Climate Change Minister James Shaw flags difficulty in making progress on climate damage payments

By Hamish Cardwell of RNZ

The scene is set for fraught negotiations over who should pay for climate damage at the COP27 climate conference in Egypt.

Rich countries are slowly acknowledging they must pay for the loss and damage to developing countries, including in the Pacific, who are already being walloped by climate change.

Pacific Islands Climate Action Network regional policy coordinator Lavetanalagi Seru said climate change was already flooding homes and destroying livelihoods.

"There [are] already cases where there are losses of ancestral lands, losses of traditional knowledge and cultural practices as a result of sea level rise, as a result of climate displacement and climate relocation."

For the first time at COP there will be official talks about rich countries stumping up for the damage already being done in the developing world.

Climate Change Minister James Shaw said having loss and damage on the table at all was a breakthrough.

"I'm pleased that we are actually now at least able to start talking about it, but it's going to be really contentious and really difficult to make progress."

New Zealand has earmarked $20 million in funding for loss and damage, putting it among a handful of mainly European countries to set aside cash specifically.

But some estimates put the true cost of damage at half a trillion US dollars' in just the past decade alone.

Countries' contributions are seen as symbolic, to give the issue more weight during talks.

Daniel Ribeiro of Mozambican environmental advocacy group Justiça Ambiental said the recent pledge by Belgium was "a single act floating in a sea of inaction by the global north".

The US, EU, Canada, and Australia have for years blocked or delayed progress setting up a fund, but US climate envoy John Kerry has indicated he is open to discussion this year.

Antigua and Barbuda Prime Minister Gaston Browne, speaking for the Alliance of Small Island States, told Earth Negotiations Bulletin that fossil fuel companies must pay a global carbon tax to fund loss and damage.

Rich countries block talk of 'liability' and 'compensation'

There were heated, nearly all-night negotiations earlier this week, to get the topic onto COP27's agenda.

Pacific Islands Forum programme adviser Karlos Moresi said rich countries were worried it could leave them on the hook for huge sums of money.

"And the sticky point really is around the need, from the developed countries perspective, that the loss and damage discussion should not lead to compensation and liability, which is an undefined quantum if you want to talk about why they so resistant on that particular aspect."

Moresi said rich countries ultimately blocked "liability" and "compensation" from being part of the loss and damage discussions.

But he did not believe developing countries sold out by agreeing to that.

"While we are not naive to the push that we are getting back from the developed countries, we are encouraged by the fact that we even got it on the agenda.

"And while we may not get a result straight away, we're definitely on the pathway of getting there."

Seru said Pacific countries had a clear idea of how the money should be administered.

"Any future ... loss and damage finance ... [must] not be repurposed as adaptation finance.

"But also importantly that the funds are additional and dedicated specifically for loss and damage initiatives."

Shaw said, while the New Zealand government was not opposed to a specific funding facility, it also supported other arrangements.

"We tend to work directly with islands in the Pacific, and that is because a lot of those countries find it quite hard to work with some of the big multilateral organisations.

"They find them unresponsive, bureaucratic and slow."

Earth Negotiations Bulletin reports that, in a sign of resolve to get an agreement on funding arrangements for loss and damage, some political leaders did more than just brief their negotiators, as UNFCCC executive secretary Stiell had asked. They went straight into the informal consultations themselves.

Developing countries want agreement by the end of COP that a funding facility must be operating by 2024, but expect rich countries to try and slow walk that.

RNZ with additional reporting by Reuters