As the two-week-long UN climate summit COP27 kicked off in Sharm-El-Sheikh, Egypt, on Sunday, climate experts and small and developing countries celebrated an early victory. After 27 years of UN-led climate negotiations and 30 years of activist campaigns, the issue of compensation for victims of the climate crisis has made it onto the agenda for the very first time this year.

The issue of compensation is known as “loss and damage,” which refers to the loss and damage of cultures, of livelihoods, of properties and of lives due to the human-induced climate crisis. This year has seen many such tragedies occur across the globe, from the flooding that has devastated Pakistan and Nigeria, droughts in the Horn of Africa and cyclones in the Caribbean.

The people who suffer the very worst impacts of loss and damage live in regions that have historically low emissions and have contributed the least to causing climate change. As such, there’s a general consensus extending from climate justice activists all the way to governments that these people should be compensated for the losses and damages they’ve experienced.

But this consensus has only been reached in the past few months. Even at COP26 last year, smaller and developing countries pointed fingers at a group of wealthier countries, led by the US, for watering down language on loss and damage in the Glasgow Climate Pact.

The US is the largest historical emitter of greenhouse gases of any country in the world. It also holds significant power and sway on the international stage, meaning that its stance on issues such as loss and damage has the potential to impact people suffering the impacts of climate change everywhere.

As recently as September, John Kerry, President of Joe Biden’s climate envoy, said it was more important to focus on securing financing for adapting to the future impacts of the climate crisis rather than compensating victims. Several weeks later, he appeared to change his tune. According to AP, Kerry admitted that the US had a responsibility to step up on loss and damage. “We are working toward it, and we will in Sharm,” he said. “We will not be, you know, obstructing.”

Speaking at a Chatham House event in London last week, Kerry warned that the media shouldn’t come to COP27 pursuing the narrative that the US is resisting progress on loss and damage. But due to its strong negotiating position and past reticence, the media, and everyone else at COP27, will be watching the US closely to observe the strength of its commitment to this issue.

An urgent matter and a test for COP27

Countries around the world have felt the impact of the climate crisis in the form of extreme weather more than ever before this year. It’s creating an ever-growing deficit between the losses and damages suffered and the money available to compensate people. But every step toward establishing that funding is slow going.

Even getting loss and damage on the agenda for COP27 has been a struggle. On Saturday night, delegates stayed up until the early hours of the morning trying to establish an agreement on how loss and damage should be included on the summit’s agenda. Now that it has been agreed, the real work on loss and damage must begin.

“The fact that parties can come together and resolve whatever issues that were with regard to the agenda item… is very positive,” UNFCCC Chief Simon Stiell said during a press conference on Sunday. “The real test will be the quality of the discussion that takes place over the next two weeks.”

What happens during COP27 should hopefully lead to an agreement to set up a finance facility, with the details set to be worked out at COP28 next year, said Saleemul Huq, director of the International Center for Climate Change and Development. The agenda specifies that an agreement should be reached “no later than 2024,” but many fear this is far too late.

Fridays For Future MAPA activist Mitzi Jonelle Tan has been campaigning for loss and damage financing after witnessing the climate crisis wreaking havoc in her home country of the Philippines. She welcomed the inclusion of loss and damage as a “crucial step,” but warned against delays.

“It’s as if world leaders, especially from the Global North, still do not understand the urgency of the situation and are still trying to escape their responsibility,” she said. “We need a loss and damage finance facility now. These rich countries owe us climate reparations for the destruction they have caused our communities in the past, present, and future.”