The stand-off comes as advanced economies are pressed into acknowledging the need to compensate their developing peers for accelerating climate damage, and as total funding needs appear poised to run into trillions, rather than billions, of dollars.
Somewhere in the middle, China -- accounting for 30 percent of global greenhouse gas emissions, by far the largest share -- is feeling pressure from both sides, not only to enhance its carbon cutting goals but to step up as a donor nation, negotiators and analysts say.
At last year's UN climate summit in Glasgow, nearly 200 countries vowed to "keep alive" the Paris Agreement's aspirational goal of capping global warming at 1.5 degrees Celsius above pre-industrial levels.
Nearly 1.2C of warming so far has seen a cascade of increasingly severe climate disasters, such as the flooding that left a third of Pakistan under water this summer, claiming at least 1,700 lives and inflicting $30 to $40 billion in damage.
The Glasgow Pact urged nations to ramp up their emissions reduction commitments ahead of this year's summit in the Red Sea resort of Sharm el-Sheikh, but with little immediate uptake by nations.
This leaves the world on track to hot up by about 2.5C -- enough, scientists say, to trigger dangerous climate tipping points.
"Make our lives easier"
Meanwhile, China and India have called the 1.5C goal into question, with Beijing pointing out that the binding target agreed in Paris was "well below" 2C. The 1.5C is a non-binding ambition, but has since been confirmed by science as a far safer global threshold.
"Egypt doesn't intend to be the country that hosts a retreat from what was achieved in Glasgow," US special climate envoy John Kerry said at the weekend, adding that "most countries here have no intention of going backwards".
At COP27's midpoint, countries are at an impasse, awaiting the arrival of ministers to cut through political knots above the pay grade of negotiators.
"All the big political crunch issues are unresolved," said Alden Meyer, a senior analyst at climate think tank E3G.
A reality-check report released at COP27 last week showed CO2 emissions from coal, gas and oil are on track to hit record levels in 2022.
To accelerate decarbonisation, many developing nations -- including small island states whose very existence is threatened by rising seas -- favour a deepened commitment to the 1.5C target.
Negotiators in Sharm el-Sheikh will look to a bilateral meeting Monday in Bali between China's Xi Jinping and US President Joe Biden, along with the communique from a G20 meeting both will subsequently attend, for signals that could break the deadlock in Egypt.
"Confirming the 1.5C goal in Bali would make our lives easier," a senior negotiator at the climate talks said.
"Polluters must pay"
When it comes to money, the spotlight in Egypt is on so-called loss and damage, UN-speak for the life, property and cultural heritage lost in natural disasters.
Rich nations fearful of creating an open-ended liability regime agreed only this year to include this thorny topic on the formal agenda.
Developing nations are calling for the creation of a separate facility, but the US and the European Union -- while not precluding such an outcome -- have said they favour using existing financial channels.
"This is the highest profile, most political issue at the COP," said Meyer.
On Monday, G7 countries and nearly 60 nations most vulnerable to climate change formally launched a scheme aimed at providing financial support for communities battered by climate disasters, with around $211 million of initial funding.
Kenneth Ofori-Atta, Ghana's finance minister and chair of the 'V20' group of nations most vulnerable to the effects of climate change, said the scheme "is long overdue".
Another track of the talks, meanwhile, has opened on how much money the Global South will get -- after current pledges of $100 billion a year expire in 2024 -- to help green their economies and prepare for future warming.
Options range from expanding access to IMF and World Bank funds, to a windfall tax on fossil fuel companies, to broadening the base of donor nations to include China, the United Arab Emirates, Saudi Arabia and other nations.
"China and India are major polluters, and the polluter must pay," Gaston Browne, prime minister of Antigua and Barbuda, said last week, speaking for the AOSIS coalition of small island states.
"I don't think there are free passes for any country."