COP27: Compensation for developing countries due to climate change damage. Jeongmin Yoon, ESG Intern, American University.

 

 Sameh Shoukry, president of the COP27 climate summit, receives a standing ovation following a speech during the closing plenary session at the U.N. Climate Summit, Sunday, Nov. 20, 2022, in Sharm el-Sheikh, Egypt. (AP Photo/Peter Dejong)

At the 27th General Assembly of the Parties to the United Nations Framework Convention on Climate Change (COP27), the creation of a fund to compensate developing countries for "loss and damage" due to climate change was approved.

COP27 closed on the 20th of November (local time) after adopting the final agreement, the "Sharm el-Sheikh Implementation Plan," two days after the original closing date. The general meeting was held in Egypt on the African continent, which has been severely damaged by global warming (extreme drought), factors like "adaptation" and "loss and damage" were discussed as the biggest issues between developed and developing countries. At the general meeting, developing countries demanded greater responsibility from developed countries that have emitted huge amounts of greenhouse gases in the process of industrialization. This is because climate-related damage, like rising sea levels, is increasing rapidly in underdeveloped countries. These countries are less infrastructure intensive than advanced countries, and climate damage impacts them even more.  In particular, a resolution calling for compensating countries by financing "loss and damage" caused by climate change was adopted for the first time in 30 years. This had not occurred since the UNFCCC was adopted, and after fierce negotiations throughout the 27th general meeting, it agreed to establish a fund for the most vulnerable countries.

According to a report released in June, 55 countries most vulnerable to climate change suffered $525 billion (about 705 trillion won) in damage from climate disasters over the past 20 years. Some studies estimate that this will reach $580 billion by 2030. In addition, the cost of responding to climate change in developing countries will increase, exceeding 3,000 trillion won per year by 2030. The report estimates that the investment needed to enable developing countries around the world to exit fossil fuels and respond to extreme climate change will be $1 trillion (about 1,388 trillion won) in 2025 and $2.4 trillion (about 3,330 trillion) in 2030.

From developed countries to developing countries, compensating losses and damages, detailing the kind of damage compensated for in the future, detailing exactly who will pay the compensation, and in what way are the next steps expected to materialize. As of today, no clear discussion of compensation has been released yet, and the U.S. drew a line by stating clearly that they were not agreeing to an obligation but, rather, agreeing to provide assistance on the social dimension. I think agreeing to provide ANY compensations was of great significance, and am please that compensation for developing countries due to global warming has been adopted on the agenda, but I wonder how much actual compensation will reach developing countries. I think it will be necessary to continue to think and talk about about climate issues and to pay close attention to further compensation mechanics to make this agreement effective.