Adoption of Climate Compensation Fund

A fraught UN climate summit wrapped up with a landmark deal on funding to help vulnerable countries cope with the devastating impacts of global warming. According to the details, the two-week talks in Egypt’s Red Sea resort of Sharm el-Sheikh, which at times appeared to teeter on the brink of collapse, unexpectedly delivered a major breakthrough on a fund for climate loss and damage.

Over two weeks, the Sharm El-Sheikh Climate Implementation Summit concluded with a last-minute consensus on the adoption of the Loss and Damage Fund under the UN to compensate for the losses of the most vulnerable nations that occurred through climate-induced events in the world. Interestingly, the constitution of the loss and damage fund was not primarily on the agenda of the Sharm El-Sheikh Climate Implementation Summit, while the idea of climate justice and compensation of losses to vulnerable nations was presented and actively advocated by Pakistan, who co-chaired the COP-27 and played an instrumental role in mobilizing the G77 countries.

In fact, the developed nations had lost interest in Paris Accord and global initiatives on Climate Change because they are less vulnerable to the effects of global warming and have greater financial responsibility in this regard. The western nations opposed the creation of loss and damage funds to the last movement because they were the legitimate contributors to it and it took extra two days for the participating delegates to achieve consensus on the subject. However, the developing nations had made a miracle by getting climate justice for their people, who are battling the worst effects of climate-induced floods, droughts, forest fires, and growing famines in Africa and some parts of Asia.

The establishment of the Loss and Damage Fund and financial arrangements to address the issue of climate justice was a significant win for Pakistan and all of the developing world. Currently, the Pakistani nation is suffering from the disastrous outcomes of torrential flooding, while a bulk of reconstruction and rehabilitation work is pending amid a freezing winter.

According to the experts, the formation of a loss and damage fund is a midpoint of a long and thorny journey of getting its full manifestations including its generation, volume, usage, allocation, etc. Pakistan and other climate-vulnerable nations have to wait for months to get the full effect of the compensation fund.