A compensation fund has been agreed to at the UN climate summit

There are no specifics yet on who will pay or how the fund will work.
A compensation fund has been agreed to at the UN climate summit

The 27th United Nations climate change summit (COP27) has concluded in Egypt.

The parties have made a “historic” agreement to set up a fund that would compensate poorer countries for climate-related extreme weather events.

However, there was minimal progress on emissions reduction targets.

Here’s what you need to know.

‘Loss and damage’

The parties agreed to set up a fund to help “particularly vulnerable” developing countries meet “loss and damage” due to climate change.

Developing countries have been calling for a loss and damage fund for several years, but wealthier countries have previously been reluctant.

Senior UN representative Simon Stiell called the agreement “historic… [it] does move us forward and it benefits the vulnerable people around the world”.

How will it work?

The agreement did not include specifics on how the fund would work, who would pay, and what would count as an event significant enough to trigger a payment.

A working committee has been set up to develop these details over the next year. Denmark, Belgium, Germany, and Scotland have already made specific funding commitments.

Will Australia pay?

Australia has not yet made a specific funding commitment. In an interview this morning, Treasurer Jim Chalmers said Australia supported the “principle” and had a “responsibility… to help”.

In Parliament today, Opposition Leader Peter Dutton criticised Australia’s support of the idea. “Doesn’t charity begin at home… when will [the Government] start helping Australian families instead of giving away their money?”

Emissions reduction

The summit did not make significant new progress on emissions reductions targets.

The final agreement included an “invitation” to countries to consider “further actions” to reduce emissions, and committed “further efforts” to limit warming to 1.5ºC.

However, it did not specifically ask countries to commit to more ambitious targets, even though current targets are not enough to limit warming to 1.5ºC.

A last-minute change to the text called on countries to increase “low-emission and renewable energy” instead of simply “renewable energy”, which some experts have warned will encourage the more short-term use of natural gas.

The President of COP26, Alok Sharma, said the outcome meant the 1.5ºC target was “on life support”.

“Emissions peaking before 2025, as the science tells us is necessary: not in this text,” Sharma said at the closing of the summit.

“Clear follow-through on the phase down of coal: not in this text. A clear commitment to phase out all fossil fuels: not in this text… all of us need to look ourselves in the mirror, and consider if we have fully risen to [the] challenge over the past two weeks.”

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