Rich countries driving the climate crisis have agreed to pay developing nations for damage. But collecting the money will be tough.

Rich countries driving the climate crisis have agreed to pay developing nations for damage. But collecting the money will be tough.
The entrance to the United Nations' COP27 climate summit in Sharm el-Sheikh, Egypt.Catherine Boudreau/Insider
  • Developing nations won creation of a "loss and damage" fund for climate disasters.
  • Fossil fuel interests prevailed, with countries walking away with few new plans to curb pollution.

In the end, no one got everything they wanted at the United Nations' climate summit.

Climate diplomats left Sharm el-Sheikh, Egypt, with a historic deal — 30 years in the making — for rich countries to pay developing nations for the damages they are already facing from a warming planet. But the negotiators who gathered in the resort city along the Red Sea failed to hammer out a more aggressive plan to curb the greenhouse gas emissions that are driving the crisis.

Nearly 200 countries on Sunday agreed to set up a "loss and damage" fund after weeks of negotiations and more than 36 hours after the annual climate meeting had been slated to end. The issue was described as the litmus test of a successful COP27 by developing nations and UN Secretary-General António Guterres, especially given the summit's location on the African continent, where people are most vulnerable to climate change yet have only contributed about 3% of global emissions.

"This COP has taken an important step towards justice," Guterres said. "But let's be clear. Our planet is still in the emergency room. We need to drastically reduce emissions now — and this is an issue this COP did not address. A fund for loss and damage is essential, but it's not an answer if the climate crisis washes a small island state off the map or turns an entire African country to desert."

Here's a rundown of the progress world leaders did — and didn't — make in Egypt:


Progress: A win for developing countries

Creating a fund to help vulnerable countries when disaster strikes marked a major breakthrough given that only a year ago the US and the European Union were opposed to the idea out of concern they'd be the hook for trillions in financial liabilities.

The Biden administration changed its position ahead of COP27 and supported putting the issue on the formal agenda and Europe was key in brokering the final deal with small island states.

The agreement follows a decades-long push by a coalition of developing nations known as the G77+ China. Pakistan, which led the group this year, became the poster child for the impacts of the climate crisis after monsoon rains and flooding last summer inundated one-third of the country, killed more than 1,700, and caused an estimated $30 billion in damage.

The specifics of what countries will pay still need to be hashed out over the next year, with John Kerry, the US climate envoy, calling on China to contribute. That country, despite being the world's largest polluter, is considered a developing country by international institutions and therefore isn't obligated to contribute to climate finance.


Over the course of the two weeks of COP27, Germany, Belgium, Austria, and Scotland committed at least $200 million combined for loss and damage.

Disappointment: Oil and gas prevails

An effort led by India to call for the phase out of fossil fuels stalled despite attracting more support than ever.

Mentioning "fossil fuels" in the agreement out of Sharm el-Sheikh would have gone a step further than The Glasgow Pact struck at last year's UN climate summit in Scotland, which only singled out "unabated coal" — coal that isn't paired with carbon-capture technology to control emissions. There was no mention of oil and gas, which is where things remained after COP27.

The outcome wasn't surprising, considering that during the talks in Egypt officials from oil-producing countries like Saudi Arabia and United Arab Emirates said they would continue supplying the world with the fuel for as long as needed. On top of that, the fossil-fuel industry had more representatives at the conference than any single nation, except the UAE, which is hosting next year's talks in Dubai. Leaders from some African countries are eager to supply oil and gas to Europe to fill a gap left by Russia after its invasion of Ukraine.


The deal did call for an increase in renewable energy and "low-emissions energy," although the latter raised some concern among climate advocates about it opening the door to more natural gas. Natural gas produces about half the emissions of coal when burned, but its main component is methane. The pollutant has 80 times the warming power during the first 20 years it's in the atmosphere though it doesn't last as long as carbon dioxide.

Renewable energy got one major boost from Indonesia, just not at COP27. At the Group of 20 summit in Bali, the world's third-largest coal producer pledged to peak emissions from its power sector by 2030 under a new $20 billion deal with the US, Japan, and other rich nations to boost clean energy.

Disappointment: The planet is still getting too hot

World leaders arrived in Sharm el-Sheikh with plans that put the world on track to warm by 2.4 degrees Celsius above preindustrial levels this century, according to the UN. That would blow past a 1.5-degree target under the Paris agreement, which climate scientists say could avoid the most devastating impacts.

During COP27, several countries, including Mexico and Egypt, set more aggressive targets to reduce emissions by 2030. It sounded promising when Turkey announced it would do the same, but Bloomberg reported that the plan actually allows the country to more than double carbon dioxide emissions compared with 2020 levels.


None of the promises are enough to keep global warming in check. If emissions remain at current levels during the next nine years, there is no chance of meeting the 1.5 degree goal, researchers found. The use of oil and cement drove an increase in emissions in 2022 over the previous year, mainly in the US and India.