The COP27 climate conference in Egypt ended Nov. 20 with a historic agreement to establish a "loss and damage" fund that will require the U.S. and other wealthy nations to help developing countries suffering the most from disasters in a warming world.

But the COP27 deal failed to commit to a phaseout of all fossil fuels, a provision that many nations sought. Instead, the agreement, known as the Sharm el-Sheikh Implementation Plan, repeated language from 2021's climate gathering in Glasgow, Scotland, which called for a "phasedown" of unabated coal plants and a transition toward "low-emission energy systems."

At that time, nations pledged to return the following year with more ambitious emissions reduction plans. Economic problems and the energy crisis following Russia's war against Ukraine have since overshadowed climate concerns for many nations.

"What we have in front of us is not enough of a step forward for people and planet," Frans Timmermans, the European Commission's climate envoy, told the COP27 closing plenary Nov. 20. "It does not bring enough added efforts from major emitters to increase and accelerate their emissions cuts. It does not bring a higher degree of confidence that we will achieve the commitments made under the Paris Agreement and in Glasgow last year."

Even so, the EU was not prepared to walk away from an agreement that finally addressed the needs of nations such as flood-ravaged Pakistan, Timmermans said.

In the early 1990s, island nations began to seek compensation for rising sea levels and other climate impacts for which they are not responsible. Since then, a group known as the Vulnerable 20 has grown to include nations suffering from drought, food shortages and other climate challenges threatening their economies and futures.

A 2022 Vulnerable 20 report estimated that at-risk countries lost $525 billion in wealth between 2000 and 2019 due to climate change.

'Much-needed political signal'

The final document approved early Nov. 20 in the Red Sea resort town of Sharm el-Sheikh did not include details on who pays into the new loss and damage fund or what nations will be eligible for assistance; that will be worked out in 2023.

Governments agreed to establish a "transitional committee" that will make recommendations on the new fund at the 2023 climate summit, which will be held in the United Arab Emirates. The committee will hold its first meeting during the first quarter of 2023, United Nations Climate Change said in a statement.

Among the sticking points will be whether all developing nations or just a select few will receive money. The U.N. still considers China and India, two of the world's largest greenhouse gas emitters, as developing economies.

Political realities also must be contended with. The U.S., for example, would need congressional approval to contribute to the loss and damage fund, which could prove harder with a divided Congress. The U.S. and EU had for years resisted efforts to establish such a fund over concerns they could be held liable for climate disasters.

"This COP has taken an important step toward justice," U.N. Secretary-General António Guterres said in a video statement. "Clearly, this will not be not enough, but it is a much-needed political signal to rebuild a broken trust."

In general, expectations for COP27 were muted, and two weeks of negotiations delivered only modest results in several other key areas. Efforts to finalize a rulebook for international carbon credit markets, for example, were punted to 2023's summit amid controversy over potential greenwashing.

In preparation for the 2023 summit, nations must next take stock of their emissions reduction pledges under the Paris Agreement on climate change. A recent U.N. analysis found that under current plans, countries are on track for a 2.5 degrees C warmer world by 2100, vastly overshooting the 1.5 degrees threshold for averting catastrophic climate change.

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