The third day of the COP summit in Egypt saw signs of movement on climate finance and the resurrection of a controversy about the views of the World Bank president, Marc Daalder reports

A major emitter has budged on climate reparations while smaller developed countries including New Zealand continue to stump up cash for loss and damage in developing countries.

The United Kingdom announced it would defer repayments on aid loans when countries are hit by climate-fuelled extreme weather. While not quite the same as the direct payments announced by New Zealand, Austria, Belgium, Scotland and Germany at the COP27 climate summit in Sharm el-Sheikh, Egypt, it was well-received by representatives of at-risk countries.

China’s delegate at the conference also said his country would be willing to contribute to a global mechanism for loss and damage. Experts say it remains unlikely that a mechanism will be agreed at this COP. This is the first summit where the issue has even been on the agenda and controversial topics like loss and damage have taken years to sort out in the past.

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An aid to Mia Mottley, the Prime Minister of Barbados, said he commended the UK announcement.

“Adopting these clauses in debt instruments is the single most impactful way of making the international financial system fitter for the new world of shocks and for international development.”

Mottley lashed out at rich nations and the international finance system on the first day of the summit over the lack of progress on climate reparations.

“The Global North borrows at interest rates of between 1 to 4 percent. The Global South have 14 percent. And then we wonder why the just energy partnerships are not working,” she said in that speech.

“There must be a commitment to unlocking concessional funding for climate vulnerable countries. There is no way that developing countries who have been graduated can fight this battle without access to concessional funding.”

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Motley’s Bridgetown Agenda to reform the international finance system in service of transitioning to a low-carbon global economy has already received the backing of the French President Emmanuel Macron.

However, one major player in that system also came into the spotlight on Wednesday. When approached by a reporter for The Guardian, World Bank President David Malpass insisted he isn’t a climate denier and refused to answer questions about finance reform.

It came after former US vice president and climate advocate Al Gore called Malpass a climate denier in September. That day, he was asked by the New York Times whether he accepted climate science.

“I don’t even know, I am not a scientist and that is not a question,” he said at the time.

The White House said it “condemned” Malpass’ answer.

Asked about the issue this week, Climate Change Minister James Shaw said Malpass needed to clarify his view.

“Anybody who is in a position like the presidency of the World Bank at the very least needs to have a position on climate change. And actually the funding arrangements the World Bank is responsible for are so important that they need to have a forward-leaning position on climate change.”

Also on Wednesday, China said the United States had “closed the door to climate talks” and was responsible for reopening it.

Marc Daalder is a senior political reporter based in Wellington who covers climate change, health, energy and violent extremism. Twitter/Bluesky: @marcdaalder

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