New Zealand has been given a climate shame award by activists at a major international conference on the same day as it announced new funding to support countries in adapting to climate change.

Climate Action Network International allocated New Zealand the “Fossil of the Day” award after it opposed an agreement to establish a facility this year to finance the loss and damage effects of climate change in developing countries.

The topic, which deals with vexed issues including liability and reparations over climate pollution, has been high on the agenda at this year’s global climate talks COP27 in Egypt.

Developing countries, which have historically contributed very little to climate change, are set to face the greatest impacts. They argue that developed countries, which have caused the most pollution, should help pay for the loss and damage that occurs.

It is estimated climate change impacts have cost developing countries more than $800 billion in the past two decades and could rise to between $500b and $1 trillion a year by 2030.

Debates have raged for decades on the issue, including liability and compensation and some have suggested establishing a central fund, which could act as a sort of insurance scheme that wealthy countries could contribute to.

Last week, New Zealand announced it would reallocate existing aid funds of $20 million to support loss and damage.

Germany has made the largest commitment so far of $300m while Belgium announced just over $4m. Scotland has also upped its contribution to nearly $14m while Denmark committed $22m earlier this year.

However, New Zealand has so far opposed a central fund during negotiations at COP27.

Climate Action Network called it a “shameful about-face exposing their true allegiances – with other laggard-rich nations”.

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Oxfam in the Pacific’s project co-ordinator in Vanuatu George Koran said the New Zealand Government said it understood the urgent need for loss and damage funds yet there was no real action.

Oxfam had been critical of the $20m announcement given it was not new funding and had been reallocated from an existing aid budget.

 “It’s like robbing Peter to pay Paul – we need new and additional funding from our neighbours to fight this crisis,” Koran said.

Minister of Climate Change James Shaw, who is at the talks, said they wanted to make sure countries were committed to contributing to such a fund for loss and damage before establishing it.

“Our focus now should be on getting more rich nations to make financial commitments.

“We want to make sure we don’t foreclose any options on the precise arrangements for how loss and damage funding is delivered, as small countries like those in the Pacific can find working with the large global funds quite difficult and frustrating.”

Shaw said last week’s announcement showed the Government’s commitment to the issue that had been “so controversial that it has only made it into the agenda now, for the first time in 27 years”.

Shaw said they also wanted to ensure that regional and bilateral arrangements were encouraged, such as between New Zealand and Pacific countries.

Meanwhile, Shaw also announced today that a further $15m would be reallocated towards assisting countries with adapting to the impacts of climate change.

This would come from the $1.3b climate finance commitment announced last year for the period 2022–2025.

Other countries to receive the fossil award this week include the United States, which has received it twice, after opposing a legal structure around loss and damage.