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9 Nov 2022

Damian Carrington, The Guardian

COP27: ‘Significant’ moves on climate disaster funds lifts hope of success on loss and damage

"Significant’ moves on climate disaster funds lift Cop27 hopes", 9 November 2022

A series of symbolic moves on climate finance at Cop27 suggests positive momentum could be starting to build on a pivotal issue at the UN summit in Egypt.

The UK said it would allow some debt payment deferrals for countries hit by climate disasters, while Austria and New Zealand put forward funding for loss and damage, which is the cost of rebuilding in poorer nations after unavoidable climate impacts.

The provision of funding by rich, polluting nations to those vulnerable nations that have done little to cause the climate crisis is central to any success at Cop27...

The UK said its export credit agency, which loans money to overseas buyers of British goods and services, will become the first agency to include “climate resilient debt clauses” in its lending. These stop debt payments for two years if a nation is hit by a climate disaster, freeing up funds to deal with the emergency...

The move was strongly backed by Avinash Persaud, a special envoy to the Barbados prime minister, Mia Mottley, the most prominent backer of major reforms to the global financial system to deliver climate finance. “Adopting these clauses in debt instruments is the single most impactful way of making the international financial system fitter for the new world of shocks and for international development. I cannot commend this initiative by the UK government enough.”

Mottley’s Bridgetown Agenda, which sets out sweeping proposed reforms to the World Bank, International Monetary Fund (IMF) and other multilateral development banks (MDBs), received the backing of France at Cop27. That is significant as it is the first developed country to support the agenda. A group of 10 developed nations, including all the G7, are also putting pressure on the banks to reform. Only one MDB includes climate clauses...

Scotland was the first nation to break what campaigners called a “taboo” on providing loss and damage money, followed by Denmark, Belgium and Germany. Austria joined the group on Tuesday at Cop27, pledging $50m (£44m). New Zealand also announced a $20m climate fund for land and resources lost by developing countries – in effect loss and damage...