CANCUN: Global talks on climate change looked set early Saturday to set up a new global fund to manage billions of dollars in aid to poor nations in a hard-fought package urging deep cuts in industrial emissions.
After two weeks of talks in Mexico and two virtually sleepless final days, more than 190 countries met to consider a proposal that leaves open an extension of the Kyoto Protocol whose requirements expire in two years.
"We have seen remarkable progress," said Mexican Foreign Secretary Patricia Espinosa, who won wide praise for her steering of the talks in resort city of Cancun a year after the chaotic Copenhagen climate summit.
Bolivia, which has likened climate change to genocide, criticized the proposal. But the vast majority of countries indicated they would support the deal in a late night session.
Australian Climate Change Minister Greg Combet called the deal a "historic step forward." Mohamed Aslam of Maldives, the archipelago that fears for its very existence from rising water levels, said: "If you hear the applause in the audience, you can feel the mood."
Chief US negotiator Todd Stern said the deal "while not perfect, is certainly a good basis for moving forward," voicing hope it would "put the world on a more hopeful path toward a low-emissions and sustainable future."
Haunted by the lessons of Copenhagen, Mexico focused on incremental progress rather than an ambitious full and binding climate treaty, which could come back up for discussion at the next major talks in late 2011 in South Africa.
In a key area, the agreement would set up a "Green Climate Fund" to administer assistance to poor nations, which many experts say are already suffering more floods and drought as temperatures steadily mount.
The fund would be steered by a board of 24 members chosen evenly from developed and developing nations. For the first three years, the new international organization would be overseen by the World Bank -- a point of controversy for some activists who distrust the Washington-based lender.
The European Union, Japan and the United States have led pledges of 100 billion dollars a year for poor nations up to 2020, along with 30 billion dollars in immediate assistance.
A broader issue is just how wealthy nations would raise the money, with some negotiators advocating levies on airplane and shipping fuel.
The draft calls for "urgent action" to cap temperature rises at no more than two degrees Celsius (3.6 Fahrenheit) above pre-industrial levels and asks for a study on strengthening the commitment to 1.5 degrees Celsius.
The proposal says it "recognizes that deep cuts in global greenhouse gas emissions are required according to science." Scientists blame such mostly industrial emissions for global warming.
The accord at last year`s chaotic summit in Copenhagen included similar language, but it was never approved by the full UN-led talks.
The Cancun talks were stuck for days over the fate of the Kyoto Protocol, the landmark treaty whose obligations on wealthy countries to cut emissions run out at the end of 2012.
With a new treaty looking distant, the European Union led calls for a new round of commitments under Kyoto.
Japan opposed a new Kyoto round, pointing out that the treaty named after its ancient capital covers only 30 percent of global emissions because top polluters including China and the United States are not part of it.
In a compromise, the proposed Cancun agreement calls for work on a second period of the Kyoto Protocol "to ensure that there is no gap" but does not oblige countries to be part of the new round.
Japan faced intense pressure to compromise, with British Prime Minister David Cameron early Friday telephoning his counterpart Naoto Kan, diplomats said.
The Kyoto Protocol makes no demands on emerging economies to curb emissions. China has refused to be subjected to a treaty, although India in a surprise shift in Cancun said it would at least consider binding action in the future.
Environmentalists were mostly positive. Tim Gore of anti-poverty movement Oxfam welcomed the Green Climate Fund and said the draft Cancun accord "breathes new life" into UN-led talks on climate change.
The agreement also helped spell out ways for wealthy nations to help developing states preserve tropical forests -- a crucial way to combat climate change as lush vegetation counteracts pollution.
BDST: 1744 HRS, December 11, 2010