The annual UN climate negotiations concluded on Sunday in Sharm el-Sheikh, Egypt, running predictably into overtime, with a mixed outcome. Delegates celebrated the historic decision to create a mechanism by which developed countries will compensate developing countries for the havoc wreaked upon frontline communities by the climate crisis. Yet a call to phase out fossil fuels did not make it into a final draft. Given that it is the source of the emissions and the climate crisis, many scoffed at the hypocrisy of the results.

The Good News

The decision to create a facility or process by which nations in the Global North will compensate nations in the Global South for the impacts of the climate crisis will have major significance. These effects are known as “loss and damage” in UN parlance, referring to things that have been irretrievably lost, such as an entire season of crops, which Pakistan, which is still one-third under water, will experience, or damaged, such as flooded homes and businesses. The new facility is supposed to be running by 2023.

The establishment of a loss-and-damage facility is an important step for climate justice. It also represents a significant shift in the mindset, clearly announcing that the blame for the climate crisis rests with the countries that bear historical responsibility for producing emissions (and reaped financial benefits for doing so). And just as critically, it acknowledges that communities in the Global South are disproportionately experiencing the effects of these emissions. Vulnerable countries have been calling for the implementation of a loss and damage facility since the very beginning of the annual UN climate negotiations, that is, since the Rio Earth Summit in 1992.

The success of the loss-and-damage mechanism can be attributed to the decades of hard work of the Alliance of Small Island States (AOSIS), supported by the G77, the Least Developed Countries, the African Group, other nation clusters, and, of course, individual nations.

Molwyn Joseph, the minister of health, well-being, and the environment in Antigua and Barbuda, who chaired AOSIS this year, said, “Today, the international community has restored global faith in this critical process that is dedicated to ensuring no one is left behind.” But he added, “We must work even harder to hold firm to the 1.5C warming limit, to operationalize the loss and damage fund, and continue to create a world that is safe, fair, and equitable for all.”

The G77, which includes 134 developing nations, was led by Pakistan’s minister for the environment, Sherry Rehman. Pakistan was determined to implement the loss-and-damage fund, given the catastrophic climate events of this year. Floods inundated one-third of the country, impacted 33 million people, including 16 million children, unleashed US$30 billion of damages, and killed over 1,500. Meanwhile, Pakistan is responsible for less than 1 percent of global greenhouse gas emissions.

The efforts of negotiators inside were supported by the calls of civil society, which Kathy Jetnil-Kijiner, climate envoy for the Republic of the Marshall Islands, acknowledged in her remarks at the closing plenary. Protests abounded, with activists holding up signs demanding that developed countries “Pay Up For Loss and Damage.” Nakeeyat Dramani, a 10-year-old Ghanian activist, addressed the plenary on Saturday and asked the Global North to pay up, holding up a sign that read “Payment Overdue.”

As negotiations proceeded, many nations in the Global North slowed progress on loss and damage. The European Union offered a loss-and-damage facility, but with strings attached. Along with the United States, it stated that funds should come from a range of sources, including developed and developing nations. The major sticking point here is China, which the UN still classifies as a developing country, although it is currently the world’s largest emitter (and world’s second-largest economy). But arguing that China should provide funds mainly detracts from the US as historically the largest emitter and its responsibility to lead the way.

The EU also attempted to dictate that the funds be available only to the most vulnerable nations. Here, the EU’s concern was that countries listed as developing, but well-off financially, could benefit. Yet this position created concerns about who would define “vulnerable” and how “vulnerable” would be defined.

The EU also argued that the loss-and-damage fund should include insurance, which many worried would return the cost of the climate crisis to the frontline nations.

In the end, none of the EU’s concerns were incorporated into the final text coming out of COP 27, but the details about how the fund will work have yet to be figured out. A committee representing 24 nations will meet over the next year to discuss the fund’s form, who shall contribute, and who will receive the funds and how. They are to put forward proposals in advance of the spring 2023 meeting of the World Bank and International Monetary Fund (IMF).

So the fund exists but it is empty—in the case of the US, funding for it would have to be appropriated by Congress. As Mohamed Adow, representing Power Shift Africa, put it, “What we have is an empty bucket. We need to fill it so that support can flow to the most impacted people.”

Concern abounds about the fund, since developed countries promised over a decade ago in 2009 to deliver $100 billion to developing countries by 2020 for mitigation and adaptation. But that money never arrived.

One of the major reasons nations such as the US did not support the implementation of a loss-and-damage fund earlier is that it runs the risk of putting developed nations on the hook. One work-around is that the funds may come not from nations but from private foundations, something the US pushed for, and also through multinational banks. But these details, among others, about the sources and form of funding—whether an outright grant or a loan—have yet to be worked out.

Two other glimmers of good news: The new agreement makes a renewed commitment to keeping temperatures from rising above 1.5 C. And it reconfirms the science presented in the reports rolled out over the past year by the Intergovernmental Panel on Climate Change.

The Bad News

Unfortunately, even if the new agreement commits to holding temperatures to 1.5 C., actions have not been taken or outlined as to how to ensure 1.5. Specifically, COP 27 failed to call for a phaseout of fossil fuels. Perhaps that’s not surprising, given the strong presence of the fossil fuel industry at the conference—over 600 fossil fuel lobbyists attended, a 25 percent increase over last year—and the staunch opposition from fossil fuel nations, e.g. Saudi Arabia, Iran and Russia. In the closing plenary, Carmen Capriles of the Women and Gender Constituency said, “This COP is already loss and damaged and if you want to fix it, you could start by kicking out the polluters.”

The economic concerns of the host country, Egypt, may have played a role in the negotiations. The Russian war on Ukraine continues to impact Egypt’s economy; Russia and Ukraine were pivotal suppliers of wheat to Egypt, and they were also key contributors to Egypt’s tourism economy. The week before COP 27, Egypt had talks with the IMF and reached a $3 billion loan agreement. And the country has been deepening its connections with fossil-fuel producing nations. Climate scientist Simon Lewis observed, “When you look at why the COP 27 presidency are so staunchly not receptive to even contemplating the phase out of unabated oil and gas, it might relate to this: Saudi Arabia deposited US$5 billion in Egypt’s central bank” on Wednesday.

Activists and journalists also kept a spotlight on human rights violations in Egypt. Although the campaign to free Alaa Abd el-Fattah was not successful, global attention has been brought to his case: His sister Sanaa Seif appeared on countless press briefings inside COP 27, and appeared alongside activists wearing T-shirts emblazoned with “#FreeAlaa.” The pressure undoubtedly helped allow his family to see him in prison last week. Activists and journalists made the case repeatedly about how and why human rights and climate justice are interrelated, and the focus on that relationship is sure to continue to inform future COPs.

The final COP 27 agreement also calls for a “phasedown of unabated coal power.” Last year, at COP 26, India, in the 11th hour, demanded that “phaseout” of all fossil fuels be revised to a “phasedown.” This year’s agreement did not restore the demand to phase out fossil fuels; nor did it include oil and natural gas along with coal, which many delegates wanted to see. Canada, China and Saudi Arabia opposed their inclusion. The use of the term “unabated” also opens the door for carbon capture and storage, a technology that would capture carbon emitted by burning coal and store it underground. Carbon capture and storage is very expensive and has not been developed to scale, precisely because it is expensive. Thus, it is not considered effective for reducing emissions—and most importantly, it allows the use of coal to continue.

Additionally, the text calls for increasing “low emission and renewable energy.” While the inclusion of renewable energy was lauded, environmentalists expressed concern about the reference to “low emission,” which could be read as a reference to natural gas and which, although less polluting than coal, still produces harmful planet-warming emissions.

The text on the global fossil fuel phase down is basically a “copy and paste” of last year’s outcome. And there is no mention of what the science calls for: peaking of emissions by 2025 and halving it by 2030.

Alok Sharma, UK president of COP 26, summed up what was missing: “Peaking emissions by 2025. Not in this text. Follow-through on the phasedown of coal. Not in this text. The phasedown of all fossil fuels. Not in this text.”

Yeb Saño, executive director of Greenpeace for Southeast Asia, added, “If all fossil fuels are not rapidly phased out, no amount of money will be able to cover the cost of the resulting #LossAndDamage. It’s that simple. When your bathtub is overflowing you turn off the taps, you don’t wait a while and then go out and buy a bigger mop.”

Reflecting on the important of the loss-and-damage mechanism, Katie White, executive director of advocacy and campaigns at WWF, said, “While a deal on loss and damage finance is a positive step, it risks becoming a down payment on disaster unless emissions are urgently cut in line with the 1.5C goal. By refusing to phase out fossil fuels, governments have failed to reach a more ambitious agreement than in Glasgow last year and put our health and security at risk.”

Additionally, the agreement includes new carbon market rules that lack transparency and allow questionable accounting practices, creating loopholes for polluting countries and industries as they need to radically reduce greenhouse gas emissions.

That said, not all is doom and gloom. In addition to the historic agreement on loss and damage, the Beyond Coal and Gas Alliance, which was formed last year by Costa Rica and Denmark to phase out fossil fuels, continues to grow with new nations, such as Chile, Fiji, Kenya and Tuvalu, signing on. Brazil’s Lula da Silva returned Brazil to the UN climate negotiations. And Colombia called for finance for a Just Transition, which refers to a shift from fossil fuels to renewable energy while ensuring that the workforce, estimated to be at about 100,000 workers, can find new jobs.

Next year’s COP 28 will take place in Dubai in the United Arab Emirates from November 30 to December 12, 2023. Activists and journalists have already decried the location. The Gulf petro-state, which has deep ties to Egypt, sent over 1,000 delegates, the largest delegation, which included people in the fossil fuel industry, and hired US PR firms to greenwash the nation’s image. “Civil society should announce a boycott + instead hold a true people’s summit,” Naomi Klein responded. “One gathering per continent to limit flying. Links to the official summit by video.”

COP 28 will focus on the emissions reductions of member nations and include a strong push to include language to phase out all fossil fuels. Jetnil-Kijiner of the Marshall Islands, said, “I wish we got [the] fossil fuel phaseout. The current text is not enough. But we’ve shown with the loss-and-damage fund that we can do the impossible. So we know we can come back next year and get rid of fossil fuels once and for all.”