Negotiators are working through the night to try and find enough common ground for a closing agreement at the COP27 conference.
Speaking in Sharm el Sheikh, Egypt’s foreign minister and COP27 President Sameh Shoukry announced a last-minute reprieve for delegates until Saturday.
“I remain committed to bringing this conference to a close tomorrow in an orderly manner, for the adoption of a series of consensus decisions that will be comprehensive, ambitious, and balanced,” he said.
A key sticking point in the conference so far has been a reparation fund for poorer countries, funded by wealthier states. The EU’s bargaining position was that it would back the fund if fast-growth economies, such as China, contributed.
“I have to say this is our final offer,” European Commission Vice-President Frans Timmermans said on Friday.
“This is where the member states can find an agreement and I have to thank all of them for the courage to go this far, but this is it.”
On Thursday night, EU negotiators had tabled a proposal to tie compensation to tougher emissions cuts. As part of the suggestion, all countries would be pushed to make steeper cuts in emissions as well as phasing out all fossil fuels.
Vulnerable nations have called for a deal to be sealed before the end of the talks.
"This is a historic opportunity that can’t be lost and that must be seized now," Maldives Environment Minister Aminath Shauna said.
Poorer countries that bear the brunt of climate change, from rising sea levels to extreme flooding, stepped up the urgency, accusing richer polluters of stalling and said they cannot wait another year for the creation of a fund to pay for damages.
China, which had been quiet during much of the talks, insisted that the 2015 Paris Agreement should not be changed and money for the new fund should come from developed countries -- not them. Saudi Arabia also said it was important “to not go beyond what we have” in the Paris pact, and was reluctant to contribute to a compensation fund.
UN Secretary-General Antonio Guterres, who had flown in for the final stage of negotiations, warned of a “breakdown in trust between North and South, and between developed and emerging economies.”
“The world is watching and has a simple message: stand and deliver,” he told leaders, adding that there was “no time for finger-pointing.”
The United States has resisted any fund that would suggest liability and compensation -- let alone reparations --- for decades of greenhouse gas emissions by industrialised nations.
European countries have backed calls by island nations for a “mosaic” of financial arrangements drawing on public and private sources of money.
But there are big differences over who should pay.
German officials said the money should not come only from the industrialised nations, but also from major emerging economies whose greenhouse gas emissions have increased sharply in recent decades.
Heavy polluters China and India, however, argue they should not have to contribute because they are still officially considered developing nations.
The issue of loss and damage is one of three financial aid pots discussed. Rich nations agreed at past conferences to spend $100 billion a year to help poorer countries develop cleaner energy systems and adapt to prevent future disasters -- though they have lagged in giving the funds.