Is China a ‘developing’ country? That’s the trillion-dollar question at UN climate talks

Both projects break the mold of the Paris climate accord: They are funded by countries that are designated as developing nations, entitling them, in theory, to receive climate financing from developed nations. But, in practice, the oil-rich Gulf nations are increasingly investing in green projects in poorer countries—not mainly as a form of development aid but to make money.

At this year’s U.N. climate talks in Baku, known as COP29, the West is pushing to reorder the developed-developing divide that has governed climate negotiations since they began in 1992 with the first global-warming treaty signed in Rio de Janeiro. Western officials say the 1992-era distinction no longer makes sense, while big developing nations say such arguments amount to an attempt by developed nations to shirk their historical responsibility for climate change.

The debate isn’t academic. The categories lie at the center of negotiations aimed at transferring more than a trillion dollars a year from developed economies to the developing world.

The Paris climate accord of 2015 said developing countries should channel $100 billion a year to the developing world through 2025, after which the funds should increase. Diplomats gathering in Baku are negotiating a new, larger target at this year’s conference. Officials from developed and developing countries agree that more than $1 trillion a year is needed to finance poorer nations’ response to climate change—but not on who should pay up.

The U.S. and Europe want wealthier countries in the developing bloc to contribute—along with assurances that the funds would flow toward countries that really need it, not China or Saudi Arabia.

Additional contributions have become even more important since Donald Trump’s election victory. His campaign has vowed to pull the U.S. out of the Paris agreement, and the Trump presidency is likely to slash climate financing for poorer nations.

That would leave a big hole in funds available for the developing world. The U.S. has long struggled to scrape together climate funds because of opposition from Republicans, but the Biden administration says it did manage to live up to a pledge to provide over $11 billion in climate finance this year.

“Europe, which has been responsible for the majority of international climate funding to date, can’t do this alone," Joe Thwaites, a climate-finance expert at the Natural Resources Defense Council, a U.S. environmental group. “It will need all rich countries to step up to fill any gap left by the U.S."

Gulf countries are now among the wealthiest in the world per capita. South Korea and Chile, both members of the developing bloc, have grown rapidly and now boast higher GDP per capita than a number of European Union member states.

China, above all, is the world’s powerhouse of clean-tech manufacturing, as well as its largest greenhouse-gas emitter. Beijing is spending billions of dollars on renewable projects abroad—some $25 billion since 2016, Chinese officials said at the Baku conference. At COP29, a Chinese state-controlled power company signed an agreement with the Azerbaijani government to build a suite of green-energy projects.

China’s emissions have grown so much since 1992, along with its economy, that its historical responsibility for global warming—as measured by cumulative carbon-dioxide emissions since the dawn of the industrial era—now exceeds that of the 27 countries of the EU, according to a new analysis from Carbon Brief, a climate-research website.

The West says all that means higher-income countries in the developing bloc should be on the hook to help provide finance under the U.N. agreements.

“With affluence comes responsibility," Wopke Hoekstra, the EU climate commissioner, said at the conference this week.

Big developing countries view such arguments as an attempt by the West to wiggle out of commitments under the Paris agreement.

“We cannot allow that this COP should be the scenario of the great escape of developed countries to fulfill their legal obligations," said Diego Pacheco, a Bolivian negotiator who represents a group of countries that includes China, India and Saudi Arabia.

The divide in the 1992 climate treaty rests on a question of historical responsibility for climate change. Developed countries accepted leadership to confront climate change because their carbon-dioxide emissions caused most of the warming since the dawn of the industrial era, now around 1.3 degrees Celsius.

At the time, wind and solar power and electric vehicles were fringe technologies—and far more expensive than burning fossil fuels. Fast forward three decades, and renewables and electric vehicles are now mainstream.

Clean energy is attractive to big investors from Western nations, the Middle East and Asia without subsidies—even if the technical challenges of incorporating lots of renewables into grids haven’t been solved. Investors view the answers to those challenges—batteries and more transmission lines—as opportunities as well.

At the same time, China is now responsible for a third of annual carbon-dioxide emissions, the largest in the world. It has jumped ahead of the EU in terms of responsibility for historical warming but it is still far behind the U.S., according to the Carbon Brief analysis. Because of its large population, China is still behind most developed countries in terms of carbon dioxide emitted per capita.

Western countries say including the finance provided by China and the Gulf state in the new goal would put some countries of the developing bloc on the hook for investments they are doing anyway.

So far, China and the other wealthier countries of the developing world bloc have refused to budge.

“We call on developed countries to see squarely their historic responsibilities," said Chinese Foreign Ministry spokesman Lin Jian.

Write to Matthew Dalton at Matthew.Dalton@wsj.com