EU proposes mid-way climate damage fund to end COP27 talks

By Kate Abnett

SHARM EL-SHEIKH, Egypt, Nov 18 (Reuters) – Climate negotiators were on Friday mulling a European Union proposal late at night aimed at resolving a stubborn deadlock over funding for countries hit by climate disasters- fuel and push for this year’s United Nations climate summit. Egypt closer to the final market.

The proposal from the European Union would be to set up a special fund to cover loss and damage in the most vulnerable countries – but financed from a “broad donor base”.

This implies that high-emitting economies such as China would have to contribute, rather than the fund being funded by rich nations that have historically contributed the most to warming.

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

The issue of loss and damage dominated this year’s summit, with more than 130 developing countries calling for the meeting to agree on a new fund to help them tackle the irreversible damage from floods, droughts and other climate-influenced impacts.

The US and the EU had previously opposed the idea, fearing it could open the door to establishing legal liability.

The latest EU proposal offered a middle ground – but Timmermans ordered that countries that agree should increase their ambition to slow climate change.

The conditions attached to the offer included that countries must agree to phase out all fossil fuels, and to phase out unabated coal-fired power generation as soon as possible – with countries reporting on progress in to ensure this is done.

The Alliance of Small Island States and the G77 club of 134 developing countries, both of which have sought a new fund at COP27, were in consultation on 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 how much we get on loss and damage.”

The EU’s offer is at odds with a proposal from developing countries and China which called for all developing countries to have access to the fund. That proposal used a United Nations definition that would allow China to receive money, not give money.

Timmermans’ offer goes further than the United States has so far indicated it would be willing to go in funding loss and damage. Deals at COP27 must be made with the support of the nearly 200 countries that will be present at the talks.

“It seems that the United States is cornered,” said one observer in the negotiations. (Reporting by Kate Abnett; Editing by Katy Daigle and William Mallard)

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