EYES ON 2012

The talks are taking place under the banner of the UN Framework Convention on Climate Change (UNFCCC), gathering 194 parties. The ultimate goal is a post-2012 pact on curbing greenhouse gases and aiding to countries badly exposed to climate change. This accord notoriously eluded the December 2009 UNFCCC summit in Copenhagen, and the hope now is to advance pragmatically, perhaps reaching an overall deal in December 2011 in Durban, South Africa.

COMPLEX TWIN-TRACK PROCESS

There are many issues on the table, all of them touching on major economic and national interests. This makes the task of getting an overall deal very tough, as decisions must be reached by consensus. The horse-trading is made more difficult as there are two negotiating arenas, which themselves are interlinked.

One track gathers all UNFCCC members, for so-called Long-term Cooperative Action, or LCA. The other comprises all the parties to the Kyoto Protocol, which was abandoned by the United States in 2001.

"LCA" NEGOTIATIONS

Under pressure to restore faith in the UN process after Copenhagen, countries are being urged to advance on:

- launching a new financial vehicle, unofficially dubbed the Green Fund, to help poor countries cope with the impact of climate change. It could be the main source for aid, promised in Copenhagen, that could reach 100 billion dollars a year by 2020. Poor countries want the UNFCCC to be the Fund's manager, suspicious of US efforts for the World Bank to be in charge.

- agreeing on ways to measure and monitor countries' actions, including emissions curbs. Progress has been made between China and the United States in smoothing an agreement, but thorny details remain to be sorted out.

- offering a financial carrot to tropical countries so that they preserve their forests rather than cut them down. Logging and land clearance have accounted for between 12 and 25 percent of global emissions annually over the past 15 years. The so-called REDD scheme has made headway, despite concerns over how to make it work in practice and preserve environmental integrity.

There has been little talk about two of the most explosive issues: how to ratchet up national pledges on carbon emissions and crafting the legal architecture for climate promises. These are likely to be postponed until 2011.

The mood in the LCA track has sometimes been soured over how to include the "Copenhagen Accord," the controversial document crafted by a couple of dozen leaders in Copenhagen but never adopted by the full UNFCCC.

KYOTO PROTOCOL

The biggest threat to the Cancun talks is a row over the UNFCCC's Kyoto Protocol, the only treaty to set down legally binding targets for cutting greenhouse-gas emissions.

The Protocol establishes commitments for industrial economies that would reduce their total emissions of six categories of greenhouse gases by "at least" five percent by 2012 compared to 1990.

But China, the world's No. 1 polluter, is not included as it is a developing country. Nor is the United States, No. 2 emitter, which walked away from the Protocol in 2001.

At the start of talks, Japan declared it would not signed up to a second commitment period after the first roster of pledges expires at the end of 2012. It said there was no sense in having an agreement that only covers less than 30 percent of global emissions.

This has sparked fears of a rush for the exits by other industrial countries, including Canada and Russia. The EU says it can accept a second commitment period for eight years, provided China and the US put forward ambitious and verifiable pledges under the LCA track.

Developing countries are dismayed. They like Kyoto's tough, legally binding provisions and are suspicious of the voluntary, "pledge-and-verify" approach under the LCA track. Without a deal on a second Kyoto commitment, there's no chance of a package in LCA, say the fiercest of these critics.

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