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Rich Countries Must Pay For Climate Damage


  • A historic agreement was reached at the conclusion of the United Nations Framework Convention on Climate Change (UNFCCC) Conference of Parties (COP27) in Sharm el-Sheik, Egypt.
  • The member countries have agreed to create a fund to assist developing countries that are especially vulnerable to the negative effects of climate change.


GS Paper3: Environment (Conservation-related issues)

Mains Question

Describe the major outcomes of the 26th session of the Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC). What are the commitments made by the India conference? (UPSC 2021)

Summary of Recent Events:

  • The 27th Conference of Parties was held in Sharm el-Sheik, Egypt, from November 6th to November 18th.
  • On the final day of the event, a decision was made to create a fund for what negotiators refer to as “loss and damage.”
  • This fund will be used to compensate poor countries that have been harmed by extreme weather caused by rich countries’ carbon pollution.
  • It is a significant victory for poorer countries, which have long advocated for funds that are sometimes viewed as reparations because they are frequently the victims of climate-related floods, droughts, heat waves, famines, and storms despite having contributed little to the pollution that is heating up the planet.

The Fund’s Background:

  • The fund would primarily benefit the most vulnerable countries, though middle-income countries severely impacted by climate disasters would be eligible for assistance.
  • The agreement states that the fund will initially be funded by contributions from developed countries as well as other private and public sources such as international financial institutions.
  • While major emerging economies such as China would not be required to contribute at first, the option remains open and will be negotiated in the coming years.
    • The European Union and the United States argue that China and other large polluters currently classified as developing countries have the financial clout and responsibility to pay their fair share.

Will India contribute to or benefit from the fund?

  • The rich countries had requested that the loss and damage fund’s donor base be expanded by including major economies such as India and China as contributors to the fund.
  • However, during the discussions, India made it clear that, while the country has voluntarily contributed to vulnerable countries through various mechanisms, it will not be required to contribute to the proposed fund.
  • In response to the question of whether India would be one of the fund’s beneficiaries, given that it is primarily intended for the most vulnerable countries, India argued that the country, too, has many vulnerable areas.
  • Conclusion:
  • By 2023, the decision on the donor base and beneficiaries will be made clear.
  • At the COP27, the parties also agreed to keep the COP26 mitigation points – “phase down” of unabated coal power and “phase out” of inefficient fossil fuel subsidies – in place.
    • In 2021, COP26 was held in Glasgow, Scotland.
  • The COP27 also established a four-year work programme on climate action in agriculture and food security, as well as a just energy transition.

June 2024