US Eyes Shift to Climate Payments, in Potential Breakout on Top


SHARM EL-SHEIKH, Egypt — The fight to reach a new global agreement on climate change took a major turn as the United States opened up to making payments to countries suffering irreversible damage from global warming , negotiators at the UN summit here told POLITICO.

The US helped draft a proposal calling for such payments to be made to developing countries, British and European officials said late Friday as text of a possible deal was circulated to reporters in this Red Sea city. Negotiations in the nearly two-week summit will continue on Saturday, a day after the original TBEN.

Many details of the plan have yet to be worked out, including the exact mix of public and private funding that could go into a pot of money intended to help countries cope with the losses inflicted by climate change.

The proposal still fails to satisfy critics from developing countries who say the US continues to shirk its responsibility for all the greenhouse gases it has pumped into the atmosphere since the 19th century. Another potential sticking point is the US demand that China – now the world’s biggest carbon emitter – be one of the countries pulling their pockets.

Still, the idea that the US would even consider supporting the creation of a climate damage fund is a potentially seismic shift in their thinking after 30 years of resistance to the concept. It could also spark fierce criticism at home, where Republicans hostile to President Joe Biden’s climate agenda will take control of the House in January.

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A State Department spokesman said late on Friday that delegates at the summit continued to negotiate, but did not confirm that the draft text was a US proposal.

However, a British official told POLITICO that officials from the US, Canada, New Zealand and Australia co-wrote the text after being convened by Alok Sharma, a British MP who led the UN climate talks in Glasgow, Scotland, last year.

The draft in circulation, which has not yet been formally presented to Egypt’s presidency of the summit, would expand the sources and methods of financing disaster-stricken communities. It calls for a two-year process that would culminate in the creation of “a fund that is effective and attracts contributions from a wide variety of parties and sources, both public and private.”

The document also says a task force should be created to design the fund and tasked with “expanding funding sources,” in a nod to US concerns about China paying.

The US, historically the largest contributor to climate change, has raised concerns that a fund would open it to legal action for damages caused by fossil fuel emissions dating back to the start of the industrial revolution. The text contains an explicit clause exempting donor countries from “liability and compensation”.

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Many of the provisions of the proposal address US concerns about relying solely on government money to fill the fund. US special climate envoy John Kerry – who has been conducting phone calls from isolation after dealing with Covid-19 – has said it would be politically difficult to get that funding through Congress.

The draft calls for “Enhancing the responsiveness” of bilateral, multilateral and international financial institutions, which refers to development banks such as the World Bank, of which the US is the largest shareholder. It also calls on the World Bank and the International Monetary Fund to “contribute to financing arrangements … to respond to loss and damage.”

Kerry has argued that multilateral development banks should put more money into renewable energy and efforts to adapt to droughts, rising seas and other impacts of climate change in developing countries. He called on them this week to have a plan by April to review their climate strategy.

The document also calls for the use of “debt deferrals” by multilateral lenders in the wake of climate disasters hitting highly indebted countries, an idea championed earlier at the two-week conference by Barbados Prime Minister Mia Mottley and supported by the French president Emmanuel Macron.

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The draft falls short of a demand made on Tuesday by a bloc of 134 developing countries, including China, who called for a fund to be established during talks in Egypt rather than at a later date. That fund would be designed by a working group in which the balance of power would be in the hands of the poorer countries who would be the recipients. The EU rejected that proposal in order to dissuade China from paying for it.

The EU then made a counter-proposal to immediately create a new fund, but with only “the most vulnerable countries” as recipients. It also made the fund contingent on global greenhouse gas emissions peaking before 2025 and would expand its donor base beyond the richest industrialized countries — both issues that challenge long-standing red lines for China.

A climate activist at the talks, Harjeet Singh of the Climate Action Network International, derided the text leaked Friday as “a further watered down version of what the European Union previously presented”.

“Instead of establishing a new fund at COP27 as demanded by developing countries, it merely provides a vague process for delaying the decision,” said Singh, the group’s head of global political strategy. “Such a proposal undermines the urgency of action needed to respond to the needs of people facing a climate emergency.”


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