Sharm el-Sheikh - Negotiators at the COP27 global climate conference in Egypt on Sunday agreed to create a long-sought fund to compensate countries most vulnerable to the worst effects of climate change, as the two-week event wrapped up.

However, the UN-led talks faced a barrage of criticism for failing to agree on new milestones on the reduction of climate-damaging fossil fuels, as part of efforts to limit global temperature increases to 1.5 degrees Celsius above pre-industrial times.

The payment of reparations to poorer countries for damage caused by climate change was one of the thorniest issues at the two-week conference.

The loss and damage agreement is seen as a big win for low-income countries that often bear the impacts of climate change, although they have contributed the least to causing it.

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Pakistan's Climate Minister Sherry Rehman, whose country has been ravaged by flooding, said the fund was "a down payment in the investment in our joint future."

The approval of the funding came at a final plenary session and drew applause from delegates.

No sums were agreed on, however, nor who should pay in. These issues are to be settled at a later date – or that, at least, is the hope.

As far as the US is concerned, that later date may never come. Having been the main obstacle to a loss and damage deal in the first place, it will now have to take the request for funding to Congress, where Republicans are about to take control of the House and are likely to block any environmental efforts.

However, European Commission chief Ursula von der Leyen, one of the European Union's top officials, was critical of the outcome.

"COP27 has kept alive the goal of 1.5C. Unfortunately however, it has not delivered on a commitment by the world's major emitters to phase down fossil fuels, nor new commitments on climate mitigation," von der Leyen said in a statement.

"We have treated some of the symptoms but not cured the patient from its fever," she added.

Her top climate official, Frans Timmermans, told the final session of the COP27 that the outcome of their talks was "not enough of a step forward for people and the planet" and does not address the "yawning gap between climate science and our climate policies."

In the final declaration, nearly 200 countries reaffirmed an earlier decision to phase out coal, a climate-harming fossil fuel. However, no mention was made of oil and gas in the document.

The omission comes despite calls from several countries and pro-environment activists to phase out the use of all fossil fuels that produce large amounts of heat-trapping carbon dioxide.

The use of fossil fuels was a bone of contention at the two-week conference, and activists expressed disappointment at the failure to set new phase-out goals.