Climate talks deadlocked over loss and damage finance, Indian proposal also in trouble

But the main fight was happening over the setting up of a new facility for loss and damage finance, the subject that has attracted the maximum attention at this meeting. The developed countries, led by the US, want loss and damage to flow through existing financial instruments, and do not support the creation of a new infrastructure. EU’s climate chief Frans Timmermans had argued on Wednesday that using existing instruments would ensure an immediate flow of funds for loss and damage, while creating a new facility could take years.

On Thursday, the G-77 and China group, the largest negotiating block at the climate conference comprising over 100 developing countries, insisted on its demand for a separate dedicated finance facility, and said it would be the key to success at this meeting. Pakistan, the current chair of the G77 plus China group, said all that the developing countries were asking for was a political statement of intent to create the new facility.

“We understand that this will take time to be set up and operationalized and get the money to flow into it. But it is important. Here, we are seeking just a political statement. If even that much is not acceptable, then it is clear that loss and damage does not matter,” said Nabeel Munir, Pakistan’s ambassador to South Korea and a delegate here.

“We want to be clear… loss and damage is not about charity. We are not asking for dole outs. Loss and damage is climate justice,” he said.

A new finance facility is not the only point of contention. There are strong disagreements over who should benefit from loss and damage, and who all must contribute to it. The developed countries, including the US and the European Union, want major economies like China or India to also contribute to the fund.

“We should look at the world as it is today in terms of economic position, and not as it was in the 1990s. The world can no longer be defined between developed and developing countries. It is far more complex than that and that needs to be reflected here,” Timmermans said.

Negotiators are expected to work through the night to resolve the differences and reach compromises.

Early in the morning, the COP27 presidency came out with a ‘non-paper’, an informal set of proposals and provisions that it considered could form the main elements of the final outcome from the conference.

The 20-page ‘non-paper’ did not make any mention of the Indian proposal to give a call for all fossil fuels to be phased-down. India said it would ensure that its concerns were adequately concerned in the final outcome. But sources indicated that several countries in the G-77 plus China group were not very supportive of the proposal.

Incidentally, a joint statement by the BASIC countries, comprising India, China, South Africa and Brazil on Wednesday morning did not mention the Indian proposal at all. On the other hand, after the initial hesitation, developed countries, including the US and EU, had backed the Indian proposal.

On Wednesday US climate envoy John Kerry told Bloomberg in an interview that it would support it if it focused on unabated use of oil and gas.

“It has to be (about) unabated oil and gas. Phase-down, unabated, over time. The time is a question, but ‘phase-down’ is the language we supported,” Kerry was quoted as saying.

At the Glasgow conference last year, the developed countries had pushed for a mention of ‘phase-out’ of coal in the final agreement, which, at the last moment, had been changed to ‘phase-down’ on India’s insistence. This year India argued that it was wrong to single out any one energy source as science showed that fossil fuels in general were responsible for causing global warming.