(Bloomberg) -- At 4 a.m. on Sunday morning, climate negotiators in Egypt walked back from the abyss and struck an historic deal that resets the relationship between rich and poor countries.

Approved without a single opposing voice, the agreement to create a fund to help developing nations face the devastation of climate change is a precedent-setting moment that’s been three decades in the making.

Sherry Rehman, Pakistan’s climate minister, called the agreement the “ultimate test” of the COP27 climate summit, which was finally wrapped up after running well past its scheduled close on Friday. 

Read More: COP27 Approves Last-Ditch Deal for Historic Climate Damage Fund

“We have struggled for 30 years on this path and today, in Sharm El-Sheikh, this journey has achieved its first positive milestone,” she said. “The establishment of a fund is not about dispensing charity, it is clearly a down payment on the longer investment in our joint futures.”

Pakistan has become a symbol of the ravages of climate change, after torrential rains flooded a third of the country, left hundreds dead and caused some $30 billion in loss and damage. 

But the agreement to set up the fund is just the first step toward helping Pakistan and other vulnerable nations. 

Details of how the mechanism will work and how much rich countries will contribute are to be thrashed out over the next few months, and then taken up at the COP28 meeting in the United Arab Emirates next year. The final agreement redraws the old divide between poor and wealthy nations, leaving the door open for China and a number of oil-producing states to join the official ranks of rich countries that will become contributors to the fund.

Yet even with this landmark agreement in place, skepticism remains. Rich nations have a track record of not living up to their climate promises, so for now, “what we have is an empty bucket,” said Mohamed Adow, executive director at think tank Power Shift Africa. “We need money to make it worthwhile.” 

To many, getting the fund was a bitter victory. Efforts by the European Union, the UK and small island nations to secure stronger commitments on cutting greenhouse gas emissions failed. And attempts to have nations agree to peak global emissions by 2025, or a phase-down of all unabated fossil fuels, also fell flat. 

“Why are we celebrating loss and damage when we have failed on mitigation and adaptation?” said Aminath Shauna, environment minister for the Maldives, the world’s lowest-lying nation. “We are just a meter above sea level — I want my two-year-old daughter to live in the Maldives.”

Sameh Shoukry, Egypt’s foreign minister who presided over the COP27 talks, had adopted a hands-off approach for much of the summit’s two weeks. Delegates were forced to extend negotiations and make last-minute concessions to prevent the whole event ending in failure. 

“We were faced with a moral dilemma,” Timmermans said. “We had to give up some of the things we wanted to help this process and its parties to find a way forward.” 

Alok Sharma, Shoukry’s predecessor when COP26 was held in Scotland last year, complained that key points for which he’d fought were now either missing or watered down. 

“Emissions peaking before 2025 as the science tells us is necessary? Not in this text,” said Sharma, visibly angry as the session came to an end. “Clear follow through on the phase down of coal? Not in this text. Clear commitment to phase out all fossil fuels? Not in this text. The energy text? Weakened in the final minutes.”

This year’s final text includes language allowing a transition to “low-emission” sources, which is being interpreted as a loophole for natural gas, the lowest-emitting of fossil fuels. 

That’s amid widespread criticism that COP27 was shaped by the presence of fossil fuel industry representatives. At the same time, major hydrocarbon producers such as Saudi Arabia blocked language that would have called for a plan to phase out oil and gas. 

“The influence of the fossil-fuel industry was found across the board,” said Laurence Tubiana, chief executive officer at the European Climate Foundation and an architect of the landmark Paris Agreement. “The Egyptian Presidency has produced a text that clearly protects oil and gas petro-states and the fossil-fuel industries — this trend cannot continue in the United Arab Emirates next year.”

There’s now concern that COP28 will take a dangerously soft stance on fossil fuels, with its host, the UAE, being a major hydrocarbons producer and a member of the Organization of the Petroleum Exporting Countries.

In Sharm El-Sheikh, the US, the EU and the UK all saw their negotiating positions on emissions cuts challenged. They were also criticized for not walking the talk. 

“We’re watching Europe and the US expand fossil gas even as they’re lecturing other countries about what they should be doing,” said Rachel Cleetus, policy director with the climate and energy program at US nonprofit Union of Concerned Scientists. “What does it really mean to uphold 1.5C? It means stopping the expansion of fossil-fuel infrastructure.”

But 1.5C remains within reach, according to US presidential envoy for climate, John Kerry, who conveyed the assessment in writing after contracting Covid during the final hours of the talks. 

The US’s change of position -- from flat rejection of setting up a loss and damage fund prior to the summit, to agreeing to it -- was key to preventing the talks from falling apart. At the same time, the country’s embrace of language supporting a pledge to the phase down all fossil fuels gives the issue a fighting chance in the months ahead.

“Almost two years ago this very week, President-elect Biden asked me to be his special envoy for climate -- it was a perilous moment, the world was rushing toward climate chaos,” he said. “Make no mistake: we have kept the hope of 1.5 alive.”

In the end, it was a speech by 10-year-old climate activist, Ghana’s Nakeeyat Dramani, that made clear what’s at stake.

“There’s less than 86 months to go before we get to 1.5C and I’m already much older than that — have a heart and do the math,” Dramani said. “If all of you were young people, wouldn’t you have already agreed to do what’s needed to save our planet?”

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