It’s not yet a crisis, but an air of anxiety and resignation has decended upon the climate talks in Cancun. There are just two days to go till the end of the conference but it is clear that there will be no miracle agreement that somehow recognises the science of climate change at this meeting. Or anything near it. Ministers and negotiators have enough on their plate just trying to save the process from collapse to be able to focus their attention onto what it might achieve.

The UNFCCC chief Christiana Figueres, the UN secretary general Ban Ki-moon and Mexico president Felipe Calderon all appealed to delegates at the ceremonial opening of the high level talks to find common ground and make concessions. “Business as usual cannot be tolerated,” Ban Ki-moon said. But earlier this week, Figueres put the discussions into context. “We are just barely, barely scratching the surface of what we need to do,” she said. Any agreement in Cancun, she added, “is going to be frankly, pathetically insufficient.”

Expectations have never been high for Cancun. In fact they have been deliberately played down in the hope of giving delegates “breathing room” to clarify what exactly was agreed to in the Copenhagen Accord, to “anchor” these pledges, and to find a way forward. Its highest ambition, in the words of many delegates, is to “make a decision to start a process.” In short, it is a meeting held to guarantee that there is another meeting. 

Despite some signs of compromise, intractable divisions between rich and poor nations remain, there are enough rogue nations to disrupt the process and many negotiators have complained that progress has stalled. Even achieving a "balanced outcome" seems a tall order.

This was more or less confirmed by climate change minister Greg Combet, who in his first press conference said: “These negotiations are complex, they are large and they are difficult. We have got to have realist expectations about the outcome in Cancun this week and I hesitate to predict where we will end up. We are working very hard to ensure that we get some successful building blocks to lead us to a binding agreement. But we are a long way off that yet.”

Combet, in his first international talks, has been thrust right into the heart of the trade-offs between the rich and developing worlds. Combet and his Bangladeshi counterpart Hassan Mahmud have been tasked with finding a way forward on the key question of finance, and it is not proving easy. Poor countries are insisting on a fund that would help unlock $100 billion a year in financing aid be created now, with the details to be worked out later. Rich countries such as the US are insisting on getting the detail right before establishing the fund. 

Mahmud confirmed that finance was being used as a bargaining chip between developing countries seeking on a range of other measures, including an extension to the Kyoto Protocol, adaptation, forests, and technology, and rich nations seeking guarantees on transparency and emissions reductions. “This is a very tough set of negotiations going on here,” Combet agreed.

It promises to be one of the most explosive issues of the last few days. So much so, that Ban Ki-moon will also become involved in negotiations over the next day or two. It's a subject he holds close to his heart, having commissioned a study on the options by the UN and the leaders of Norway and Ethiopia. He said financing was crucial to developing trust between rich and poor nations.

Two strikes and out

The implications of what will happen if there is no balanced outcome was made clear by Combet when he addressed the plenary on behalf of the Umbrella group of nations, which include all non-EU developed nations such as the US, Russia and nearby states, Norway, Canada, Japan, New Zealand and Australia. Combet said it was important to demonstrate that the UNFCCC remains relevant and prove that it can take action to address climate change. “We should not jeopardise this.”

He also touched on one of the more important considerations for developed nations such as the US and Australia, which are experiencing problems implementing domestic policies because of strong opposition at home. “It is essential to reinforce domestic climate change efforts,” he said. Indeed, both Australia and the US realise that it may be more difficult to effect domestic policy without demonstrable progress on the international stage.

Mind you, Combet did appear to gild the lily a little bit. “This is the most substantive emissions reductions the world has ever seen,” he said in reference to the Copenhagen pledges and as justification for the targets set by rich nations, which have been criticised by poor nations as inadequate. Well, yes, they would be the largest emission reductions because they are also the first. Blame it on the multi-country committee that wrote the speech, but it won't go unnoticed in the developing world.

On the subject of the UNFCCC, Alden Meyer, from the US Union of Concerned Scientists, and a long time observer of these talks, says that the outcome of Cancun will be critical. If it fails to deliver on a “balanced outcome” its future is in doubt and it will put pressure on the entire multi-lateral process. “The credibility of the whole UN process is at stake if you have a second failure. Two strikes and you’re out,” he said.

Bangladesh's pressing needs

Combet’s partnership with Mahmud to try and resolve some of the key blocking points at Cancun has given him insight into some of the problems facing one of the world’s poorest and most vulnerable nations. Mahmud held a press briefing today asserting that his country was in fact the most vulnerable nation – threatened by floods, storms, rising sea levels, salinity and even desertification in the north.

Mahmud said Bangladesh wanted an ambitious target of 1.5°C rather than 2°C, and at a very minimum a commitment to the second period of the Kyoto Protocol at Cancun, along with the various elements of the six-pack being negotiated as a platform to take talks forward. On the financing issues that he and Combet are seeking to resolve, Mahmud said it was critical that the fast start financing starts to flow through now – a common complaint of vulnerable countries who say they have yet to see much of the $30 billion promised through to 2012.

And he wanted this financing to focus on adaptation – that has to be a priority for Bangladesh he says. “We have 150 million people at risk, hundreds of thousands are being dislocated. Interestingly Combet is expected to address Australia’s commitment to fast-start financing in a speech later this week, and is likely to outline how Canberra proposes to split the spending between adapatation and mitigation measures. 

Two-track agenda for the Bali roadmap

While much of the discussions are focused on plugging the holes in the Copenhagen Accord, and keeping the Kyoto Protocol afloat, a significant area of progress has been the start of discussions on the form of a legally binding agreement that might one daywould include developing countries.

The much-hailed Bali roadmap created a two track process on how to prolong the Kyoto Protocol that includes rich nations, and how to develop a new agreement that includes poorer nations that could either run side by side with Kyoto or replace it altogether. The problem is that because no one has ever agreed on what they were talking about, the discussions were no more focused than a large dinner party, and often as acrimonious.

Island states tried to get the question of legal form addressed in Copenhagen, to no avail, but now it is finally on the agenda. The island states have the support of South Africa, which wants more clarity before the next COP in Durban next year. Australia, the EU, the US and others would have preferred to let the issue stand for a while longer, fearing it would be a distraction to talks around the six-pack in Cancun, but have not stood in its way.

What needs to be resolved is what is meant by legally binding – what may seem legally binding in China and India might be different elsewhere. Similar problems are being experienced in Cancun just to define how the Copenhagen pledges are “anchored”. One observor says it promises to be a “sh**-fight,” but one that needs to occur. Copenhagen was proof that without an understanding of the rules, there can be no ambition.

Struggling to stay astride

TREV, an electric three-wheeled enclosed bike developed at the University of South Australia, was designed to drive around the globe using just $400 of power, but not to overcome Mexico’s potholes and speed-bumps. “We’ve had a few problems,” admitted Peter Pudley, a senior research fellow in mathematics at the university who helped design the vehicle, “but nothing that has stopped us.”

Trev, which stands for two seater, renewable energy vehicle, and two other similar vehicles arrived in Cancun yesterday after completing the Vancouver to Cancun leg of the “Zero Emission” round-the-world car race. Apart from road conditions, TREV struggled with finding reliable charging points, extreme cold weather in Canada and problems with the motor controller. 

Pudley says the key learnings of the 350kg vehicle is that people don’t need big cars to get round the city. The transport sector accounts for about one quarter of all energy related emissions and  UNEP executive director Achim Steiner said the technology underpinning electric cars and others needs to be harnessed, particularly as the number of vehicles in the world grew by huge numbers. Trev will be on display at the Climate Village before being packed up and shipped over for the final leg in Europe, back to its starting point in Geneva.

*Giles Parkinson will be filing daily from COP16 in Cancun for the duration of the conference. To read the previous dispatch, click here.