The EU is open to creating a new funding stream to assist victims of climate disaster recover – as long as China contributes.
On probably the most contentious issues at Cop27 in Sharm el-Sheikh, EU climate chief Frans Timmermans hinted at room for compromise.
“We desire to be bridge builders. We're open for this facility, but under certain conditions, and we need to discuss this,” Timmermans told reporters on Wednesday.
A group of 134 developing countries, known as the G77, and China, is calling for agreement in Sharm el-Sheikh now to set up a loss and damage facility.
Rich countries should you prefer a “mosaic” of funding arrangements. The EU argues a facility is simply one choice to consider – and the decision should be made at next year’s summit.
Existing and new funding instruments, ranging from debt relief to a windfall tax on gas and oil profits, should form part of the solution, Brussels says. A number of these sit away from UN Global warming process.
Current v historic responsibility
In any case, Timmermans said the pool of contributors should be broader than the list of countries defined by UN Climate Change as “developed” in the 1990s.
“I think everybody should be brought into the system based on where they're today. China is one of the biggest economies on earth with a lot of financial strength,” said Timmermans. “Why must they not be made co-responsible for funding loss and damage?”
Last week, the best minister of Antigua and Barbuda appeared to agree. “We all know that India and China… are major polluters and the polluters must pay,” Gaston Browne said. “I don't think that there are any free pass for any country.”
The island leader later clarified there needed to be a “differentiated assessment” that took into consideration historic emissions.
At a press conference last week, China's climate envoy Xie Zhenhua said Beijing made voluntary contributions through south-south cooperation and was not obliged to complete more.
Developing countries' position hasn't budged. Within detailed proposal published , the G77 requires a committee to work out the way the facility works for approval next year.
The EU's shift in position puts the spotlight on the US, which has so far rejected the proposal for a new fund. “That’s just not happening,” climate envoy John Kerry said on Saturday, citing concerns about liability for compensation. In other interviews, he took a softer tone, but remained vague about in which the landing ground may be.
Need for speed
One from the arguments against a facility could it be would take too long to obtain money flowing.
Developing countries have previously said the brand new fund could be modelled around the UN's flagship Green Climate Fund (GCF), that was established this year. It took five years for the first projects to become approved.
The EU argues existing and new financial instruments outside the UN climate process could deliver funding in the scale needed, faster.
On Wednesday, Timmermans announced the EU had allocated EUR60 million ($62m) for “loss and damage” from the Global Gateway programme. This could support an earlier warning initiative, climate and disaster risk finance and insurance mechanisms.
Other ideas incorporate a new trust underneath the World Bank, a funding window in the GCF, a windfall tax on oil and gas profits and reforms from the financial system.
The Alliance of Small Island States (Aosis) has to date been unimpressed with wealthy countries' alternative proposals. In a statement, the group said it was “gravely concerned” with the lack of progress around the issue.
Aosis chair and environment minister Molwyn Joseph, of Antigua and Barbuda, said some countries like the UK and Nz, had been “willing to engage”.
But “some developed countries are furiously attempting to stall progress and even worse, attempting to undermine small island developing states,” he explained.
Following ministerial consultations on Wednesday afternoon, one source close to the discussion told Climate Home that some developing countries may be prepared to pay a compromise, as long as it leads to a decision on funding arrangements at Cop28 the coming year.
