COP27 talks continue on proposed EU fund for climate loss and damage

Crucial climate talks have passed their deadline with no end in sight, as governments squabble over how to pay for rebuilding poor countries ravaged by climate breakdown.

There was turmoil in the negotiating rooms at the UN Cop27 summit in Egypt. Delegates rushed from room to room as countries raced to decide their response to an ultimate European Union proposal that would establish a new fund providing money to countries suffering from climate-related disasters, known as the name of loss and damage.

Such a fund was the main demand of developing countries during the two weeks of these negotiations. The EU offer was announced early in the day. Late Friday night, an informal text proposal supported by the EU, US, UK, Australia and New Zealand was circulated to delegates.

Seen by the Guardian, the proposal included a fund to be operational within two years and options for the creation of a commission which would examine whether it could work in concert with other existing financial institutions, such as the World Bank.

Groups of developing countries were discussing the proposal late into the night.

Frans Timmermans, vice-president of the European Commission, had previously said that EU member states would only provide money if “the donor base was broadened”.

This means expecting payments – and tougher greenhouse gas reduction targets – from countries such as China, the world’s largest emitter and second-largest economy, as well as large emitters with huge oil revenues such as Saudi Arabia and Russia, and potentially rapid industrialization. nations like South Korea and Singapore.

These countries have all been classified as “developing” since the signing in 1992 of the United Nations Framework Convention on Climate Change, the parent treaty of the Paris Agreement. This means they have been exempted from contributing climate finance for vulnerable people, and many have lax emission reduction targets.

But over the past 30 years, their emissions and economies have exploded. China’s cumulative emissions are now second only to those of the United States, while Russia, India, Indonesia and Brazil are also in the top 10.

The draft proposal calls for “a wide variety of parties and sources” to contribute money and to “broaden sources of funding”, but does not specify that large emerging economies such as China should contribute cash.

China did not respond to requests for an answer earlier on Friday. Last week, the country’s climate chief, Xie Zhenhua, said China was not required to pay for loss and damage in vulnerable countries.

“We strongly support the concerns of developing countries, especially the most vulnerable countries, to deal with loss and damage, because China is also a developing country and we have also suffered greatly from extreme weather events,” he said. he said, through an interpreter. “It is not China’s obligation to provide financial support under the UNFCCC.”

Some vulnerable nations warmly welcomed the EU proposal. Seve Paeniu, finance minister of the low-lying Pacific island nation of Tuvalu, said it was a “major breakthrough”. Vanuatu and Palau have taken similar positions. “For me, this is a major concession,” Paeniu said. “We hope this will be reflected in the text of the conference decision.”

Others gave a silent or ambivalent response to the EU proposal, even though they had called for the creation of a fund for loss and damage. Many poorer developing countries have traditionally sought to present a united front with China, which has offered investments to economies in Africa, Latin America and Southeast Asia.

Carla Barnett, Secretary General of the Caribbean Community group of countries, said: “There is only one option for small island developing states, a financing fund that paves a fair path for the future. of our countries. Divide and delay tactics will not work. This is an issue that we defend on the basis of justice.

Many more would not officially respond, but the Guardian understands that some are happy with the EU proposal but will not speak out for fear of angering their allies. Civil society activists and some countries have accused the EU of trying to create a divide in the developing world.

Mohamed Adow, director of think tank Power Shift Africa, said: “The fund should not be used as a poison pill to mend old divisions around broadening the donor base. [This] will not meet the needs of vulnerable countries.

A negotiator from the G77 plus China alliance told the Guardian: “This is a predictable attempt by the EU to break up the G77 in the talks. Of course, this is not a breakthrough. It’s completely hypocritical. »

Timmermans denied those allegations. “I do this for my children,” he said. “We cannot afford to fail. If our steps forward are not shared by others, there will be failure. I hope this can be avoided.

Meanwhile, John Kerry, Joe Biden’s special climate envoy, began isolating himself on Friday evening after testing positive for Covid. He had been closely engaged in the negotiations and although he will continue to negotiate over the phone, the news comes as a blow as talks between Kerry and his Chinese counterpart, Xie, were seen by some as a potential way out of the deal. ‘dead end.

A State Department spokesperson said, “Secretary Kerry is self-isolating after testing positive for Covid-19 in Sharm el-Sheikh. He is fully vaccinated and boosted and has mild symptoms. He is working with his negotiating team and his foreign counterparts over the phone to ensure the success of Cop27. »

In addition to the EU proposal, the frantic official final day of the fortnightly talks saw:

  • The final publication of the revised draft text for a “covering decision” of the conference of the parties, reduced from 20 pages in its original version to 10, and including commitments to increase funding to help developing countries adapt to the impacts of extreme weather.

  • Fears of countries trying to backtrack on the goal of limiting global temperature rise to 1.5C above pre-industrial levels. Some language in the draft text highlighted the Paris Agreement’s upper 2C limit, which scientists say would lead to dangerous levels of extreme weather and flood small islands.

  • India appears to have failed in its bid to have a commitment to phase out all fossil fuels included in the conference outcome, which was missing from the draft.

  • The Egyptian hosts were criticized amid concerns the talks were progressing too slowly, with the timetable for negotiations still unclear and a final point not yet in sight as the official 6 p.m. local time deadline for the end of the conference has passed.

  • Calls for World Bank reform feature in the draft text, much to the relief of many countries that have made it a key objective of the talks.

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