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As COP27 nears deadline, Europe makes ‘final offer’ for climate deal

The E.U. financing proposal would require nations to commit to reducing emissions. Time is running out for the U.S., China and others to settle their differences.

Ghanaian climate activist Nakeeyat Dramani, 10, urged COP27 delegates on Nov. 18 to “have a heart and do the math” in order to cut emissions. (Video: Reuters)

SHARM EL-SHEIKH, Egypt — The European Union’s top climate negotiator on Friday pitched a plan to tie disaster funding to emissions reductions as a final offer to avoid failure in the dwindling hours of the world’s annual climate summit.

The new proposal at the U.N. Climate Change Conference in Egypt, known as COP27, puts pressure on the world’s two biggest emitters, China and the United States. China has resisted the idea of committing either to more emission cuts or to money for helping vulnerable countries cope with sea-level rise, deadly heat waves and other climate impacts.

The United States, for its part, fears being on the hook for disasters now unfolding.

Major uncertainties dogged the summit on what was supposed to be its last day. The State Department announced that the U.S. special envoy on climate, John F. Kerry, has covid, which will force him to abandon his intense, personal brand of diplomacy and defer in-person conversations to others in the U.S. delegation. The negotiations were originally set to end at 6 p.m. Friday in Egypt but will now extend into Saturday, and possibly longer.

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One of the most moving moments Friday came when 10-year-old Nakeeyat Dramani of Ghana spoke at a plenary after being invited by 58 nations most vulnerable to climate change. She thanked the gathering but then talked about what her world would be like if she were to reach Kerry’s age — 78.

“Some communities have been paying a heavy price since our planet was lit on fire by some of its people,” Nakeeyat said to a standing ovation. “It puts a simple question to these fire-starters: When can you pay us back? Payment is overdue.”

The young activist was referring to what is known as “loss and damage” financing — compensating developing nations for the harms they are experiencing from climate change. The issue continued to dominate discussions into the late hours Friday.

A draft proposal shared with The Washington Post detailed an apparent discussion among the United States, Britain, the European Union, Australia and New Zealand to resolve the impasse.

Earlier, diplomats got their first glimpse of an overarching “cover decision” from their Egyptian hosts — a document that reiterated the need for rapid emissions cuts to meet the world’s warming targets but did not deal with the contentious loss-and-damage issue.

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A previous draft proposal had laid out three possible resolutions for compensating developing countries. Nations could agree to establish a dedicated fund this year, continue negotiations with an eye toward setting up the fund at next year’s COP or commit only to “new and enhanced funding arrangements” without settling on a designated fund.

Ghanaian climate envoy Henry Kokofu, who represents the coalition of 58 vulnerable countries, said his group supports the first option, which is also backed by developing nations, small island states, and a group of Latin American and Caribbean countries.

But Kokofu said it is not enough for developed nations to agree to a fund — they must also commit to paying into it. “Without an actual commitment to funding, we may well just end up with an empty bank account,” he said.

Frans Timmermans, lead negotiator for the European Union, said the E.U. plan is as far as the bloc can go. He said it would concede to developing nations’ unequivocal demand for a designated fund to compensate them for the destruction caused by climate change and in return would require all countries to start reducing their planet-warming emissions by 2025.

“I have to say this is our final offer,” Timmermans told reporters Friday morning. “This is about not having a failure here. We cannot afford to have a failure.”

The E.U. compromise would put pressure on every major negotiating power at the summit. China and India would have to take new steps to curb escalating emissions that they have been reluctant to agree to. Hard-hit nations would get a fund but could face more years of negotiations over money to fill it. And language specifying that only “particularly vulnerable countries” could draw on the fund may fracture the negotiating bloc of more than 100 developing nations that helped push this issue onto the conference agenda.

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The United States spent years trying to block this type of funding for damages caused by climate change, partly fueled by emissions from industrialized nations.

But U.S. opposition has softened this year, and Timmermans said U.S. officials seemed interested in how the European financing proposal would require nations to commit to emissions reductions.

At a meeting of ministers Friday morning, U.S. and Japanese representatives said they would back the third, least-concrete option listed in the draft loss-and-damage proposal, which would commit them to “new funding arrangements” but not to a dedicated fund.

It is unclear whether China — the world’s largest annual emitter and the source of 13 percent of historical emissions, second behind the United States — will embrace the loss-and-damage deal. Under the original U.N. Framework Convention on Climate Change, agreed to in 1992, China is considered a developing nation and is not expected to provide financial support to countries in need. But the world is supposed to reassess which nations are in a position to supply funding as part of negotiations over how much climate finance is needed after 2025, raising the possibility that China may end up on the hook for loss-and-damage payments.

Asked whether China supports the E.U.’s proposal to establish a loss-and-damage fund for vulnerable and developing countries, a Chinese Foreign Ministry spokeswoman, Mao Ning, said Friday at a news briefing in Beijing that developed countries should “take the lead” to give developing countries “room to achieve sustainable development.”

At a news conference last week, Chinese climate envoy Xie Zhenhua said that China, as a developing country, has no obligation to participate in the fund, reiterating Beijing’s long-held position that it does not have the same responsibilities for climate action that rich nations do.

“What they don’t want is something that changes the precedent,” said Sam Geall, chief executive of China Dialogue and an associate fellow at the Chatham House think tank, speaking from the conference. “There’s no doubt that China has domestic commitments on climate change and a willingness to work on these topics … but it looks like climate progress is being held hostage by geopolitics,” he said.

China has historically been reluctant to contribute development financing through multilateral organizations, choosing instead to make such pledges on a bilateral basis. Xie last week said that China had already contributed to climate financing by committing 2 billion yuan (about $280 million) through various Chinese initiatives.

“It’s not that [China] doesn’t have the money or is unwilling to pay, they want to choose the channel that is most beneficial to them,” said Je-Liang Liou, director of the Center for Energy and Environmental Research in Taiwan, speaking from Sharm el-Sheikh. “Instead of donating money to a fund I can’t control, I might as well use it to make friends.”

When asked about China’s position, German Foreign Minister Annalena Baerbock said her country supported a finance system that “includes the biggest emitters” and maintains an incentive for nations to also curb their emissions.

Without mentioning China by name, she said: “Some countries would like to continue to play by their own rules. They do not want to talk to one another, or talk to others behind closed doors.”

China was being “unhelpful,” added one European negotiator via text message from inside a negotiation session. A fund without China “would not be acceptable to Western countries,” said the negotiator, who spoke on the condition of anonymity to discuss the closed-door talks.

Civil-society activists — those who have long advocated for industrialized nations to pay for climate harms — view the debate about China’s obligations as a “poison pill” that could derail the negotiations.

“Trying to tie the fund to other important issues that this COP needs to resolve won’t help with the politics of actually establishing the fund here,” said Mohamed Adow, executive director of the Kenya-based nonprofit Power Shift Africa.

He added that the United States — the world’s biggest oil and gas producer — remains the biggest obstacle to loss-and-damage funding, as well as humanity’s overall warming goals.

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Getting both the United States and China on board with a loss-and-damage deal could be the key to success at these climate talks, said Preety Bhandari, senior adviser in the global climate program and the finance center at the World Resources Institute think tank. Failure, she added, “would mean the unraveling of this COP.”

The four-page draft cover text released Friday is a more consolidated version of a sprawling list of proposals the Egyptian COP27 presidency had published the day before. It doesn’t include proposals — such as a call to phase out oil and gas as well as coal — that many had hoped would push the world forward in its efforts against climate change.

At a news conference Friday, Tuvaluan Finance Minister Seve Paeniu presented a petition signed by roughly half a million people calling for a “Fossil Fuel Non-Proliferation Treaty,” an idea also endorsed by the Pacific Island nation of Vanuatu, the European Parliament, and 70 city and state governments. He said a phaseout of fossil fuels — endorsed by the Intergovernmental Panel on Climate Change to avoid the most catastrophic effects of global warming — “must be in the cover decision by the end of today.”

Negotiators also remained divided over the rules for a program, set up in Glasgow last year, to conduct sector-by-sector analyses of what’s needed to curb emissions, including in developing countries.

Tellingly, the cover draft contains no details on the issue that could make or break the conference — how to pay for it all. “{Placeholder funding arrangement responding to loss and damage}” is all it says.

Kaplan, Puko and Halper reported from Sharm el-Sheikh; Kuo reported from Taipei, Taiwan. Michael Birnbaum in Washington contributed to this report.

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