In a Reversal, the U.S. Agrees to Climate Payments for Poor Nations

The United States and the European Union are pushing for assurances that China would contribute to any fund created — and that the country would not be eligible to receive money from it. The United Nations currently classifies China as a “developing country,” which would make it eligible for climate compensation, even though it is now the world’s biggest emitter of greenhouse gases as well as the second-largest economy. China has fiercely resisted being treated as a developed nation in global climate talks.

Our Coverage of the COP27 Climate Summit

Sidelined: John Kerry, the United States special envoy for climate change, tested positive for Covid-19 in the waning hours of negotiations at the United Nations climate talks.In Search of a Solution: As talks dragged on, Egypt, the host of the summit, floated the idea of a fund to help developing countries cope with “loss and damage” caused by global warming. High Expectations: Brazil’s president-elect, Luiz Inácio Lula da Silva, was greeted as a hero at the summit for his promise to stop Amazon deforestation. But he faces many challenges.

There is also no guarantee that wealthy countries will deposit money in the fund. A decade ago, the United States, European Union and other wealthy emitters pledged to mobilize $100 billion per year in climate finance by 2020 to help poorer countries shift to clean energy and adapt to future climate risks through measures like building sea walls. They are still falling short by tens of billions of dollars annually.

While American diplomats may agree to a fund, money must be appropriated by Congress. Last year, the Biden administration sought $2.5 billion in climate finance but secured just $1 billion, and that was when Democrats controlled both chambers. With Republicans set to take over the House in January, the prospects of Congress approving an entirely new pot of money for loss and damage appear dim.

For their part, several European nations have voluntarily pledged more than $300 million to address loss and damage, with most of that money going toward a new insurance program to help countries recover from disasters like flooding. Poor countries have praised those early efforts while noting that they are only a fraction of what is needed.

“It worth noting that we have the fund but we need money to make it worthwhile,” said Mohamed Adow, executive director of Power Shift Africa, a group that aims to mobilize climate action across the continent. “What we have is an empty bucket. Now we need to fill it so that support can flow to the most impacted people who are suffering right now at the hands of the climate crisis.”

There was a brewing dispute over what to call a new fund. Developing nations consider it compensation and climate activists refer to it as reparations. But American diplomats were adamant that the money should be called “loss and damage resources.”

For the United States, this year’s climate summit, known as COP27, has been a rude awakening. President Biden and his climate envoy, John Kerry, arrived in Egypt touting the new landmark legislation that will invest $370 billion in clean energy and help America deeply slash emissions. Mr. Biden told the assembled ministers and diplomats that the United States wanted to lead the world in transitioning away from fossil fuels and toward a future where global warming would be constrained to relatively safe levels.