The proposal still may not satisfy critics from developing countries who say the United States continues to shirk responsibility for all the greenhouse gases it has released into the atmosphere since the 19th century. Another potential sticking point is the United States’ insistence that China – now the world’s biggest carbon polluter – must be among the countries opening up its portfolio.
Yet the idea that the United States would even consider supporting the creation of a climate damages fund is a potentially seismic shift in thinking after 30 years of opposing the concept. It could also draw heavy criticism at home, where Republicans hostile to President Joe Biden’s climate agenda are set to take control of the House in January.
A State Department spokesperson said late Friday that summit delegates were continuing to negotiate, but did not confirm the draft text was a US proposal.
However, a British official told POLITICO that officials from the United States, Canada, New Zealand and Australia drafted the text together after being summoned by Alok Sharma, a British MP who led the UN climate talks last year in Glasgow, Scotland.
The draft being circulated, which has not yet been formally proposed to the Egyptian presidency of the summit, would expand the sources and methods of funding for affected communities. It calls for a two-year process that would culminate in the creation of an “effective fund that attracts contributions from a wide range 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 over China paying.
The United States, which is historically the world’s biggest contributor to climate change, has raised concerns that a fund would open it up to legal action for damage from its fossil fuel emissions dating back to the start. of the industrial revolution. The text includes an explicit clause exempting donor countries from “liability and compensation”.
Many provisions of the proposal address US concerns about relying solely on public money to fill the fund. US special climate envoy John Kerry – who had been conducting talks by phone from isolation after falling out with Covid-19 – said it would be politically difficult to secure that funding through Congress.
The draft calls for “strengthening the responsiveness” of bilateral, multilateral and international financial institutions, which alludes to development banks such as the World Bank, of which the United States is the main shareholder. It also calls on the World Bank and the International Monetary Fund to “contribute to financing arrangements…in response to loss and damage.”
Kerry argued that multilateral development banks need to spend more money on renewable energy and on efforts to adapt to droughts, rising seas and other effects of climate change in the developing world. He called on them this week to have a plan to overhaul their climate strategy by April.
The document also calls for the use of “debt deferral” by multilateral lenders in the wake of climate disasters that hit heavily indebted countries, an idea championed earlier at the two-week conference by the Prime Minister of Barbados Mia Mottley and supported by French President Emmanuel Macron. .
The project falls short of a request made on Tuesday by a bloc of 134 developing countries, including China, which called for the creation of a fund during the talks in Egypt rather than at a later date. This fund would be designed by a working group in which the balance of power would be held by the poorest countries who would be the beneficiaries. The EU criticized this proposal to prevent China from contributing.
The EU then made a counter-proposal to immediately create a new fund, but with only “the most vulnerable countries” as beneficiaries. He also conditioned the fund on global greenhouse gas emissions peaking before 2025 and would expand its donor base beyond the wealthiest industrialized countries — two issues that challenge long-standing red lines for China.
A climate activist present at the talks, Harjeet Singh of Climate Action Network International, derided the text leaked on Friday as “another watered-down version of what the European Union presented earlier”.
“Instead of establishing a new fund at COP27, as demanded by developing countries, it offers only a vague process to defer the decision,” said Singh, the group’s head of global policy strategy. “Such a proposal undermines the urgency of the action required to meet the needs of people facing the climate emergency.”