Next week's COP27 climate meeting in Egypt is likely to feature intense clashes between industrialized nations and developing countries over climate damage costs.
Why it matters: Failure to move forward on a financing mechanism for what the UN calls "loss and damage" — compensation for vulnerable nations that are being hit hardest by climate change might make for a failed summit.
The big picture: COP27 is supposed to be the "implementation summit," where pledges on everything from reducing deforestation to boosting funding for adaptation, climate mitigation and cutting methane emissions are turned into actions.
- Developing countries, which at COP27 will be led by flood-ravaged Pakistan, have signaled that they will push hard for a financing "mechanism" for loss and damage.
- This compensation is supposed to address impacts that were caused mainly by emissions from industrialized nations, and that are beyond poorer countries' capacity to adapt.
- Such impacts will be at the forefront at COP27, particularly the devastating flooding that swept across Pakistan and the ongoing drought and looming famine in the Horn of Africa.
The intrigue: Industrialized nations, including the U.S. and EU countries, plan to support the discussion of loss and damage in the wake of last year's COP26 summit. However, they are skittish about committing to a specific way of paying for it.
- That stance will come under pressure in Sharm el-Sheikh, as developing countries seek specific funding arrangements given how quickly climate disasters are ratcheting up in scope, severity and frequency.
- "We need actual money," Avinash Persaud, special envoy to Barbados prime minister Mia Mottley, told reporters on Tuesday.
- Ani Dasgupta, president and CEO of the World Resources Institute, during a press conference Tuesday, said commitments and real progress on loss and damage would be "the litmus test for this COP."
Reality check: Loss and damage is sometimes referred to as "climate reparations," and has been under debate in the UN climate talks since their start in the early 1990s.
- The issue is rooted in the disparate impacts of climate change around the world, with a relatively small group of countries — roughly the G20 nations — responsible for most of the warming-related impacts we're experiencing today.
- Much of the developing world, particularly in Africa, the small island nations in the Pacific and South Asia are extremely vulnerable to climate disasters, despite having played little role in causing them.
- A long-running concern among industrialized nations is that a loss and damage mechanism could be equated with establishing legal liability for causing climate damages.
The big question: Will countries feel more of an incentive to cooperate on climate at this summit, or less?
Between the lines: The clash may be bitter, given that western nations have fallen short on other funding commitments.
- A 2009 promise of $100 billion per year for developing country climate aid has not fully materialized.
- In addition, the prospect of a Republican House and possibly Senate means that the likelihood of future high dollar commitments from the U.S. are likely to be viewed skeptically.
- The U.S. and other industrialized countries have committed to doubling climate adaptation funding, but have yet to follow through.
- Even celebrated new partnerships to help transition developing economies away from carbon-intensive coal are turning out to need more funding.
The bottom line: Still, COP27 is likely to wrestle with whether and how to operationalize the concept with a focus and determination that no COP has before it.
- "It's not a question of money," said longtime climate negotiations participant Alden Meyer, now with E3G, on a Tuesday media call. "It's a question of political will."
