COP27 meeting in Egypt: Rich nations discuss plan to compensate developing countries for climate damages

LAHORE: As participants of the United Nations-led Climate Summit (COP27) in Sharm-El-Sheikh (Egypt) have reportedly discussed a proposal for richer nations to pay the developing ones for some of the damage caused by acute weather conditions, the Minister for Climate Change, Sherry Rehman, thinks that Islamabad requires $348 billion to undertake an effective de-carbonisation plan until 2030 from climate shocks experienced on annual basis.

According to the Wall Street Journal, many developing countries have pointed to the scale of this year’s monsoon rains and floods in Pakistan, which have left the country reeling with losses and rehabilitation costs to the tune of $30 billion, an amount assessed by the government and World Bank. The newspaper asserts that less than half of Pakistan’s $816 million international emergency appeal has already been funded.

It is imperative to note that the wealthy countries have come under increasing pressure after a series of weather-related disasters in recent times, making the United Nations ponder about finding ways to avert, minimise, and address the loss and damage to the infrastructure of the countries adversely affected in this context.

The plan reportedly suggests the money could flow through a variety of channels, including a new funding facility to help countries deal with floods, storms, drought and other natural disasters believed to be made worse by climate change.

The WSJ writes: “If the

plan survives until the final agreement this week, it could be the most significant development of this year’s COP27 meeting in Egypt. Demands by poor countries for money to address climate change have been the main source of tension at recent climate summits. They argue that wealthy nations are responsible for most of the carbon dioxide in the atmosphere, yet developing countries bear the brunt of climate change.”

The Wall Street Journal maintains: “The money under discussion at the Egypt summit would be earmarked for what negotiators call loss and damage, when negative effects linked to climate change are sudden or potentially irreparable. Wealthy countries have balked at being on the hook for loss and damage, such as the recent floods in Pakistan, heatwaves in Asia this year or the dangers posed by rising seas to islands. They argue that it is hard to determine the role that climate change has played in specific weather events.”

The WSJ states: “While wealthy countries have agreed to provide money for loss and damage, they disagree with developing ones on the details. Rich countries are sceptical that a new fund is necessary and say existing facilities could be used. That issue is unlikely to be resolved at this meeting, negotiators say. The countries aim to agree on the details of the funding plan over the next two years, according to the draft. Developing countries want the funds to come on top of money they receive from wealthy nations to cut greenhouse-gas emissions and adapt to the repercussions of climate change. Wealthy countries have increased those funds to developing countries, hitting $83 billion in 2020, according to the Organisation for Economic Cooperation and Development. But that sum falls short of the $100 billion target for that year.”

The ideas for financing being discussed at COP27 include a tax on fossil-fuel companies, as at least 39 nations think they are in danger of being submerged by rising sea levels.

While Germany spearheads an initiative from richer nations known as Global Shield, which would help with disaster-preparedness measures for developing nations and insurance, experts have estimated that the annual climate loss-and-damage financing needs of developing countries could reach $290 billion to $580 billion by 2030. The Wall Street Journal has viewed: “Governments are also negotiating over how climate will be financed after 2025, when current arrangements end. Developing countries have asked rich nations to channel $1.3 trillion to them annually starting in 2030.”