That left the United States, which has pumped more greenhouse gases into the atmosphere than any other nation in history, as the last major obstacle. On Saturday, as talks went into overtime, American officials said they would accept a loss and damage fund to break the deadlock.
Nevertheless, major hurdles remain.
The United States and European Union are pushing for assurances that China will ultimately contribute to any fund established – and that China would not be entitled to receive any money from it. The United Nations currently classifies China as a developing country, which would make it eligible for carbon offsetting, even though it is now the world’s largest emitter of greenhouse gases and the second largest economy. China has fiercely resisted being treated as a developed nation in global climate negotiations.
There is also no guarantee that wealthy countries will contribute money to the fund. A decade ago, the United States, the European Union and other wealthy emitters pledged to mobilize $100 billion annually in climate finance through 2020 to help poorer countries transition to clean energy and, through measures like building levees, adapt to future ones adapt to climate risks. They are still short by tens of billions of dollars annually.
While American diplomats approved a fund, the money must be approved by Congress. Last year, the Biden administration requested $2.5 billion in climate finance but only secured $1 billion, and that was when Democrats controlled both houses. With Republicans, who are largely opposed to climate aid, set to take over the House of Representatives in January, the prospects of Congress approving an entirely new pot of loss-and-damage funds seem slim.
“Giving US taxpayer money to a UN-sponsored green payoff fund is utterly misguided,” said Wyoming Republican Senator John Barrasso. “The Biden administration should focus on cutting spending at home, not sending money to the UN for new climate deals. Innovation, not fixes, is key to combating climate change.”
A large number of European nations have volunteered for their part has so far pledged more than $300 million to repair losses and damages, with most of that money going to a new insurance program to help countries recover from disasters like floods. Poorer countries have hailed these early efforts while warning that they could ultimately face hundreds of billions of dollars a year in unavoidable, irreversible climate damage.