At the annual United Nations climate change conference COP27 in Sharm El-Sheikh, Egypt last week, countries has agreed to establish a "loss and damage" fund in compensation for developing countries.
The details are still to be worked out on who would contribute to the fund and who would benefit.
Nevertheless, the "Loss and damage" refers to the costs of impacts caused by human-induced climate change, taking into consideration climate disasters like hurricanes, extreme weather events, rising sea levels and rising temperatures.
In short, it is a fund to assist poorer countries impacted by climate change, overcoming decades of opposition from rich nations that contribute the majority of the world's emissions.
It sounds fair since most poor countries can consider themselves the victims of the 'progress' in the rich lands. At least, this is the philosophy behind the idea to launch such a fund at a global level.
It is both a historic moment for the globe and a solemn moment of realisation by the rich nations of the imbalances in their push for a completely green world by 2050.
Now the poor nations can get some reparations from developed countries and we can argue whether developed countries are historically responsible for climate change or not. But the fund is now in existence.
Compensation for the most vulnerable countries
Pakistan's climate minister, Sherry Rehman, who was part of the developing-country campaign to secure the commitment at the two-week UN COP27 summit in the Egyptian resort city of Sharm el-Sheikh, hailed the historic decision as a "downpayment on climate justice."
At the COP27 summit, the EU and the United States put up stiff resistance against the idea, fearing that it would open them up to possible legal liabilities, as usual, their money is more important than the life of poor people it seems.
On the final day of the conference, the EU proposed that it would only contribute to the fund if "the donor base was broadened" and pushed for wealthier nations to be excluded from the list of countries eligible.
So far, climate funding has primarily focused on reducing carbon dioxide emissions in an effort to slow global warming, with roughly one-third of it going to projects that help communities adapt to future impacts.
"Loss and damage" funding is distinct in that it covers the costs of damage that countries cannot avoid or adapt to.
However, there is no consensus on what constitutes "loss and damage" caused by climate change, which could include damaged infrastructure and property as well as more difficult-to-value natural ecosystems or cultural assets.