As the PM Anthony Albanese was rattling around Washington last week, trying to keep a straight face, and then getting ready for his trip to Beijing this week, talks about the Loss and Damage Fund were collapsing in Aswan in southern Egypt, sabotaged by Washington and Beijing.

The agreement to create the Loss and Damage Fund (LDF) was the only concrete outcome of last year’s annual climate change conference – COP27 – in the Egyptian resort of Sharm El Sheikh.

If Albanese and Joe Biden knew it was collapsing as they toasted each other’s fine qualities and the boundless friendship of our two nations, they weren’t talking about it – the only reference to climate change at their press conference was about how great it was going to be because of the Climate Critical Minerals and Clean Energy Compact they had established.

A 24-member committee was formed at Sharm El Sheikh last November to design the LDF over four meetings in 2023. Last week the fourth and final meeting ended in disarray, with disagreement over who should fund the payments to poor countries suffering the effects of climate change, and which body should administer the fund.

They’re apparently now going to have a fifth round of talks this month, but hopes are low and it looks like COP28 in Dubai at the end of November starts on the rocks and stays on the rocks. After 27 annual meetings designed to reduce global greenhouse gas emissions and prevent disaster, or worse, emissions are still rising, and it looks unlikely that will change after No.28.

‘Highway robbery’

Developing countries, led by China, will never formally agree to cut their own emissions unless they are compensated for the damage already caused by developed countries, whose development was provided by fossil fuels and is the cause of the warming.

And the developed countries, led by the United States, will never accept liability or the idea of compensation. The US and others might put a billion or two into a fund run by the Washington-based World Bank, but the World Bank wants to charge a 17 per cent “hosting fee”, outraging developing country delegates.

At the meeting in Aswan last month, the delegate from Antigua and Barbuda, Diann Black-Layne, called it “highway robbery”.

The US is refusing the developing country demand to put the tens of billions of dollars needed into a stand-alone UN fund that has a governing board with a majority of developing countries because it is likely to be sceptical – if not hostile – towards America.

Also there would be so many strings attached to the money that it will probably never get handed out anyway, and would stay in the World Bank until it’s gone, which wouldn’t take long being clipped at 17 per cent per year.

The impasse over money and the LDF is the main barrier to global co-operation on climate change, and the US and China are the reasons it is getting nowhere. Naturally, Australia is staunchly behind America’s demand that the fund be administered by the World Bank, and is also against coughing up much money, if any.

But I suspect the real problem here is that the only thing China and America are thinking about these days is their great geopolitical contest.

They are wrestling over the tiller of a burning ship.

China’s leader Xi Jinping. Photo: Getty

Xi Jinping wants to restore China’s rightful place in the world through the Belt and Road Initiative bribes to poor countries and an incredible military build-up that was laid out in gob-smacking detail in the Pentagon’s 2023 China Military Power Report. It’s not just the 500 nuclear warheads China now has, rising to 1000 by 2030, but also it now has the world’s biggest navy and, it’s believed, a bigger defence budget than the US, except that’s kept secret.

American policy towards China is containment, which is definitely not working, and then winning at some ill-defined geopolitical p-ssing contest because, well, if America is not in charge of the world there will be chaos.

Joe Biden was quite explicit about that on October 20: “American leadership is what holds the world together”.

Only if it can hold itself together that is. Politically, America is already in chaos, although not economically, while China is the reverse: Its economy is weak and getting weaker, but the Communist Party has never been stronger and less chaotic.

The United States economy is remarkably, unexpectedly strong, but the 80-year-old president is neck and neck in the polls with a 77-year-old real estate developer and reality TV star who is facing 91 criminal charges and a civil action for fraud but who is nevertheless a chance to beat Biden in the 2024 election and embark on a four-year campaign of revenge and disorder.

Oh, and the House of Representatives, having sacked the Speaker for the first time ever, has just elected a man who doesn’t believe in evolution and who says his policies can all be found in the Bible.

Stuck in the middle

Australia, meanwhile, is trying to stay sweet with everybody, but especially the United States. Last week Anthony Albanese, having been state dinnered, intoned: “The relationship between Australia and the United States has never been more important – and, of course, it has never been stronger than it is right now”.

As for our relationship with China, the workshopped Australian government refrain is: “we’ll co-operate where we can, we will disagree where we must”, while trying to sell them as much stuff as possible.

On climate change, Australia will do the minimum required to get us into the COP meetings and to let the ALP assert that it’s doing more than the Coalition would be (not a high bar), celebrate the great opportunity of the energy transition while quietly supporting the United States in sabotaging global agreement.

As Brandon Wu of ActionAid tweeted from the conference hall in Aswan: “The cognitive dissonance is unbelievable. The fact that we can spend billions of dollars on war machines and we have to fight tooth and nail for every few million dollars for climate finance is just an insult.

“It’d be nice if one of those wars that we were fighting was a war on climate change.”

Alan Kohler writes twice a week for The New Daily. He is finance presenter on ABC News and founder of Eureka Report