EU proposes halfway point for climate damage fund to unblock COP27 talks

By Kate Abnett

SHARM EL-SHEIKH, Egypt, Nov 18 (Reuters) – Climate negotiators were on Friday pondering a late-night proposal from the European Union to break a stubborn deadlock on funding for countries hit by climate disasters and to take this year’s UN climate summit to the next level. Egypt closer to final deal

The EU proposal would be to create a special fund to cover loss and damage in the most vulnerable countries – but financed by a “broad donor base”.

That suggests that high-emitting emerging economies like China should contribute, rather than the fund being financed only by rich countries that have historically contributed most to warming.

“What we would propose is to create a loss and damage fund for the most vulnerable countries,” said EU climate policy chief Frans Timmermans at the COP27 summit.

The issue of loss and damage dominated this year’s summit, with more than 130 developing countries demanding that the meeting reach an agreement on a new fund to help them deal with the irreversible damage of floods, droughts and other climate-related impacts.

The United States and the EU had previously opposed the idea, fearing it would open the door to legal liability.

The EU’s most recent proposal offered a middle ground, but Timmermans argued that it should be fulfilled by countries agreeing to step up their ambition to slow climate change.

The terms attached to the offer included countries agreeing to phase out all fossil fuels and phase out unabated coal-fired power generation as soon as possible – with countries submitting progress reports to ensure this is done.

The Alliance of Small Island States and the G77 Club of 134 Developing Countries, who have both pushed for a new fund at COP27, discussed their response to the EU proposal.

Pakistan’s ambassador to South Korea, Nabeel Munir, said Timmermans’ proposal was “positive news” but some divisions remained.

“There are still many different opinions. For us, the success of COP27 depends on what we get in loss and damage.”

The EU bid is at odds with a proposal by developing countries and China to allow all developing countries access to the fund. That proposal used a UN definition that would have allowed China to receive money, not contribute it.

Timmermans’ offer goes further than the United States has so far indicated its willingness to accept loss and damage financing. Deals at COP27 must be made with the support of all the nearly 200 countries present at the talks.

“The US seems cornered,” said one observer at the negotiations. (Reporting by Kate Abnett; editing by Katy Daigle and William Mallard)

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