Ministers brace for backlash after COP27 summit agrees ‘loss and damage’ fund

Ministers are bracing for a backlash today after the COP27 summit agreed a ‘loss and damage’ fund to compensate countries hammered by climate change.

The mechanism was signed off in principle at the UN gathering in Egypt in the early hours of the morning, but Tories have already lashed out at the idea of the UK paying ‘reparations’.  

Developed nations have long resisted calls for payments to account for rising sea levels and extreme weather caused by historic carbon emissions.

They have insisted that funding should focus on helping populations adapt to climate change.   

However, states that industrialised later from Asia, Africa, Latin America, the Caribbean and the South Pacific have argued that they are suffering the consequences without contributing to the problems. 

It is not clear what countries will receive funding, how much, and who will contribute – although it is thought that China will not be putting into the pot. 

Earlier this month Rishi Sunak said he was ‘pleased’ there was a ‘dialogue’ on ‘loss and damage’.

He told MPs the summit would ‘discuss arrangements for funding activities to avert, minimise and address loss and damage’.

But the PM denied that a ‘loss and damage’ fund would be the equivalent to ‘reparations’ for past carbon emissions.

Boris Johnson told a fringe event at the summit that Britain ‘simply doesn’t have the financial resources’ to pay reparations and ‘no country does’.

While admitting that the UK had contributed vast carbon emissions, he argued that the focus should be on finding private investment and technological solutions. ‘Let’s look to the future,’ he added.

Former Cabinet minister Jacob Rees-Mogg has argued that Britain’s industrialisation ‘brought prosperity to the world’.

‘There is no need to pay reparations. Our leadership of the industrial revolution brought prosperity to the world and led to increased life expectancy and better living conditions,’ he tweeted earlier this month.

Asked about the deal, Health Secretary Steve Barclay told the BBC’s Sunday with Laura Kuenssberg show: ‘We need to look at the detail. Obviously that’s just coming through now.

‘The UK, through its overseas aid budget, has always supported action in terms of climate change and I’m sure we will continue to do so.’

However, Nicola Sturgeon’s Scottish Government used the summit to announce an extra £5milllion in ‘loss and damage’ cash for climate-hit communites.

She hailed the agreement as ‘groundbreaking’ – although she said it was ‘deeply disappointing’ that this was not matched by further commitments on tackling climate change.

She insisted: ‘The breakthrough on loss and damage is what I hope Cop27 will be remembered for, and that is a vital step forward for the developing world.’

Austria also pledged ‘loss and damage’ money at the Egypt conference, with a commitment of at least 50 million euros over the next four years.

Belgium, Denmark and Germany have also pledged small amounts of funding for ‘loss and damage’.

Wrangling is now expected over who pays what – which could well mean nothing is finalised for years.

According to the agreement, the fund would initially draw on contributions from developed countries and other private and public sources such as international financial institutions.

While major emerging economies such as China would not automatically have to contribute, the option remains on the table. That was is a key demand by Western states, who argued that Beijing and other large polluters have the financial clout to pay their way.

The fund would be largely aimed at the most vulnerable nations, though there would be room for middle-income countries that are severely battered by climate disasters to get aid.

If a Republican like Ron DeSantis ends up winning the presidency, the fund could face being scrapped again. 

Donald Trump pulled the US out of the 2015 UN Paris Accord on climate change, saying it represented a bad deal for America – with Mr DeSantis known to share many of the 45th president’s views. 

 China – currently the world’s biggest polluter – is still considered a developing nation, despite its vast economy. 

Meanwhile, outgoing Cop26 president Alok Sharma has warned that hopes of limiting global warming to 1.5C is ‘on life support’, after negotiators secured a last-minute deal at Cop27 in Egypt.

In his speech at the closing plenary session of the UN climate summit, he said that while progress on loss and damage had been ‘historic’, it was not a moment for ‘unqualified celebration’.

Officials and negotiators agreed a deal in the early hours of Sunday that will create a fund for compensating poor nations that are victims of extreme weather worsened by rich countries’ carbon pollution.

It is a big win for poorer nations which have long called for cash because they are often the victims of climate worsened floods, droughts, heat waves, famines and storms despite having contributed little to the pollution that heats up the globe.

But Mr Sharma indicated that the deal did not go far enough, as he told the closing session: ‘Many of us came here to safeguard the outcomes that we secured in Glasgow, and to go further still.

‘In our attempts to do that, we have had a series of very challenging conversations over the past few days.

‘Indeed those of us who came to Egypt to keep 1.5 degrees alive, and to respect what every single one of us agreed to in Glasgow, have had to fight relentlessly to hold the line.

‘We have had to battle to build on one of the key achievements of Glasgow.’

Mr Sharma’s speech, delivered after what appeared to be fraught and last-minute efforts to broker a consensus, pointed out the gaps in the agreement.

‘We joined with many Parties to propose a number of measures that would have contributed to this. Emissions peaking before 2025, as the science tells us is necessary.

‘Not in this text.

‘Clear follow-through on the phase down of coal. Not in this text.

A clear commitment to phase out all fossil fuels. Not in this text.

‘And the energy text, weakened, in the final minutes.’

He continued: ‘Friends, I said in Glasgow that the pulse of 1.5 degrees was weak.

‘Unfortunately, it remains on life support.

‘And all of us need to look ourselves in the mirror, and consider if we have fully risen to that challenge over the past two weeks.’