COP27 is the next meeting of 198 countries that have signed the UN Framework Convention on Climate Change to be held in Sharm El Sheikh, Egypt, on 6-18 November 2022.
The UN and the international civil society bodies are urging the world’s industrialised nations to ‘lead by example’ by taking ‘bold and immediate actions’.
Egypt, the host for COP27, has included compensation for economic losses due to climate catastrophes on the summit agenda, as pressure grows from vulnerable countries to prioritise this issue.

This year's climate summit will be a key milestone for multistakeholder actions and partnerships across the five key issues of nature, food, water, industry decarbonisation and climate adaptation.

As per the latest UN Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment report, a mix of mitigation and adaptation options implemented in a participatory and integrated manner can enable rapid, systemic transitions – in urban and rural areas – that are necessary elements of an accelerated transition consistent with limiting warming to 1.5°C. Countries around the world, however, are failing to live up to their commitments to fight climate change. Only 26 of 193 countries that agreed to step up their climate action last year have followed through with more ambitious plans.
By 2050, the economic cost of loss and damage in developing countries is estimated to be between $1-1.8 trillion. Considering the risks and impact of climate change have been getting worse each year, developing nations are also calling for payments for the devastation and destruction they face now. Pakistan estimates the total losses from its recent floods could be as high as $40 billion, pushing the country further into a financial and humanitarian crisis, with the government appealing for immediate debt relief from global lenders.
Potential funding models for COP27 agenda

In the wake of the Pakistan floods, Denmark became the first country in September 2022 to offer specific loss-and-damage funding of $13.1 million. German Foreign Affairs Minister, Annalena Baerbock, said her government backed putting the issue on the agenda for COP27, and, in collaboration with Egypt as conference host, appointed its climate envoy, former Greenpeace International Executive Director, Jennifer Morgan, and Chile’s Environment Minister, Maisa Rojas, to try to find common ground.

The Vulnerable Twenty (V20) Group and the G7 will also launch the Global Shield against Climate Risks to respond to loss and damages at COP27 in a wider effort to accelerate pre-arranged financing at speed and scale. These are positive developments that underscore the need to elevate climate reparations at COP27.

Michai Robertson, the AOSIS lead finance negotiator, gave a presentation on Funding Arrangements for Addressing Loss and Damage to the participants of the 2022 European Capacity Building Initiative at the Oxford Seminar. Robertson explained that, in 2022, the IPCC identified existing gaps in funding arrangements for loss and damage, which are not comprehensively addressed by current financial, governance and institutional arrangements, particularly in vulnerable developing countries.

He highlighted the need to understand four key elements: investment criteria, access, results management and governance. Focusing on access, Robertson stressed understanding the way support must be received, as well as which entities are eligible to access such support, emphasising grant-based support and commensurate urgency. It would follow a similar model to the UN’s flagship Green Climate Fund, with regular – voluntary – fundraising rounds.
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