Global Shield: what is the new G7-funded climate compensation fund?

Pakistan, Ghana and Bangladesh will be among the first recipients of funding for countries suffering climate disasters

A man wears a face mask that reads "no climate justice without human rights" during a protest at the COP27 UN Climate Summit in Sharm El Sheikh, Egypt. AP

A presentation at the American University in Cairo Pavilion. Reuters

Egyptian artist Bahia Sheha stands inside her installation "Heaven & Hell in the Anthropocene." AFP

Akihiro Nishimura, minister of the environment of Japan, reviews notes with others at the COP27. AP

US Special Presidential Envoy for Climate John Kerry, right, and Xie Zhenhua, China's special envoy for climate greet each other at the COP27 UN Climate Summit in Sharm el-Sheikh, Egypt. AP

Brazilian president-elect Luiz Inacio Lula da Silva poses for a group photograph with representatives of his country's indigenous people. AFP

People attend the COP27 UN Climate Summit in Sharm El-Sheikh. EPA

Activists dancing during a discussion on leaflets at the Cop27 climate conference, taking place in Sharm El Sheikh, Egypt. AFP

An activist wears a polar bear outfit as part of campaigning. AFP

From left, Rakia Amandou of Niger, Ba Aminata of Burkina Faso, Kenyan Rosemary Nenini, Fatima Mustafa Ahmed from Sudan and Djeneb Dicko from Burkina Faso at the Indigenous Peoples Pavilion. AP

Abdulla Nasser Musallam Al Rahbi, Oman's Ambassador to Egypt and Permanent Representative to the Arab League, speaks at the COP27 climate conference in Egypt's Red Sea resort city of Sharm el-Sheikh. AFP

Climate activists demonstrate in the designated protest zone. AP

Sheikh Abdullah, Director General of Environment at the Public Authority of Kuwait, speaks at Cop27. AFP

Visitors at the Sharm El Sheikh International Convention Centre. AFP

A display outside the convention centre. AFP

A fountain in the green zone at the International Convention Centre at sunset. AFP

Mohamed bin Daina, right, Bahrain's Special Envoy for Climate Affairs and Chief Executive at the Supreme Council for Environment, at the conference. AFP

Members of Extinction Rebellion stage a protest at the Glencairn tidal pool outside Cape Town, South Africa to mark Cop27's 'Water Day'. AP

From left, Fahad Al Maskari of the Khalifa University, Frank Hartmann, Ghaleb Al Breiki of the UAE University, and Mouna Maroun of the University of Haifa, sign an agreement at Cop27. AFP

John Kerry, US special presidential envoy for climate, at Cop27 in Sharm El Sheikh, Egypt. AP Photo

Australian climate activists offer bananas to climate summit participants. AFP

Climate activist Sabrina Elba. AP Photo

Egyptian security forces stand guard during the protest. AFP

US President Joe Biden. AFP

Mr Biden with Egyptian President Abdel Fattah El Sisi. AP

A Cop27 sign in Sharm El Sheikh, Egypt, provides the backdrop for this woman's selfie. Reuters

Egypt's President Abdel Fattah El Sisi speaks to US House Speaker Nancy Pelosi at the climate summit. AFP

A water wonderland greets this child at an acquarium in the Cop27 Green Zone. Reuters

Mr El Sisi, second left, takes part in a cycling marathon on the sidelines of Cop27. EPA

Rafael Grossi, director of the International Atomic Energy Agency, speaks in Sharm El Sheikh about 'complicated' talks to set up a protection zone around Ukraine's Zaporizhzhia nuclear plant. AFP

Frankie the dinosaur. Reuters

US House Speaker Nancy Pelosi. Reuters

Sheikha Shamma bint Sultan, CEO of the Alliances for Global Sustainability; Mariam Al Mheiri, Minister of Climate Change and Environment and Minister of State for Food Security; and Hatem Dowidar, group CEO at e&. AFP

Sameh Shoukry, Cop27 president, centre left, poses for photos in the youth pavilion. AP

A visitor looks at the 'Zero Point' series of collage portraits by Turkish artist Deniz Sagdic, each of which is made from a particular kind of upcycled waste material. Getty

Participants visit the Ukrainian pavillon. AFP

Mr Kerry speaks during a session on accelerating the clean energy transition in developing countries. AP

Youth climate activists. Pictured, from the left, Eric Njuguna of Kenya, Nicole Becker of Argentina, Vanessa Nakate of Uganda, Sophia Kianni from Iran, and Mitzi Jonelle Tan of the Philippines. AP

Muhammad Sulaiman Al Jasser, right, chairman of the Islamic Development Bank Group, poses for a photo with Mohamed Hadi Al Hussaini, the UAE's Minister of State for Financial Affairs. AFP

Kristalina Georgieva, managing director of the International Monetary Fund. Bloomberg

A police officer stands at the entrance of the Sharm El Sheikh International Convention Centre during Cop27. Reuters

United Nations Secretary General Antonio Guterres. AP Photo

Former US vice president Al Gore speaks during a session at Cop27. AP Photo

Demonstrators shout slogans during a protest. AFP

Latest news from Cop27 here

As the Cop27 global climate conference began its second week in Sharm El Sheikh on Monday, a new funding initiative to help poorer nations handle the effects of climate change was launched by G7 nations.

Called Global Shield, the new mechanism is backed by the V20 group of climate-vulnerable nations and will initially receive more than €200 million ($206m) in funding, mostly from Germany.

At Cop27, the issue of loss and damage was listed on the agenda for the first time ever at a UN climate conference.

Climate-vulnerable countries say wealthy industrialised nations should help to pay for irreversible damage from floods, storms and rising seas, after decades of emissions caused global temperatures to rise.

What is the Global Shield fund?

The Global Shield, co-ordinated by G7 president Germany, aims to provide climate-vulnerable countries with rapid access to insurance and disaster protection funding after floods or drought.

It is being developed in collaboration with 58 climate-vulnerable economies to bring together climate risk finance and preparedness.

The fund will both help nations prepare for climate change and respond to natural disasters sparked by rising temperatures.

"Climate-related disasters have devastating impacts on poor people in particular," said Svenja Schulze, Germany's Minister for Economic Cooperation and Development.

"They often do not have the means to protect themselves and their homes, fields or businesses against extreme weather and can lose their entire possessions when a disaster strikes."

She stressed that the scheme was not "a tactic" to sidestep calls for a specific loss and damage funding mechanism.

"The Global Shield isn't the one and only solution for loss and damage, certainly not," she said, adding that more funding will be needed to cover more countries.

"Those most affected by climate impacts need practical action now."

Who will pay for the fund?

Germany announced a contribution of €170m to the initiative at Cop27.

Ireland's Taoiseach Micheal Martin also committed €10 million, telling the gathered diplomats and world leaders that what were "once exceptional events are now occurring with increased frequency and ferocity. People in the poorest parts of our planet are being driven from regions that can no longer support and sustain them”.

France stumped up an initial $20 million, saying its total commitment would be $60 million over three years. Canada and Denmark will contribute $7 million and $4.7 million respectively.

US President Joe Biden has also backed the plan.

As the conference continues, Germany will be hoping for more contributions, but some are sceptical.

EU negotiator Jacob Werksman said talks were not ready to agree on a single funding solution, but he hoped the Cop27 summit would achieve more than just scheduling further talks on climate compensation.

"We don't think that this process is ready to agree in principle that a new fund or facility is the right or the only way forward," he said.

Who will benefit from it?

A statement issued by Germany on Monday listed Bangladesh, Costa Rica, Fiji, Ghana, Pakistan, the Philippines and Senegal as some of the initial recipients of Global Shield packages, although 58 nations are in talks over the programme.

Those packages would be developed in the coming months, Germany said.

Ghana’s Finance Minister Ken Ofori-Atta called it “a path-breaking effort” that would help protect communities when lives and livelihoods are lost.

But civil society groups were sceptical, warning that the programme should not be used as a way to distract from the much broader effort to get big polluters to pay for the loss and damage they have already caused with their greenhouse gases.

Poorer, vulnerable nations also want financing to help them shift to clean energy and for projects to adapt to global warming.

Teresa Anderson of ActionAid International said the scheme showed that the global community recognised the need to act on loss and damage, but said it was a "distraction" from negotiations on a dedicated funding mechanism for climate damages.

"Everyone knows that insurance companies, by their very nature, are either reluctant to provide coverage, or reluctant to pay out," she said. "But when it comes to loss and damage, this is a matter of life and death."