(Bloomberg) -- Diplomats from 40 countries meeting in Germany for a two-day summit made some progress in negotiating over how wealthy nations should compensate developing countries for the losses and damage caused by climate change. 

“We, as industrialized economies, have to live up to our responsibilities and promises that we made in Paris,” said German Foreign Affairs Minister Annalena Baerbock in a speech as the talks started. “Industrialized countries have a special responsibility as big emitters.” 

Led by Germany’s and Egypt’s foreign ministries, the annual Petersberg Climate Dialogue in Berlin followed a similar gathering in the German city of Bonn that took place a month ago. These smaller meetings throughout the year allow climate diplomats to work on the technical details that could lead to bigger deals signed at United Nations-sponsored Conference of Parties, or COP, talks. This year’s COP is due to take place in November in Sharm el-Sheikh, Egypt. 

During the Bonn meeting in June, developed nations refused to put the issue of compensation on the official agenda for COP27 in Sharm el-Sheikh, outraging delegates from developing nations as well as climate activists. 

The contentious question of how rich countries should compensate poorer ones is known in climate policy jargon as “loss and damage.” Wealthy nations have emitted the lion’s share of the greenhouse gases that are warming the planet, but developing nations are suffering the most from extreme events linked to global warming. 

The mood in Berlin was more relaxed than it was in Bonn. Country delegates talked about their views and experiences in small groups. That helped ease the tension, observers said, between rich countries — which think loss and damage should be applied through existing climate finance mechanisms — and developing ones, which want new mechanisms to be set up. 

“There’s still a lot to do until COP27,” said Carolina Cecilio, policy advisor on risk and resilience at Brussels nonprofit E3G. “But I think that because there was an open and honest exchange in small groups, they might be moving toward an acceptance that loss and damage has to become an agenda item of some sort.” 

A failure to address the issue at the highest level will mean a failure for the COP27 meeting, the first COP to take place in an African nation since 2011, said Mohamed Adow, director of energy and climate at the think tank Power Shift Africa. 

“I can’t see a path for success at COP27 without solidarity being extended to the most vulnerable,” he said. “There is no way we can leave Sharm el-Sheikh with a good outcome if that is not going to include assurances for the most vulnerable.”

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