Climate talks break down over finance, fossil fuels as time dwindles

SHARM EL-SHEIKH, Egypt – With time running out for nations to agree on a road map for tackling climate change, the fate of U.N. climate talks in Egypt appeared in jeopardy Thursday as rich and poor nations continued to disagree on an array of issues, including compensation for harms caused by a warming world.

The divide between these two factions at the U.N. Climate Change Conference, also known as COP27, could be seen in an inconclusive 20-page document released early Thursday morning by the Egyptian COP27 presidency. The document showed no consensus around the key issue of finance, particularly funding for irreversible loss and damage caused by rising temperatures.

Though negotiators by now had hoped to see a draft of the COP27 cover decision – setting clear goals for the meeting and resolving its thorniest debates – the document was more of a grab bag, listing almost every proposal countries have offered in recent days. The word “placeholder” appears in it 14 times.

The vague outline underscored the ironic nature of this year’s negotiations: The escalating damage from climate change has deepened divisions between wealthier and developing nations rather than galvanizing more aggressive action.

“There hasn’t been a real effort to bring this to a consensus,” said a European negotiator who spoke on the condition of anonymity because he wasn’t authorized to speak publicly. “It’s looking like a really quite challenging next couple of days.”

“Extra efforts need to be exerted by all parties to ensure that we reach agreement on this matter,” COP27 President Sameh Shoukry said at a news conference.

In a more promising move on Thursday, Chinese special climate envoy Xie Zhenhua joined a U.S. event on cutting emissions of methane – a sign of thawing relations after presidents Joe Biden and Xi Jinping met at the Group of 20 summit in Bali, Indonesia, this week. Though Beijing stopped short of agreeing to formally join a global pledge to reduce the potent greenhouse gas, it was the first time Xie and U.S. special climate envoy John F. Kerry have appeared together since climate talks between the world’s two biggest emitters broke down earlier this year.

The substance of Xie’s announcement wasn’t new, said Li Shuo, senior global policy adviser for Greenpeace East Asia. But the symbolism of the two diplomats cooperating was crucial for climate talks.

“It’s not like when John Kerry and Xie sit together, magic will happen,” he said. “But if the political conditions are so poor they cannot talk to each other, then we have even less reason to believe that the global community can actually tackle the climate challenge effectively.”

But with just 24 hours to go before talks in Egypt are slated to end, it’s not clear whether that amicable moment can defuse the tensions that have defined this climate conference, allowing countries to find compromise.

U.N. Secretary General António Guterres offered nations a stern reminder of the stakes as they wrangled over issues of payment and process.

“There has been clearly, as in past times, a breakdown in trust between North and South, and between developed and emerging economies,” he said. “This is no time for finger pointing. The blame game is a recipe for mutually assured destruction. I am here to appeal to all parties to rise to this moment and to the greatest challenge that humanity is facing.”

The draft published Thursday reiterates language from last year’s Glasgow Pact and the communique released yesterday by leaders of the world’s 20 largest economies. It highlights the need for urgent action to stop the world from heating beyond 1.5 degrees Celsius (2.7 degrees Fahrenheit) above preindustrial levels – which scientists say is necessary to avert the worst effects of climate change.

But it does not include new language proposed by India and generally backed by island nations, the United States and the European Union that would call for a phase-down of all fossil fuels – not just coal but also oil and gas. Nor does it mention an idea floated by the United States that global emissions should peak by 2025, a proposal that would challenge developing countries still trying to secure basic access to heat and electricity for their citizens.

The bullet points on financing loss and damage as well as reforms to help hard-hit countries manage crippling debt – the most contentious issues of the Egypt negotiations – are completely open-ended. The placeholder language offers no clues as to what might emerge from ongoing negotiations.

Yet the document also contains surprising new language that hadn’t previously been raised during negotiations. The most noteworthy was a call for developed countries to reach net negative greenhouse gas emissions by 2030 – something wealthy nations are certain to oppose.

In the case of China, the world’s most populous nation extracted a record amount of coal in the first eight months of 2022. To avoid power shortages and ensure energy security, the government plans to continue expanding coal mine output through 2025, one reason it has balked at joining the methane pledge and other pledges.

“Because the bulk of China’s methane comes from coal mines, which is very hard to reduce in the near term, meeting the terms of the global pledge would be too difficult,” said Dimitri de Boer, head of Asia programs for ClientEarth, an environmental charity.

The Intergovernmental Panel on Climate Change, the world’s leading scientific body on climate, has said that annual emissions must fall by about 45 percent by the end of the decade to keep the 1.5 degree warming target within reach. Most industrialized regions, including the United States and the E.U., have pledged to curb their emissions by slightly over half in that time frame.

“There’s still too many different competing visions,” Tom Evans, a policy advisory for the energy think tank E3G, said of the draft text. He feared the lack of consensus on key issues would lead to a long list of ideas being “whittled down” to a few insubstantial topics on which nations can easily agree.

Last year’s COP president, Alok Sharma, along with ministers from the E.U. and Canada, met with Shoukry, the COP27 president, on Thursday to highlight their worry about the number of major questions still remaining on the conference agenda.

Sharma urged Shoukry to consider the G-20 communique from leaders in Bali as “a floor, rather than a ceiling,” according to a spokesperson for the U.K., which hosted last year’s summit in Scotland, and told his Egyptian counterpart that “the last thing anyone wants is for this COP to end without consensus.”

The Sharm el-Sheikh meeting has been billed as “the implementation COP” – a conference that would hammer out the details needed to ensure the world follows through on past pledges. Most of the main sticking points come down to accountability and money: How will nations be required to show progress, and who will pay for the society-wide transformation that must occur.

But negotiations over the past two weeks have been sluggish, even by the typically slow pace of global climate talks. Decisions on multiple technical issues, including rules for a new carbon market operated by the United Nations, have already been pushed off until next year.

“We are participating, but clearly implementation in this COP remains elusive, remains a mirage,” said Zimbabwe’s Fortune Charumbira, president of the Pan-African Parliament.

Many in Egypt believe that finding a compromise on loss and damage is the key to achieving a substantive outcome at these negotiations. Developing countries, led by flood-battered Pakistan, have said they want the world to establish a new fund under the United Nations Framework Convention on Climate Change that disaster-struck nations can draw from in an emergency. But wealthy countries, especially the United States, are reluctant to agree to a new fund without knowing exactly how it will operate and where the money will come from.

Diplomats from Britain and New Zealand have been working with representatives of small island states to find a compromise, one that would buy more time to flesh out the details of a potential funding mechanism while still reassuring vulnerable countries that their needs will be met. One idea would be a working group or committee that would map out potential options and develop a proposal that all nations can agree on in the next year or two.

While negotiations sputtered on Thursday, diplomats from developing nations issued an emotional plea for more action as climate change exacts a growing toll on their people.

“We need to move from a purely expressive political commitment to a decision to establish a loss and damage fund. That is the minimum that can be accepted at this time,” said Molwyn Joseph, the lead negotiator from the Caribbean country of Antigua and Barbuda. “Anything less … is a betrayal.”

Sherry Rehman, Pakistan’s climate change minister, acknowledged the political obstacles facing the leaders being asked to pay for climate harms. Many wealthy nations are facing a cost-of-living crisis and an energy crunch amid the fallout from Russia’s invasion of Ukraine and the ongoing coronavirus pandemic. Officials from the United States and other countries have also warned that agreeing to a loss and damage fund might lead to legal liability for trillions of dollars in climate harms.

But Rehman said nations must find a way to work around those issues – otherwise humanity will never be able to collectively achieve its climate goals.

“We have to go forward with at the very least a political announcement of intent,” she said. “If this continues to be kicked down the road, we will see this as a justice-denied issue. Vulnerability should not be a death sentence.”

While diplomats haggled behind closed doors, a coalition of civil society groups took over one of the conference’s main meeting halls Thursday for a “People’s Plenary.” It was one of the most raucous acts of protest yet at COP27, which has been heavily criticized for limiting people’s ability to demonstrate outside of the United Nations-controlled venue.

Activists from Indigenous communities, youth groups and vulnerable nations blasted negotiators for failing to agree on funding loss and damage and a fossil fuel phase-down, and emphasized the need for even stronger commitments to prevent warming beyond 1.5 degrees Celsius.

“We believe climate justice can only be achieved if rich nations pay their climate debt,” Tasneem Essop, executive director of Climate Action Network International, told the assembled crowd. “We stand in defense of a 1.5 C guardrail, beyond which will be a death warrant for millions.”

As they streamed out of the plenary hall, activists hoisted a giant, silver, inflatable pipeline emblazoned with the words “PHASE OUT FOSSIL FUELS.”

They filled a grassy area of the conference venue, punching their fists in the air and shouting, “The people! United! Will never be defeated!”

But the divisions among negotiators have probably doomed the talks to stretch into overtime. Even if they work round-the-clock, many don’t expect the conference to end until late Saturday.