crisis as critical, as impactful, as [climate change,”](https://www.financedigest.com/exclusive-world-bank-seeks-more-funds-to-address-climate-change-other-crises-document.html "Exclusive-World Bank seeks more funds to address climate change, other crises -document") he said.

Wars will end, inflation, the [cost of living](https://www.financedigest.com/five-cost-of-living-trends-expected-in-2023.html "Five cost of living trends expected in 2023"), energy crises, these will come to an end. But what we are seeing… all around the world (is that) [climate change](https://www.financedigest.com/deloitte-research-reveals-inaction-on-climate-change-could-cost-the-worlds-economy-us178-trillion-by-2070.html "Deloitte research reveals inaction on climate change could cost the world’s economy US8 trillion by 2070") is ever present and will get worse.”

The agreement to put [funding to address “loss](https://www.financedigest.com/galois-capital-flagship-fund-to-close-after-ftx-losses.html "Galois Capital flagship fund to close after FTX losses") and damage” on the negotiating agenda came amid sustained pressure from small island states and other vulnerable nations, including Pakistan, hit by summer floods that covered a third of the country.

Richer governments, whose large historic emissions have been the main driver of climate impacts, are expected to offer finance to back a “Global Shield” at COP27 that would boost [insurance coverage](https://www.financedigest.com/types-of-insurance-coverage.html "Types of insurance coverage") and early warning systems for poor countries.

Some rich nations – including the United States, [European Union countries and Australia – have so far resisted the creation of a loss and damage fund](https://www.financedigest.com/explainer-why-european-money-market-funds-inflows-are-lagging-behind-the-u-s-torrent.html "Explainer-Why European money market funds inflows are lagging behind the U.S. torrent?"), fearing they could face trillions of dollars in liability for damages.

But between liability payments and simple government contributions to boost insurance and early warning systems lies fertile ground for other potential sources of loss and damage funding, said Harjeet Singh, [head of global](https://www.financedigest.com/new-york-catches-up-with-london-to-head-citys-global-centres-survey.html "New York catches up with London to head City’s global centres survey") political strategy for Climate Action Network, an international coalition of green groups.

U.N. Secretary-General António Guterres, for instance, has called for nations around the world to impose a tax on the windfall profits of fossil-fuel energy firms, which have reported [record quarterly profits as Russia’s invasion of Ukraine has spurred soaring oil and gas prices](https://www.financedigest.com/tesla-posts-record-quarterly-deliveries-after-price-cuts-up-4-from-q4.html "Tesla posts record quarterly deliveries after price cuts, up 4% from Q4").

The money raised could go both to pay for climate loss and damage and to help people [struggling with rising food and energy](https://www.financedigest.com/french-energy-suppliers-will-let-struggling-bakers-renegotiate-contracts-le-maire.html "French energy suppliers will let struggling bakers renegotiate contracts – Le Maire") prices, Guterres said, insisting “polluters must pay” for the damage they cause.

Singh said that “taxes are the operating space” for finding politically acceptable loss and damage [finance – but putting levies on fossil fuel profits](https://www.financedigest.com/bootmaker-dr-martens-warns-on-profit-as-finance-chief-walks.html "Bootmaker Dr Martens warns on profit as finance chief walks") would be difficult because “the nexus between companies and politicians is so strong.

Other types of taxes – such as on financial transactions or airlines – might also [offer](https://www.financedigest.com/any-business-can-now-offer-their-customers-financial-services-how-embedded-finance-is-reinventing-the-wheel-when-it-comes-to-banking.html "Any business can now offer their customers financial services: How embedded finance is reinventing the wheel when it comes to banking") opportunities, said Singh, who has followed loss and damage discussions for more than a decade.

What is clear, he said, is that whatever mechanism is set up to help poorer [countries recover from losses needs](https://www.financedigest.com/5-countries-you-need-to-have-an-offshore-account-in.html "5 Countries You Need To Have An Offshore Account In") to be based on legal obligation rather than voluntary charity, with surging humanitarian needs already unmet as climate-fuelled crises expand around the world.

CONCRETE [ACTION’ NEEDED](https://www.financedigest.com/new-uk-pm-will-need-to-take-urgent-action-on-energy-bills-ofgem-ceo.html "New UK PM will need to take urgent action on energy bills – Ofgem CEO")

After tough discussions ahead of COP27, government negotiators agreed at the opening session to [launch talks on funding](https://www.financedigest.com/collegiate-ac-and-shuman-capital-launch-e300-million-european-student-living-fund.html "Collegiate AC and Shuman Capital launch €300 million European Student Living Fund") arrangements to tackle loss and damage “with a view to adopting a conclusive decision no later than 2024.

Conrod Hunte, deputy chair of the Alliance of Small Island States (AOSIS), told negotiators that his members “do not want to be treated as though you are doing us a favour”.

Instead, he called for a “Loss and Damage Response Fund” to be [set up at COP27](https://www.financedigest.com/negotiating-our-future-youth-set-to-grab-power-roles-at-cop27.html "‘Negotiating our future’: Youth set to grab power roles at COP27") that would be put into operation by 2024.

We are here so that we can go [back to our own homes](https://www.financedigest.com/thatched-is-back-new-show-home-launching-in-ettington.html "Thatched is back: New show home launching in Ettington"), and not become climate-displaced people in yours,” he said.

On Monday and Tuesday, about 110 leaders are expected to gather at COP27 for a two-day leaders’ summit, which COP27 organisers hope will help drive new ambition to cut emissions and boost finance for [green energy](https://www.financedigest.com/britains-tax-take-risks-blowing-green-energy-off-target.html "Britain’s tax take risks blowing green energy off target") and climate resilience.

But key leaders of some of the biggest emitters – including [China and India](https://www.financedigest.com/apple-plans-to-cut-iphone-14-production-lag-between-china-india-bloomberg.html "Apple plans to cut iPhone 14 production lag between China, India – Bloomberg") – will be missing, organisers said. U.S. President Joe [Biden will attend](https://www.financedigest.com/biden-tells-britains-king-charles-the-first-lady-will-attend-coronation.html "Biden tells Britain’s King Charles the first lady will attend coronation") at the end of the first week, after U.S. mid-term elections on Tuesday.

Stiell, of the Caribbean island nation of Grenada, emphasised that with the G20 group of major nations responsible for 80% of global [emissions](https://www.financedigest.com/global-energy-related-co2-emissions-edged-up-to-record-high-in-2022-iea.html "Global energy-related CO2 emissions edged up to record high in 2022 – IEA") and 85% of global GDP, it was evident who needed to step up at COP27 and take the lead on climate action.

The wealth, the tech, the [means to address what needs](https://www.financedigest.com/does-the-monzo-effect-mean-banks-will-need-to-rethink-brand-building.html "Does the ‘Monzo effect’ mean banks will need to rethink brand building?") to be done resides there,” he noted.

Alok Sharma, the [British president](https://www.financedigest.com/british-minister-to-meet-taiwan-president-drawing-chinas-anger.html "British minister to meet Taiwan president, drawing China’s anger") of last year’s COP26 in Glasgow, also insisted that this year’s negotiations “must be about concrete action” rather than delays and promises.

With climate losses and threats [growing globally](https://www.financedigest.com/global-tool-holders-market-is-anticipated-to-reach-over-us-1604-5-mn-by-the-end-of-the-projected-period-growing-at-a-cagr-of-5-1-fmi.html "Global Tool Holders Market is anticipated to reach over US$ 1,604.5 Mn by the end of the projected period, growing at a CAGR of 5.1%: FMI"), “how many more wake-up calls does the world actually need?” he asked during the opening plenary.

Originally published on:

(Reporting by Laurie Goering @lauriegoering; editing by Megan Rowling. The Thomson [Reuters](https://www.financedigest.com/thomson-reuters-keeps-outlook-but-wary-of-slowing-economy.html "Thomson Reuters keeps outlook, but wary of slowing economy") Foundation is the charitable arm of Thomson Reuters. Visit https://www.context.news/)


---
This blog is powered by Superblog. Visit https://superblog.ai to know more.
---