/ 1 December 2022

COP27’s loss and damage fund delivers climate justice despite conference shortcomings


The establishment of a loss and damage fund is one of the main historic outcomes achieved at the 27th Conference of the Parties (COP27). This is important for the African continent as we are so vulnerable to the impact of climate change

This year’s climate conference was termed “implementation COP”. There was general consensus among the parties to the Paris Agreement that the main pillars of implementation are action on mitigation and adaptation; support for developing countries through finance, and other “means of implementation”. There was an expectation that previous financial pledges to accelerating implementation ahead of COP27 would finally be fulfilled. The conference was also framed as the “Africa COP”, with the expectation that issues central to Africa would be prioritised and resolved. It is important then to question whether COP27 delivered on addressing issues important to African countries. 

The main outcomes of COP27 were the establishment of the loss and damage fund; the launching of the adaptation agenda to support adaptation and to build resilience for four billion people by 2030, and the go-ahead for the trading of carbon credits. However, indecision about the unresolved issue of phasing out fossil fuels was disappointing — especially considering the current backtracking to fossil fuels by developed countries in light of their own energy crises. 

Loss and damage” was one of the major issues to be tackled at COP27. This was due to the growing global impacts of climate-related events, which disproportionately affect the most vulnerable, creating irreparable damage. Loss and damage is the crucial third pillar of helping people to rebuild after they have experienced climate-related harm. 

Why is a loss and damage fund important for Africa? Firstly, at its core, the fund delivers justice to those communities that suffer harm from climate change but which have contributed far less to global emissions, even as the developed countries that have contributed the most to emissions still profit from fossil fuels. 

The African continent contributes no more than 4% to global carbon dioxide emissions, much less than what other countries contribute. This fund will be able to deliver justice, in some part, for Africa and vulnerable countries. This is something that has been lacking in climate change negotiations for a long time. 

Secondly, countries incur unsustainable debt as they secure loans needed for social protection in the wake of climate disasters. The loss and damage fund will be able to cushion countries from incurring climate finance debt. 

However, it has been made clear that the loss and damage fund is not a claim for compensation or liability from developed economies. This was a compromise made to get the topic of loss and damage on to the COP27 agenda. The US reiterated that it would not support any official discussion until it was agreed that there would be no claim of liability or compensation during the agenda negotiations. 

The loss and damage fund still needs to be quantified in terms of how it is going to be paid out and which countries must contribute to the fund. This will be discussed further at COP28. Therefore, while the establishment of the fund is a progressive step forward, there is more to be done to ensure the fund actually materialises and is channelled to the victims of climate change. 

Left waiting: While the decision to set up a loss and damage fund for climate change is a welcome step, discussion on who will pay and who will benefit will only happen at next year’s Conference of the Parties. Photo: Luis Tato / FAO / AFP

Nevertheless, the establishment of a loss and damage fund at COP27 signified a historic milestone and a victory of progressive action, despite other shortcomings of the conference such as those relating to the reduction of emissions. The loss and damage fund should not distract from the fact that the world is not on track to halve emissions by 2030 or to meet the global target of limiting the planet’s warming to 1.5°C by 2050. 

COP27 did not make tangible progress towards reducing fossil fuel use, nor was decisive action taken on mitigation. COP26 had questionably resorted to a “phasing down” of fossil fuels and COP27 only reiterated that as there was no clear stance on oil and gas use or any agreement on the phasing out of fossil fuels. This continuous watering down of fossil fuel use is not sending any clear message about the urgent action required to reduce emissions.   

The loss and damage fund must not be a gateway for developed countries to avoid climate action, specifically mitigation efforts, by paying for the damage caused by climate change. This concern is greater in light of the approval for parties to be able to trade carbon credits. This only perpetuates the cycle of polluting and then throwing money at the issue without actually reducing emissions. The need grows ever more urgent for developed countries that are contributing the most to global emissions to reduce these emissions. 

Reducing emissions by reducing fossil fuel use remains the only way to limit global climate warming to 1.5°C, and to fight climate change. COP27 fell short on a commitment to reducing emissions. Despite delivering tangible outcomes for Africa and other developing countries with the loss and damage fund, COP27 still failed to safeguard a global climate-warming target. The lack of any decision on fossil fuel mitigation signifies that developed countries will continue to emit as long as they can pay for damages without admitting any liability.

Dr Nqobile Xaba is a researcher at the Mapungubwe Institute for Strategic Reflection and co-editor of the institute’s publication, A Just Transition to a Low Carbon Future in South Africa.

The views expressed are those of the author and do not necessarily reflect the official policy or position of the Mail & Guardian.