Does Pakistan know how to benefit from COP27 fund?

Pakistan chaired the largest and most influential negotiating block of G-77 and China, and successfully steered negotiations, leading to a landmark agreement on the ‘Loss and Damage Fund’ to support poorer countries being ravaged by climate change. This milestone helps overcome decades of resistance from rich nations contributing a bulk of the world’s carbon emissions.

The UN Secretary General, Antonio Guterres said that “this COP had taken a step towards justice in establishing the much needed ‘Loss and Damage Fund’ that I very warmly welcome.”

Ahead of action on the texts, COP27 President Sameh Shoukry, who is also the Foreign Minister of Egypt, told delegations that the draft decisions were “a gateway that will scale up implementation and will enable us to transform to a future of climate neutrality and climate-resilient development.”

“I call upon all of you to view these draft decisions not merely as words on paper but as a collective message to the world that we have heeded the call of our leaders and of current and future generations to set the right pace and direction for the implementation of the Paris Agreement and the achievement of its goals,” he added.

In his closing remarks, the United Nations Framework Convention on Climate Change (UNFCC) Executive Secretary, Simon Stiell remarked that “we have determined a way forward and have agreed on funding for loss and damage.”

Among other positive steps, he noted that in the text adopted, “we have been given reassurances that there is no room for backsliding, signalling that the key political commitments for the phase-down of all fossil fuels is happening.”

The UN also announced the Executive Action Plan for the early warnings for all initiatives, calling for an initial targeted investment of $3.1 billion (equivalent to a cost of just 50 cents per person per year) during the period between 2023-2027.

Former US Vice President and Climate Activist, Al Gore has supported a new independent inventory of greenhouse emissions created by the Climate Trace Coalition. The tool combines satellite data and artificial intelligence to show the facility-level emissions of over 70,000 sites around the world, including companies in China, the United States and India. This will allow leaders to identify the location and scope of carbon and methane emissions being released into the atmosphere.

Other highlights announced by the host country presidency was the master plan to accelerate the decarbonisation of five major sectors; power, road transport, steel, hydrogen and agriculture, along with the Food and Agriculture for Sustainability Transformation (FAST) initiatives to improve the quantity and quality of climate finance contribution to such transformation by 2030.

Other initiatives announced at COP27 include: the Sharm El-Sheik Adaptation Agenda, the Action on Water Adaptation and Resilience Initiative (AWARe), the African Carbon Market Initiative (ACMI), the Insurance Adaptation Acceleration Campaign, the Global Renewable Alliance and the First Movers Coalition (FMC) Cement and Concrete Commitment.

The issue of loss and damage has gained momentum in recent years aimed at compensating the poor and developing countries for the climate triggered losses mostly caused by the human induced global warming activities of the developed countries.

The COP-19 held at Warsaw, Poland in November 2013, established the International Loss and Damage Executive Committee to devise the mechanism for loss and damage, which was reiterated by the developing countries at COP-27.

Although it is too early to pose questions like where the fund will be located and who will control it, who will pay for it, and its disbursement procedure, yet like any other international funding mechanism, it will be very difficult for a developing country like Pakistan, with very weak capacity and resources, to access these funds.

Pakistan, with an insignificant contribution to global warming, is already witnessing a severe impact of climate change in the form of unprecedented rainfall and flooding. According to the World Bank, the disaster caused total financial losses amounting to $40 billion, affected 33 million people across the country and left 1,714 people dead. In addition, the reconstruction and rehabilitation cost may run in the billions.

These disastrous floods indicate Pakistan’s vulnerability to climate triggered disasters. So, while Pakistan is eligible for the loss and damage fund, like the Clean Development Mechanism (CDM) that Pakistan failed to benefit from during the past two decades, accessing the new fund resources will also be incredibly challenging.

So far, Pakistan has availed very limited access to international climate finance, which includes only one project from the Adaptation Fund, three from the Green Climate Fund (totalling $122 million) and 19 projects approved by the Global Environment Facility. The Climate Investment Funds (CIFs), major bilateral climate funds, are yet to be appropriately accessed. In addition, Pakistan has received support to explore options for carbon pricing and may be exploring a “debt-for-nature” swap.

Of the 48 projects pitched by Pakistan in the last 20 years, so far only 14 of them have been successfully registered with the Clean Development Mechanism (CDM) of UNFCCC. Those are being awarded with carbon credits. The remaining 34 are still in the process of evaluation and registration with UNFCCC.

This very limited access to the international financing mechanism is mostly because of limited capacity, lack of technical expertise and a failure to submit quality proposals that allow the country to benefit from the available climate and other green-financing mechanisms.

To secure any benefit from the loss and damage fund, Pakistan will have to build a strong and dedicated team of eminent, trained professionals. The team must study the eligibility criteria, assess the required resources and technology with a focus of benefitting from the proposed climate fund.

the writer has served at provincial, federal and international organisations, as an environmental consultant

Published in The Express Tribune, November 28^th, 2022.

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