Following extensive negotiations, the UN talks reached a breakthrough agreement on Sunday, November 20, 2022. Over 200 countries consented to establish a fund that will assist in paying for the severe effects of climate change on poorer countries. The conclusion has been regarded as historic by experts, analysts, and individuals.
The capital preservation, also known as the “loss and damage” fund, will assist disaster-affected nations by giving them financial restitution after suffering from climate change-related disasters such as heat waves, droughts, famines, floods, and rising sea levels.
Molwyn Morgorson Joseph, Cabinet minister and former Chairman of the Antigua and Barbuda Labour Party, stated, “Today, the international community has restored global faith in this critical process that is dedicated to ensuring no one is left behind."
The agreement posits that the fund will rely on payments from industrialized nations and private and public organizations during the initial stages. A crucial demand, however, has been made by the European Union and the United States that countries like China and other major polluters should be exempted from receiving the fund as they have the financial means and obligation to pay their fair share despite being categorized as developing countries.
China falls under “developing economies” according to the UN’s country classification, making it eligible for climate compensation. The country, however, is the largest global generator of greenhouse gas emissions and has the second-largest economy. While countries like China with significantly growing economies do not bear the fund payment responsibility currently, this may change over the next few years.
The agreement relies on uncertain contributions to be made from developed nations. The United States, the European Union, and other wealthier polluters made a vow ten years ago to mobilize $100 billion annually by 2020 for climate finance. The money would assist developing nations in switching to renewable energy and preparing for potential climate risks. The 100 billion goal fell short by around $17 billion, compromising the efforts to make the shift.
According to Mohamed Adow, executive director of Power Shift Africa, the fund will not be functional without the actual money. “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,” said Adow.
While there are severe obstacles to overcome, the Climate Compensation Fund is a press for a strong stand on remediation and a significant victory for less developed countries.
After decades of turbulent years marked by stalling strategies from wealthier nations, a newfound sense of togetherness, generosity, and teamwork has triumphed.
Pakistan's climate minister, Sherry Rehman, expressed that the nation is hoping the climate fund agreement marks the culmination of a 30-year journey for them. The country experienced catastrophic floods this year, swamping one-third of the nation and losing millions of humans and billions of financial resources.
India’s Union Environment Minister, Bhupender Yadav addressed the Egyptian presidency during the COP27 closing, “The world has waited far too long for this. We congratulate you on your untiring efforts to evolve a consensus.”
The discussions on suggestions for the fund's structures that will be taken into consideration at the COP summit next year will be held in March 2023. A 24-member committee, 10 from developed countries and 14 from developing countries, will be the participating party.
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