Late on Thursday night in the Egyptian resort of Sharm el-Sheikh, the Cop27 UN climate talks seemed stuck in an irretrievable logjam. Rich and poor countries had reached deadlock, a “breakdown between north and south”, according to the UN secretary general, António Guterres.
By Friday morning, the talks had been upended and the battleground dramatically redrawn, in a way it has not been in 30 years of these annual talks. At stake is the question of whether some of the world’s leading economies – countries such as China, Saudi Arabia and other Gulf petrostates, Russia and countries with high per capita income such as South Korea and Singapore – should start contributing for the first time to help the poorest and most vulnerable countries with the impacts of climate disaster.
“The UN framework convention on climate change was written from a 1992 perspective,” said Eamon Ryan, Ireland’s environment minister. “The scale of the climate crisis here and now is something we did not expect then.”
He said countries responsible for high levels of emissions, and with the capability and resources to provide financial assistance to poorer nations, should be part of the “donor base” for any new fund. “Large emerging economies with significant resources should be included,” he told the Guardian. “Saudi Arabia said on Thursday night it must be all the responsibility of the developed world. But they have not insignificant resources. Surely they have the capability of providing funding?”
Thirty years ago, the UNFCCC – parent convention to the 2015 Paris agreement, and the treaty under which this annual conference of the parties takes place – made a sharp distinction between developed and developing countries. Under its commitment to “common but differentiated responsibilities”, rich countries – producers of the vast bulk of greenhouse gas emissions to that point – would shoulder the required cuts to carbon dioxide emissions. They should also help poor countries to develop in a lower-CO2 way, and to adapt to the impacts of extreme weather.
Today, China is the world’s second biggest economy, and responsible for more cumulative emissions than any country other than the US. Nations classed in 1992 as developing – including Saudi Arabia, Russia, Brazil, Indonesia and India – now figure in the top 10 of cumulative historical emissions, eclipsing many developed countries, and their economies are also growing fast.
Frans Timmermans, the vice-president of the European Commission, said: “[We have to] take account of the economic situation of countries in 2022, not 1992.”
The dramatic shift at Cop27 began with the question of loss and damage. This refers to the devastation wreaked on the physical and social infrastructure of vulnerable countries by extreme weather, and the question of how to finance their rescue and recovery from climate-related disaster. Examples include the recent record floods in Pakistan that left 20 million people in need of humanitarian relief, and the drought in Africa that threatens 150 million people with extreme hunger.
Developed countries said they were willing to talk about loss and damage, but little financial help was forthcoming. A group of developing countries, the Group of 77 plus China bloc, put forward a proposal for a wholly new fund dedicated to loss and damage, which they said must be settled at this conference. But the rich world demurred, claiming that existing financial institutions could be used instead.
Angry developing country negotiators expressed their frustration. Molwyn Joseph, minister for Antigua and Barbuda and chair of the Alliance of Small Island States, said: “Some developed countries are furiously trying to stall progress and even worse, attempting to undermine small island developing states. So, not only are they causing the worst impacts of the climate crisis, they are playing games with us in this multilateral process.
“There has to be a mechanism [for funding loss and damage]. Whether you call it a fund or a facility. Failure to do so would establish a feeling of betrayal.”
It was a new fund, or nothing.
Early on Friday morning, the EU made a sharp U-turn. The bloc abruptly dropped its objection to a new fund, handing developing countries the concession they had demanded. “We were reluctant about a fund, it was not our idea. I know from experience it takes time before a fund can be established,” said Timmermans. “But since they [developing countries] were so attached to it, we have agreed. This is our final offer.”
The EU’s move turned the tables on all the main emerging economies, but China in particular. As part of the G77 plus China bloc, it was officially supportive of the demand for a new fund. But a new fund that included donors from countries deemed developing under the 1992 UNFCCC was not what China – or other countries, such as Saudi Arabia, Qatar, UAE and Russia – wanted.
“The problem with the 1992 approach is that it divides the world in a way that is not the reality any more,” said Ryan. “If you look at the historical emissions since the industrial revolution, there are lots of emerging economies [with a high proportion]. China and India would have significant responsibilities on that basis.”
This is not the first time at these talks that the EU has sought to make common cause with the poorest developing countries, pointing out that their interests are not identical to those of the biggest emerging economies. At the Durban Cop in 2011, the EU climate commissioner, Connie Hedegaard, gathered a coalition of nearly every developing country to push for a plan towards a new treaty, which became the Paris agreement of 2015. She was opposed by just two countries – China and India – who fought bitterly through a 48-hour marathon final negotiating session before finally agreeing. Four years later, the Paris agreement was signed.
Recent research, carried out by the Carbon Brief, found China, Russia and Brazil responsible for the greatest cumulative CO2 emissions to date, after the US. China is also the world’s second biggest economy, and countries such as Russia, Saudi Arabia and other Gulf countries have shared in the $3.9tn (£3.3tn) fossil fuel bonanza since the beginning of the Ukraine war.
China declined to comment. Last week, China’s head of delegation, Xie Zhenhua, appeared to say China was willing to provide funds and other help, but stopped well short of accepting the idea of paying into a common fund.
“There is not an obligation on China [to contribute funds] but we are willing to make our contribution … China has already been doing that, [providing] help to other developing countries. Our attitude [to loss and damage] is very supportive and understanding,” said Xie. “We strongly support the concerns from developing countries, especially the most vulnerable countries, for addressing loss and damage because China is also a developing country and we also suffered a lot from extreme weather events. It is not the obligation of China to provide financial support under the UNFCCC.”
If China, or other emerging economies, prevent the EU proposal from being adopted, the poorest and most vulnerable countries will face a hard choice – whether to challenge such countries, or reach some other compromise.
Many developing countries were publicly cautious over the EU’s proposals. Carla Barnett, the secretary general of the Caribbean Community group of countries, said: “There’s only one option for small island developing states, a financing fund that delivers a just pathway for the future of our countries. Division and delay tactics will not work. This is a matter we defend on the basis of justice.”
The Guardian has been told that some developing countries privately welcome the move by the EU, but are wary of saying so publicly for fear of incurring China’s wrath. Civil society groups attacked the EU’s proposals. Mariana Paoli, of Christian Aid, said: “It is clear that the US and Europe are trying to divide the developing country bloc of countries at Cop27. The new proposals from the EU on a loss and damage fund is an attempt to wriggle out of commitments made under the Paris agreement, which commits rich polluting countries to cut emissions in an effort to keep global heating to 1.5C. The EU is now trying to expand this to include lower income countries which goes against the principles of the Paris agreement, which states that it is developed countries which caused the climate crisis, that need to cut their emissions most urgently.”
Timmermans said the EU’s offer was not tactical, or intended as divisive, but made in good faith to forge a workable deal. “I’m thinking about my kids. We can’t afford to have a failure here,” he said. “If our steps forward are not reciprocated by others, there will be a failure. I hope that can be avoided.”
