Our Burning Planet


COP27 makes history with agreement on ‘loss and damage’ fund for vulnerable countries impacted by climate change

COP27 makes history with agreement on ‘loss and damage’ fund for vulnerable countries impacted by climate change
Activists demand climate finance and debt relief for countries exposed to the effects of climate change at an impromptu demonstration at the UNFCCC COP27 climate conference on 9 November 2022 in Sharm el-Sheikh, Egypt. (Photo: Sean Gallup / Getty Images)

In a momentous decision, negotiators at COP27 have heeded calls to set up a fund to compensate vulnerable countries for the adverse impacts of climate change.

COP27 was set for a showdown between developing and developed countries. As a conference held on the African continent, it was hoped that the plight of the most impacted and vulnerable to the impacts of climate change would be recognised in a tangible, financial way. 

After marathon negotiations in Sharm El-Sheikh, Egypt, hope has turned to reality after the historic announcement that governments from more than 190 countries agreed to set up a fund dedicated to addressing “loss and damage” next year.

But what exactly is meant by loss and damage?  

The United Nations Framework Convention on Climate Change (UNFCCC) explains that “human-induced climate change, including more frequent and intense extreme events, has caused widespread adverse impacts and related losses and damages to nature and people beyond natural climate variability.

“Some development and adaptation efforts have reduced vulnerability, but the rise in weather and climate extremes has led to some irreversible impacts as natural and human systems are pushed beyond their ability to adapt.”

Loss and damage, in short, refer to the damage done by human-induced climate change that occurs beyond the adaptive capacity of countries. These countries are usually the poorest and least developed and have contributed the least to the impacts that they are today the greatest victims of.

While long recognised by the UNFCCC, loss and damage has never had its own dedicated financial mechanism – until today.

Parts of the proposal by the COP27 Presidency on “Matters relating to funding arrangements responding to loss and damage associated with the adverse effects of climate change, including a focus on addressing loss and damage” are worth quoting:

“Noting the increasing urgency of enhancing efforts to avert, minimize and address loss and damage associated with the adverse effects of climate change in the light of continued global warming and its significant impacts on vulnerable populations and the ecosystems on which they depend, as illustrated by the findings in relevant recent scientific reports…

“Acknowledging that existing funding arrangements fall short of responding to current and future impacts of climate change and are not sufficient to address the existing funding gaps related to providing action and support in responding to loss and damage associated with the adverse effects of climate change.” 

The proposal continues that the Conference of the Parties (COP): 

“1. Acknowledge the urgent and immediate need for new, additional, predictable and adequate financial resources to assist developing countries that are particularly vulnerable to the adverse effects of climate change in responding to economic and non-economic loss and damage associated with the adverse effects of climate change, including extreme weather events and slow onset events, especially in the context of ongoing and ex post (including rehabilitation, recovery and reconstruction) action;

2. Decide to establish new funding arrangements for assisting developing countries that are particularly vulnerable to the adverse effects of climate change, in responding to loss and damage, including with a focus on addressing loss and damage by providing and assisting in mobilizing new and additional resources, and that these new arrangements complement and include sources, funds, processes and initiatives under and outside the Convention and the Paris Agreement;

3. Also decide, in the context of establishing the new funding arrangements referred to in paragraph 2 above, to establish a fund for responding to loss and damage whose mandate includes a focus on addressing loss and damage.”


COP27 damages an d losses tweet


Speaking to Our Burning Planet under the shade of a shuttered Hard Rock Cafe pop-up on Saturday 19 November, Barbara Creecy, Minister of Forestry, Fisheries and Environment said “Of course, we are pleased on the loss and damage issue. We are pleased that there’s agreement to set up a financing mechanism. And we think that’s really important for vulnerable countries.

Visit Daily Maverick’s home page for more news, analysis and investigations

Alpha Oumar Kaloga, the Regional Adviser for the Africa Country Programme Division at Green Climate Fund and lead negotiator for the Africa Group at COP27 called the agreement a “unique moment” and “a win for all citizens of the world”.

COP27Loss and damages tweet

Laurence Tubiana, CEO of the European Climate Foundation in a statement said “This COP caused deep frustrations but it wasn’t for nothing. It achieved a significant breakthrough for the most vulnerable countries. The Loss and Damage fund, a dream at COP26 last year, is on track to start running in 2023. 

“There is a lot of work still to be done on the detail, but the principle is in place and that is a significant mindset shift as we deal with a world in which climate impacts cause profound loss.”

Mohamed Adow, the Executive Director of Power Shift Africa said that “COP27 has done what no other COP has achieved and created a loss and damage fund to support the most impacted communities of climate change. This has been something that vulnerable countries have been calling for since the 1992 Rio Earth Summit and has been a part of the formal negotiations since COP19 in Warsaw in 2013. Countries have also agreed on the process for working out its funding.

“To quote the Three Lions England football song, after 30 years of hurt, climate action is finally coming home on African soil here in Egypt.

“At the beginning of these talks loss and damage was not even on the agenda and now we are making history. It just shows that this UN process can achieve results and that the world can recognise [that] the plight of the vulnerable must not be treated as a political football. 

“It [is] worth noting that we have the fund but we need money to make it worthwhile. What we have is an empty bucket. Now we need to fill it so that support can flow to the most impacted people who are suffering right now at the hands of the climate crisis.”  OBP/DM

Absa OBP

Comments - Please in order to comment.

Please peer review 3 community comments before your comment can be posted

A South African Hero: You

There’s a 99.7% chance that this isn’t for you. Only 0.3% of our readers have responded to this call for action.

Those 0.3% of our readers are our hidden heroes, who are fuelling our work and impacting the lives of every South African in doing so. They’re the people who contribute to keep Daily Maverick free for all, including you.

The equation is quite simple: the more members we have, the more reporting and investigations we can do, and the greater the impact on the country.

Be part of that 0.3%. Be a Maverick. Be a Maverick Insider.

Support Daily Maverick→
Payment options

MavericKids vol 3

How can a child learn to read if they don't have a book?

81% of South African children aged 10 can't read for meaning. You can help by pre-ordering a copy of MavericKids.

For every copy sold we will donate a copy to Gift of The Givers for children in need of reading support.