Ahead of the upcoming world climate conference, the EU will continue to insist that China and other large emitting countries pay their fair share of climate finance – but how remains subject to discussion.
Climate financing will be centre-stage at COP29, the world’s annual climate negotiations, taking place in Azerbaijan this November. Richer countries are currently supposed to channel $100 billion of annual support to poorer countries, but this is expected to be replaced by a new framework from 2025.
The issue is at the heart of global climate politics. Poorer countries argue that they should be supported in their efforts to decarbonise and adapt to climate change – as wealthier countries are responsible for the lion’s share of historical emissions.
China sits awkwardly in the middle of this debate.
The EU, which is the single largest climate finance contributor, has long been coaxing China to chip in – instead of letting Beijing hide behind its 1992 status as a developing country. Whenever Europe meets Beijing, the topic tops the agenda.
In official comments, European diplomats are careful to never mention the C-word.
However in mid-August, EU countries and the European Commission upped the stakes, saying that countries “with high GHG-emissions and economic capabilities” should “join the effort,” in a document submitted to climate body UNFCC by the Hungarian EU Council presidency and the Commission.
Now MEPs, who will prepare a European Parliament position to inform the EU’s overall negotiating position, are looking to further ratchet up the pressure.
“To ensure meaningful progress, climate finance must be fair and reflect the economic balance and responsibilities of all major global powers,” says Javi López, a Spanish socialist (S&D), who is jointly in charge of shaping the parliament’s position ahead of COP29 in the Azerbaijani capital of Baku.
Alongside pushing for an expansion of the pool of climate donors – the resolution he is co-negotiating notes that the bloc is by far the largest spender at almost €30 billion in contributions – López told Euractiv that “advancing the full operationalisation” of the Loss & Damage Fund “should be a standing item in Baku”.
The Loss & Damage Fund was agreed during 2022 global negotiations and is the main mechanism to help poorer countries deal with climate-related impacts.
MEPs are also mulling a push for a “redesign of the criteria” used to establish who donates and who receives climate finance, Peter Liese, a German MEP who frequently leads for the centre-right EPP on climate, told Euractiv.
The initial categorisation, dating back to the United Nations Framework Convention on Climate Change (UNFCCC) in 1992, is increasingly considered outdated as new economic powers have emerged.
“China, Saudi Arabia and other countries have long had more emissions per capita than the European Union and are also extremely financially potent,” said Liese, who added that his group support an updated design.
Lena Schilling, a green Austrian MEP who is co-negotiating the COP29 resolution, said “the world of 1992” was long gone, and “countries like Saudi Arabia or the UAE, but also China, have both high emissions and the capacity to contribute financially.”
China stands as the second-largest economy in the world, emitting the most CO2 of any country, while its formal status as a developing nation normally exempts it from contributing to climate finance – a status the government stresses frequently.
Both Canada and Switzerland, traditionally allied with the EU on climate action, have already made concrete proposals to include China and other large CO2 emitting countries.
Bern suggests the ten biggest emitters with a GDP per capita above US$22,000, adjusted for purchasing power, should pay up. Canada eyes a threshold of US$20,000.
“We have not yet been able to examine the Canadian and Swiss proposals in detail, but personally I think they are a step in the right direction,” says Liese.
The proposals were “a basis on which the discussions can be continued,” Schilling told Euractiv.
But first, the parliament must find a joint position – a process that was launched in late July, when Schilling, López and their co-negotiators were appointed and will continue at a meeting of environment lawmakers on early Wednesday.
The official EU negotiating mandate will be adopted by EU countries. “I believe that the Council is on the right track on this issue,” says Liese.
[Edited by Donagh Cagney/Owen Morgan]
