In reversal, U.S. won’t block climate compensation for poor nations
SHARM EL-SHEIKH, Egypt – The United States is willing to accept the creation of a fund to compensate poor, developing countries for climate damage, reversing decades of opposition and marking a major breakthrough in one of the most contentious issues at the heart of United Nations climate talks.
The United States is “working to sign on to a deal,” according to a Biden administration official who asked not to be identified because negotiations were ongoing. The change means the U.S. will no longer block a “loss and damage” fund that has long been sought by poor nations to help them cope with ongoing disasters such as storms, floods and drought that have been made more destructive by climate change.
The developing nations – largely from Asia, Africa, Latin America, and the Caribbean and South Pacific – see the matter as one of justice, noting they did little to contribute to a crisis that threatens their existence.
“A positive outcome is close,” said Sherry Rehman, Pakistan’s minister for climate change, who is spearheading a group of 134 nations pushing for such a fund. “Not perfect or optimal, but one that addresses the basic demand of developing nations.”
The United States had been the main obstacle to such a fund out of a concern that it could face potential liability as the country that has historically pumped the most greenhouse gases into the atmosphere. But American negotiators, under great pressure from developing countries as well as some of its European allies, reversed course late Saturday.
Tina Stege, the climate envoy for the Marshall Islands, called the breakthrough an “important moment.” “It has not been easy,” she said, referring to the decades that small island nations have spent arguing for a fund. “But, of course, we have a long night ahead, and we need all countries to agree,” she added. “We never celebrate until the gavel drops.”
By tradition, any agreement at U.N. climate talks requires the consent of every country; if one objects, talks can deadlock.
Even if negotiators from nearly 200 countries who are gathered in Egypt do agree in principle for funding on loss and damage, as the issue is known, huge hurdles remain. A draft agreement circulating at the summit would set up a committee to work over the next year to figure out exactly what form the fund should take, which countries should contribute and where the money should go.
The United States and the European Union are pushing for assurances that China would contribute to any fund created – and that the country would not be eligible to receive money from it. The United Nations currently classifies China as a “developing country,” which would make it eligible for climate compensation, even though it is now the world’s biggest emitter of greenhouse gases as well as the second-largest economy. China has fiercely resisted being treated as a developed nation in global climate talks.
There is also no guarantee that wealthy countries will deposit money in the fund. A decade ago, the United States, EU and other wealthy emitters pledged to mobilize $100 billion per year in climate finance by 2020 to help poorer countries shift to clean energy and adapt to future climate risks through measures such as building sea walls. They are still falling short by tens of billions of dollars annually.
Although American diplomats may agree to a fund, money must be appropriated by Congress. Last year, the Biden administration sought $2.5 billion in climate finance but secured just $1 billion, and that was when Democrats controlled both chambers. With Republicans, who largely oppose climate aid, set to take over the House in January, the prospects of Congress approving an entirely new pot of money for loss and damage appear dim.
For their part, several European nations have voluntarily pledged more than $300 million to address loss and damage, with most of that money going toward a new insurance program to help countries recover from disasters such as flooding. Poor countries have praised those early efforts while noting that they are only a fraction of what is needed.
“It’s worth noting that we have the fund, but we need money to make it worthwhile,” said Mohamed Adow, executive director of Power Shift Africa, a group that aims to mobilize climate action across the continent. “What we have is an empty bucket. Now we need to fill it so that support can flow to the most impacted people who are suffering right now at the hands of the climate crisis.”
There was a brewing dispute over what to call a new fund. Developing nations consider it compensation, and climate activists refer to it as reparations. But American diplomats were adamant that the money should be called “loss and damage resources.”
The fund being considered specifies that countries that have spewed greenhouse gas emissions into the atmosphere cannot be held legally liable for payments, an administration official said. But in actuality, the world’s largest polluters would be acknowledging, with a promise of payment, that the industrial growth that enriched them had harmed others.
For the United States, this year’s climate summit, known as COP27, has been a rude awakening. President Joe Biden and his climate envoy, John Kerry, arrived in Egypt touting the new landmark legislation that will invest $370 billion in clean energy and help America deeply slash emissions. Biden told the assembled ministers and diplomats that the United States wanted to lead the world in transitioning away from fossil fuels and toward a future where global warming would be constrained to relatively safe levels.
But once here, the Americans found themselves on the defensive as frustrated and angry leaders from developing countries insisted the United States do far more to help those outside its borders.
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“Our attitude toward the U.S. was always that it’s good news Biden is in the White House and not Trump, and it’s good news that they have a law for domestic action,” said Saleemul Huq, director of the International Centre for Climate Change and Development in Bangladesh, who advises some of the world’s poorest countries during U.N. climate talks. “But they don’t have good news when it comes to their international commitments on finance.”
The two-week summit, which was scheduled to end Friday, went into overtime Saturday as negotiators clashed over several thorny issues. The talks come at a time of multiple crises. Russia’s invasion of Ukraine has roiled global food supply and energy markets, stoked inflation and spurred some countries to burn more coal and other alternatives to Russian gas, threatening to undermine climate goals.
At the same time, rising global temperatures have intensified deadly floods in places such as Pakistan and Nigeria, as well as fueled record-breaking heat across Europe and Asia. In the Horn of Africa, a third year of severe drought has brought millions to the brink of famine.
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One area of concern at the talks is whether nations will strive to keep global temperatures from rising more than 1.5 degrees Celsius (2.7 degrees Fahrenheit) above preindustrial levels, a goal that nations emphasized at climate talks last year in Glasgow, Scotland. Beyond that threshold, scientists say, the risk of climate catastrophes increases significantly.
The planet has already warmed by an average of 1.1 degrees Celsius, and scientists have said that countries need to cut their carbon emissions more quickly and more significantly to keep warming to 1.5 degrees Celsius. The world is currently on a trajectory to warm by 2.1 to 2.9 degrees Celsius by the end of this century.
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Every fraction of a degree of additional warming could mean tens of millions more people worldwide exposed to life-threatening heat waves, water shortages and coastal flooding, scientists have found.
“One-point-five is not just a number that somebody invented,” Espen Barth Eide, Norway’s minister of climate and environment, told the conference Friday. He spoke about “the paramount difference, the dramatic difference between warming that ends at 1.5 and 2 degrees.”
“Entire countries that are present here will simply disappear from the surface of the planet. Most of all the ice on the world will melt,” he said. “Cities we love and live in will be gone. It’s such a drama in front of us that we simply have to make sure that we stick to what we were told to do in Glasgow.”
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Although the text circulated by Egypt on Saturday includes language that stresses the importance of limiting warming to 1.5 degrees Celsius, negotiators close to the process said Saudi Arabia was promoting language that glossed over the need for countries to set more ambitious goals for lowering emissions in line with that target.
Separately, India wanted language that would explicitly call for “phasing down” all fossil fuels – not just coal but oil and natural gas. But those words did not appear in the draft agreement Saturday, after opposition from Canada, China and Saudi Arabia, among other nations, according to people close to the negotiations.
Xie Zhenhua, lead negotiator for China, said that when it comes to calling for a phase-down of all fossil fuels, wealthy nations such as the United States should go first. “We should not add more burden to developing countries,” Xie said in a news conference.
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One of the biggest obstacles at this year’s talks, negotiators said, has been the chaotic management style of the Egyptian hosts, whose job it is to understand the concerns of each country and then broker a deal.
Diplomats complained that the Egyptian presidency held middle-of-the-night meetings and allowed delegates to see only snippets of potential text. Technical issues with sound delayed negotiating sessions. Lack of easy access to food and water also slowed progress; negotiators had to hunt for sandwiches and coffee in the sprawling venue.
“I’ve never experienced anything like this in 25 years,” said one longtime delegate, who asked not to be identified because talks were still ongoing. The delegate called the process “untransparent, chaotic, unpredictable.”
Alden Meyer, a senior associate at E3G, a European environmental think tank, who has attended all but one of the 27 U.N. climate summits, said, “No matter what happens, the Egyptians get a share of the blame for this process. The key is to engage parties early, to build trust, to identify landing zones. The Egyptians waited very late in the game to do any of that. They’ve essentially given parties a few days to try and work magic.”
“I’m not sure Houdini could’ve solved it,” said Meyer. “But let me know if you see Houdini walking around in the halls.”