Isra-Mart srl:Ministers arrive in Cancun touting optimistic outlook

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Ministers from around the world will begin to gather in Cancun today for the UN's crucial climate change summit with opinion largely divided on the extent to which the negotiations progressed last week.

Observers said progress had been made on a number of issues, including proposals for improved forestry protection, the formation of a global green fund, and the independent verification of countries' emission pledges.

However, experts also warned the talks remained on a knife edge over the future of the Kyoto Protocol following Japan's surprise declaration that it will not support any extension of the controversial treaty.

There had been reports over the weekend that a number of developing countries led by Bolivia and Venezuela could abandon the talks if the latest version of the official negotiating text dropped proposals to extend the Kyoto Protocol when it expires in 2012.

A walk out was averted when the latest version of the draft negotiating text, released on Saturday, appeared to include many of the demands put forward by developing countries. However, it largely fudged the question over the future of Kyoto and continued to contain numerous sections where agreement has not been reached, raising the prospect of a repeat of last year's Copenhagen Summit where ministers and world leaders arrived to find a draft negotiating text that was nowhere near ready.

Connie Hedegaard, the European climate commissioner who chaired the first week of the Copenhagen Summit, admitted to reporters that the current draft texts being used in Cancun "are not ready to be used by ministers to finalise a deal".

However, speaking before flying out to join the summit, British Energy and Climate Change Secretary Chris Huhne said he was cautiously optimistic that tangible progress could be delivered over the next week.

"We do not underestimate the scale of the task. The negotiations are wide-ranging and complex. In their scope and their detail, they are without parallel," he said. "But the indications are good. Already, the mood has been cautiously positive. People are talking. The show is on the road... On issues such as mitigation, MRV (measurement, reporting and verification), forests, technology and adaptation, we can agree a package of measures that would send a clear signal to governments, investors and people around the world: that the low-carbon transition is affordable, achievable and essential."

His comments came as it emerged the UK delegation has been paired with its Brazilian counterpart in an attempt by the Mexican hosts to break some of the deadlocks that continue to mar the talks.

Mexican Foreign Minister Patricia Espinosa told the summit over the weekend that she had asked pairs of industrialised and developing nations to team up to work on some of the more contentious issues overshadowing the negotiations in a move designed to thrash out a compromise position.

The UK and Britain have been given arguably the most challenging task and have been asked to develop a plan for ending the deadlock over the future of the Kyoto Protocol.

Many developing nations are insistent that Kyoto should be extended as it represents the only legally binding mechanism for curbing emissions from developed nations. However, industrialised nations would generally prefer to see Kyoto replaced with an entirely new treaty that covers all countries, and the stand off has now been forced to the top of the agenda after Japan stated categorically that it would not sign up to any extension of Kyoto.

Meanwhile, Espinosa said Sweden and Grenada would work on proposals for new long term goals for tackling climate change, while Spain and Algeria are to work on plans for adaptation measures, and Australia and Bangladesh will work on proposals for climate finance and technology transfer.

In related news, carbon traders were left disappointed after analyst firm Point Carbon reported that negotiators in Cancun could delay by another year proposed reforms to the UN-backed Clean Development Mechanism carbon offsetting scheme.

The Thomson Reuters-owned firm said that a draft decision on proposals for a new appeals mechanism for emission reduction projects that are refused entry to the CDM revealed that a technical panel would be tasked with reporting back on the scope of a new appeals body at next year's summit in South Africa.

The document also suggests that the CDM's future remains dependent on the future of the Kyoto Protocol, which provides the legal basis for the scheme but is currently scheduled to expire in 2012. The draft rule "recognizes that the continuation of the CDM beyond 2012 will depend on the outcome of the ongoing negotiations process".