COP27 resolves compensation fund for climate damage in poorer countries

The world climate conference in Egypt agreed for the first time on a common pot of money to compensate for climate damage in poorer countries. The representatives of around 200 states decided on the new fund early on Sunday morning. However, the necessary approval of the final declaration was still pending. The aim is to cushion the inevitable consequences of global warming, such as increasingly frequent droughts, floods and storms, but also rising sea levels and desertification. The question was the biggest point of contention throughout the two-week conference in Sharm el Sheikh, which was extended by around 36 hours.

The resolution does not mention any sums for the new compensation fund, nor who exactly should pay in. Developing countries that are particularly at risk are to be favoured. The EU in particular had insisted on this limitation. The US initially blocked the issue, while the group of more than 130 developing countries known as the G77 built pressure along with China. After initial reluctance, the European Union finally changed its mind.

Ani Dasgupta, President of the US think tank World Resources Institute, spoke of a "historic breakthrough". The fund will be a lifebelt "for poor families with destroyed homes, farmers with ruined fields and islanders displaced from their ancestral homes." At the same time, representatives of developing countries left without clear commitments on how the money pot would be overseen. According to the World Resources Institute, more than 3.3 billion people worldwide live in areas that are particularly vulnerable to climate change.

UN Secretary-General António Guterres praised the agreement as "an important step towards justice". "Certainly this is not enough, but it is a much-needed political signal to restore lost trust," Guterres said in a video message published on Twitter early Sunday morning. The voices of the countries most affected by the climate crisis must be heard. The UN chief announced that the United Nations would closely monitor the process that had started.

Climate expert Jan Kowalzig from Oxfam Germany described the decision as a "milestone" and "real success in the fight against climate change". For years, such a pot of money was blocked by the rich countries for fear of being held responsible for causing the climate crisis. "The fact that the industrialized countries have finally moved was more than overdue given the devastation that the climate crisis is already wreaking in many of the poorer countries of the Global South," he said.