Policy & Regulation

21 Nov 2022

COP27 Reaches Key Deal on “Loss and Damage” Funds for Nations Vulnerable to Climate Change

21 Nov 2022  by   
Almost 200 countries at the COP27 climate conference in Egypt reached a landmark agreement in the early hours of Sunday morning to launch a fund to help "vulnerable" nations suffering most from climate change.


Negotiations did not lead to any agreement on a proposed global phase out of fossil fuels, despite repeated pleas about the impending failure to reach key climate objectives of the original Paris Agreement.

The final cover document reproduced statements agreed at COP26 about a “phase down of unabated coal power” and “phase out of inefficient fossil fuel subsidies”.

The Egyptian hosts also won approval for giving “low-emission” energy a more prominent role in the energy transition. This clause was seen as offering support for the role of natural gas, and hydrogen derived from natural gas, among the means for tackling climate change

The deal, announced by Egyptian President Sameh Shoukry, was applauded by many delegates.

Paris Agreement on 'life support'

Yet its water-down wording was slammed by Alok Sharma, the UK's COP26 president.

Sharma listed COP26 initiatives weakened or omitted from this year's final agreement: "Emissions peaking before 2025, as the science tells us is necessary. Not in this text.

"Clear follow-through on the phase down of coal. Not in this text.

"A commitment to phase out all fossil fuels. Not in this text.

"And the energy text, weakened in the final minutes... ," said an apparently exasperated Sharma, who hit the table during his speech at the closing plenary session of this year UN climate summit..

"Friends, I said in Glasgow that the pulse of 1.5 degrees was weak. Unfortunately, it remains on life support,” he said.

The COP27 final agreement also was short of detail on funding arrangements for future loss and damage aid, including the fraught questions of how to define "vulnerable" nations and how contributions should be decided.

The COP28 climate summit is scheduled to convene on 30 November 2023 in the United Arab Emirates.

UN Secretary General Antonio Guterres described the deal as a "much-needed political signal", but warned it will "clearly not be enough".

Scenes ahead of the last-minute deal in a sweltering Sharm el-Sheikh included a shaded power-nap for US climate envoy John Kerry, who had a bout of Covid-19 during the two-week event.

Climate campaigners welcomed the breakthrough on loss and damage provisions, but were quick to criticise the failure to agree tougher measures on controlling emissions of greenhouse gases.

“While a deal on loss and damage finance is a positive step, it risks becoming a down payment on disaster unless emissions are urgently cut in line with the 1.5°C goal. By refusing to phase out fossil fuels, governments have failed to reach a more ambitious agreement than in Glasgow last year and put our health and security at risk," stated Katie White, executive director of advocacy, at the World Wildlife Fund.

Climate scientists broadly agree that 1.5C is the most that the world can be allowed to warm compared to pre-industrial temperatures. Yet we are already at 1.2C and, on current levels of action, are heading to 2.4C by the end of the century.


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