Climate talks are becoming tense as the US opposes the European aid plan

“The US could end up being isolated from the whole conversation and therefore has no choice but to get involved,” Tuvalu Finance Minister Seve Paeniu told reporters on Friday.

The EU proposal also calls for China to play a role by contributing money to a fund to offset climate damage – a condition that the country, which is now by far the largest emitter of greenhouse gases, may find unsustainable.

Some within the EU see that gamble to include Beijing in the “loss and damage” proposal as an opening for the US, which wants China and other countries such as Saudi Arabia and Qatar to pour into every possible fund.

“We would like the US to go our way,” Spain’s Minister for Ecological Transition and Demographic Challenge Teresa Ribera told POLITICO. “Politically and geopolitically, I think it’s good for the American side to join as well.”

The US has long resisted the idea of ​​a loss and damage fund that could be accessed by countries struggling with rising seas, intense droughts and brutal storms worsened by climate change. It fears endless lawsuits from lower-income countries demanding compensation for damage from all the planet-warming gases it has released into the atmosphere since 1850. While the US was open to discussing a fund again this year, it did not support the idea.

Kerry has said the US is considering a range of options but has not settled on a specific option. He told POLITICO on Wednesday that the US supports a resolution on a loss and damage plan by 2024 at the latest, a timeline set in the agenda for this year’s talks.

EU climate envoy Frans Timmermans made what he described as a compromise offer that would allow financing of loss and damage through “a broad donor base” with a “mosaic of solutions” such as taxes on international aviation, shipping and fossil fuels.

And it was one that could have broader political ramifications by driving a wedge between China and the less developed climate sensitive countries Beijing has long tried to associate with during the climate talks.

The EU proposal would ensure that money flows for loss and damage only go to the most climate-sensitive countries, which is typically the case for least developed countries and small island developing States. That is different from a push from China and developing countries asking for money to go to all developing countries.

US delegates, traditionally the strongest opponent of climate recovery financing, were surprisingly silent on the EU announcement and did not speak during the Thursday session where Timmermans unveiled the plan.

They were “not amused, I understand,” said an EU official, speaking on condition of anonymity. When asked if the US could support their proposal, Timmermans said: “I don’t know at this stage.”

But the US is not the only country feeling sour. India’s proposal to phase out oil and gas, which was backed by the US, the EU and climate sensitive countries, was not included in the draft conference text released Friday morning. Some environmental groups said the language also weakened a commitment made during last year’s talks in Glasgow, Scotland, calling for countries to abolish fossil fuel subsidies.

“There can be no doubt. There can be no mincing words. There can be no sleight of hand with language, no fuzzy-wuzziness,” said John Beard, president of the Port Arthur (Texas) Community Action Network, an environmentalist group, at a press conference on Friday.

The Egyptian government that hosted the talks blamed stalled progress that the conference is expected to force overwork on developed countries, which it says have not pledged as much support to various climate funds as they did last year.

“It’s not helping,” a senior Egyptian official said, adding that the “mood in the room” kept drifting back to financial issues.

The draft text called for countries to develop a “roadmap” by 2025 for doubling the funding that developed countries contribute to adaptation, which will help countries arm themselves against the impacts of climate change. That doubling bring the total annual figure up to $40 billion.

But developing countries have accused rich countries of pushing forward too little money. They are also skeptical of the promises of private sector financing for adaptation, which historically have sparked little corporate interest.

Countries hope to address some of those money flows through changes in international financial institutions such as the World Bank and the International Monetary Fund. The draft text asks those banks to “significantly increase climate ambition” and align their funding with the goals of the Paris Climate Agreement.

The text encouraged shareholders at those banks to “define a new vision” and “operating model, channels and tools” to tackle climate change, including a call for more risk-taking to triple climate finance by 2025.

Those suggestions align with the recommendations of the Bridgetown Initiative, led by Barbados Prime Minister Mia Mottley, and build on broader calls for reform by US Treasury Secretary Janet Yellen and others. They have criticized the banks for being too risk averse and unable to cope with global collective challenges such as climate change.

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