As COP27 Begins, U.S. Seeks Billions in Carbon Credits to Wean Developing Countries Off Fossil Fuels

SHARM EL SHEIKH, Egypt—U.S. climate envoy John Kerry is planning to propose a new carbon-credit program that aims to ramp up funding from businesses and governments in wealthy economies to help developing countries cut back on fossil fuels.

Mr. Kerry said in an interview that he plans to make the proposal at the United Nations climate-change conference in Egypt on Wednesday, adding that he was still consulting with representatives of other countries on the size and structure of the program.

A U.S. official familiar with the matter said the program aims to raise tens of billions of dollars by boosting the ability of regions and countries in the developing world to sell credits whenever they shut down fossil-fuel-energy sources such as coal mines or accelerate renewable-energy construction.

Developing countries have demanded $1.3 trillion in annual funding by 2030 from wealthier countries to finance their energy transition and help them adapt to the effects of climate change. Wealthier nations have so far fallen short of their smaller pledge to deliver $100 billion a year in funding.

As world leaders converged on Sharm El Sheikh Monday at the outset of two weeks of climate talks, the globe’s biggest emitters, China and the U.S., have come under pressure to do more to help developing countries with their energy transition.

“The U.S. and China must really step up to the mark,” French President Emmanuel Macron said on the sidelines of the conference, calling on “rich non-European countries…to pay their share.”

Leaders at the summit—known as COP27—face the challenge of building consensus at a time of geopolitical tension and energy-market turmoil. Russia’s decision to invade Ukraine and cut the flow of natural gas to Europe has forced capitals across the globe to focus on the security of their energy supplies. Europe is burning more coal and sucking up supplies of liquefied-natural gas from around the world.

“Russia’s invasion of Ukraine and contemptible manipulation of energy prices has only reinforced the importance of ending our dependence on fossil fuels,” U.K. Prime Minister Rishi Sunak.

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