UN climate talks in Mexico hang in balance

Hopes have been raised of a possible breakthrough at the UN climate summit in Cancun as key talks enter the decisive final stage.

A draft text, being considered by delegates, looks to bridge differences that could scupper the talks. Earlier, prospects for a deal appeared to be receding, with nations clashing on future emission commitments.

Japan and Russia were opposed to further cuts under the Kyoto Protocol - a major demand of developing countries. There were also divisions over a proposed fund to help poor nations deal with climate impacts.

The latest draft document makes reference to a "second commitment period" of the Kyoto Protocol - a period in which countries in the protocol would make further emission cuts - without mandating that it will happen. The issue has caused major divisions between developing countries and Japan and Russia. However, it still needs to be accepted by the plenary of the 190-nation gathering.

The money wrangle concerned the proposed "Green Fund" - a vehicle that would gather and distribute funds running to perhaps $100bn (£63bn) per year by 2020. During overnight discussions into Friday morning, the US, EU and Japan stuck to their line that the World Bank must administer the fund. For developing countries, this was unacceptable, as they viewed the bank as a western-run institution.

The latest development, in which the World Bank will be invited to run the fund for an initial three-year period, seems to have won the support of many delegates and observers attending the summit.

Brazilian negotiator Luiz Figueiredo said Japan and Russia "accept this language, while before they didn't accept it", the AFP news agency reported.

The UK's Climate Secretary Chris Huhne warned that there was a "real danger" that the annual talks could become a "zombie process" if there was not a successful outcome.

The Sudanese negotiator suggested that it was too early to judge whether the draft document would succeed in delivering a deal at the talks being held in the Mexican resort. "At the first cut it shows some promise. But whether it amounts to something adequate to address the challenge is something we have to look at," Lumumba Stanislaus Di-Aping told BBC News.

As to whether it allowed Japan and Russia wriggle-room not to commit to a second commitment period under the Kyoto Protocol, he added: "That's a very serious question. We cannot have the [protocol] as an empty shell."

BBC environment correspondent Richard Black, reporting from the summit in Cancun, said the compromise text was a step forward but the talks were still likely to go down to the wire. "The new document is strong on acknowledging the scale of the problem, but does not commit parties to new measures to curb emissions," he observed. "It recognises that developed countries would need to cut their combined emissions by 25-40% below 1990 levels by 2020 in order to meet 1.5C or 2C targets - but does not say how it is to be done." He added that it "urged" Annex One countries (industrialised nations) to "raise the level of ambition" in order to meet the 25-40% threshold.

Some - especially the Latin American Alba bloc, spear-headed by Bolivia - also object to the Green Fund as currently conceived, because they believe western nations have a duty to pay up from the public purse, whereas the fund calls for money to be raised through levies on carbon trading, taxes on aviation, or other "innovative mechanisms".

Bolivia's hardline stance was not popular with all other developing countries, with Costa Rica saying the nation's delegation were "leading the process to delay the discussion".