EU leaders closing in on climate breakthrough

World leaders gathering at parallel UN and EU climate change talks in Poznan and Brussels have today signalled confidence that significant progress can be made before the respective summits draw to a close.

Reports had claimed that Germany was seeking to water down the EU's climate change action plan at the Brussels summit in an attempt to protect its heavy industries.

But speaking to news agency Reuters German Chancellor Angela Merkel said she remained hopeful that a deal would be reached on the legislative package designed to meet the EU's target of cutting emissions 20 per cent by 2020.

"I am cautiously optimistic that we will manage to have a good result that can send a good signal to the Poznan climate conference," she said.

A loose coalition of eastern European states, led by Poland and Hungary, are still reportedly opposing elements of the plan that they claim would hamper their coal-based economies.

Other member states are attempting to win them round with the promise of a multi billion Euro "solidarity fund" that would see some of the revenue raised from the auctioning of carbon credits diverted to fund low carbon projects in eastern Europe.
However, Dutch prime minister Jan Peter Balkenende told reporters at the summit that there would be a limit on the size of the fund. He also said that the over-arching target of cutting emission by 20 per cent was non-negotiable and would almost certainly be retained in any final deal.

Should an agreement be reached in Brussels it will provide a major boost to the UN talks in Poznan, where delegates were already celebrating the announcement that Mexico is to become the first large developing country to set a specific emissions reduction target.

Mexico's environment secretary Juan Rafael Elvira told the conference that the country would halve greenhouse gas emissions by 2050 based on 2002 levels and laid down a direct challenge to other emerging economies to follow its lead.

He added that the target would be met through a huge expansion in renewable energy capacity and also outlined plans for a domestic cap-and-trade scheme to be introduced by 2012.

The move will be seen as hugely significant by negotiators as it provides further evidence that emerging economies are willing to embrace emission reduction targets should developed countries do the same.

Costa Rica has previously pledged to become carbon neutral by 2021 under a UN scheme and China and several other developing countries have developed climate change action plans, albeit without stated emissions targets. But Mexico's announcement makes it the first large emerging economy to deliver specific emission reduction goals largely in line with the climate change science.