Australian officials at a climate change conference in Egypt have spoken in favour of allowing discussion about wealthy nations paying compensation to developing nations for "loss and damage" caused by global warming.

The move comes as Australia openly lobbies nations to support its bid to co-host the 2026 UN climate conference with Pacific nations.

Minister for International Development and the Pacific, Pat Conroy, will lead Australia's delegation during the first week of talks and says a co-hosted conference would send a powerful message.

"I think people are broadly supportive but obviously other countries in our regional bloc may have interest in it so there will be the normal sort of diplomatic rumble and tumble about it," Mr Conroy told the ABC.

One of the most contentious discussions at this conference will be whether industrialised nations should compensate developing nations for damage caused by climate change.

Many wealthy nations have long opposed "loss and damage" negotiations and worry that they may be held culpable and financially responsible as a result.

In the pre-conference negotiations over official agenda, several developing nations pushed for discussion about loss and damage to be formally included.

The ABC has been told that Australian delegates spoke in support of allowing discussion, despite pushback from some other developed nations, although the Australian government's policy has not changed.

"Australia supported putting a discussion of loss and damage on the agenda at COP2," Mr Conroy told the ABC.

"Australia supports having constructive discussions at COP27 on loss and damage finance and is seeking to better understand the options that best serve the needs of Pacific island countries."

Climate Analytics chief executive Dr Bill Hare is in Egypt for the conference and said the issue of finance could influence whether nations support Australia's bid to co-host in 2026.

"We've seen some of the events that might be called loss and damage already this year, like the massive floods in Pakistan that left millions of people displaced," Mr Hare told the ABC.

"I think it's great to have a COP in Australia but if it doesn't really show a lot of improvement in some of the positions on finance loss and damage, then there is not going to be a lot of support for Australia hosting the COP.

"There is a lot of risk there."

US President Joe Biden is attending this year's conference in Egypt, but Mr Conroy says it is appropriate that Prime Minister Anthony Albanese remains in Canberra before attending other summits.

"Prime Minister Anthony Albanese can't be everywhere at one," Mr Conroy said.

"It is important for him to be in Australia for parliament and then immediately after that he will be meeting leaders at the G20 in Bali, and then the East Asia Summit and the APEC summit.

Mr Conroy said the conference would also present an opportunity for him to strengthen relationships with Pacific leaders in attendance.

But Dr Hare told the ABC he had heard differently from some delegations in Egypt.

Brazil's new president will be attending the talks and former president of Kiribati, Anote Tong, said last week the conference would be strengthened if the Australian prime minister attended.

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