Egypt, which is hosting the upcoming COP27 climate summit, is working on how to include compensation for economic losses caused by climate catastrophes on the formal agenda of the November summit, as pressure grows from vulnerable countries to prioritise the issue.
Wael Aboulmagd, Egypt’s special representative for the COP27, told reporters that the host country is “putting a lot of effort” into ensuring that the question of how to compensate countries that have experienced heavy economic loss due to climate catastrophes is prioritised at the forum.
“We need to find a practical solution that accommodates the various concerns and it’s up to us as the incoming presidency to sort of navigate and finesse this process,” Aboulmagd told reporters on Wednesday (28 September). “We are inching closer.”
Including “loss and damage” on the agenda is a complicated task because lower-income and climate-vulnerable countries are seeking compensation for damages from climate-induced extreme weather events while industrialised nations are wary of creating a fund because of the liabilities they may face.
Aboulmagd said as the incoming COP president, Egypt needs to “navigatenavigate” the disparate positions and that it has appointed two ministers to come up with a plan for how to include “loss and damage” on COP27’s formal agenda. The two ministers are Germany’s special envoy for international climate action, Jennifer Morgan, and Chile’s environment minister, Maisa Rojas.
At last year’s COP26 in Glasgow, the United States and the European Union rejected calls for a fund to compensate countries for climate-driven losses. But as different countries grapple with extreme weather this year, pressure is growing for “loss and damage” to be prioritised at COP27.
“At COP 27 we need to work together to show leadership and move forward on addressing this very important issue, particularly when it comes to finding a creative way … to find financing for countries who are in extreme need to address the immediate losses and damages that wipe out a significant part of their annual GDP,” Aboulmagd said.
Egypt also highlights the central role played by the private sector as part of the need to restructure the overall climate finance landscape. According to the Ambassador, more than 50% – or $650 billion – of total climate finance comes from private investors and these funds go mostly to mitigation actions in developed countries.
The consequence is that adaptation actions are overlooked, and developing countries are left without appropriate financing. These instruments are mostly loans, which account for 61% of the total measures. Of these loans, only 6% goes to adaptation, he said.
“We need to look at the totality of the picture, make sure that there is a better distribution,” Aboulmagd stated. “I don’t believe necessarily an equal distribution to the penny. But yet, there has to be funding, finance for adaptation.”
US and China urged to put aside their differences
The upcoming COP27 summit in November comes at a critical time, with several complicating factors, including a slow post-pandemic recovery and the dramatic consequences of the war in Ukraine.
Tensions between the United States and China, the world’s two largest emitters, also risk endangering the negotiations.
“We urge them to rise to the occasion and hopefully be able to find a way to move forward…on some of these very important and crucial issues,” Aboulmagd said, asking the leaders to overcome their differences for the greater good.
While the war in Europe is hampering efforts to combat climate change in the short term, causing rising energy and food prices, the Ambassador called on all countries to show ambition and not use the current situation as an excuse to backslide in their climate action.
On the contrary, he urged countries to raise the level of ambition in order to reduce dependence on fossil fuels and expedite the green transition with increasing reliance on renewables.
“There is no added time. There is no extra time,” he said to journalists. “We trust that countries from east and west, north and south, will come together, will show leadership and will take the necessary action.”
