Progress seen on "Green Fund" for climate deal-UPDATE 1

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Sunday September 05, 2010 06:35:16 AM GMT

* Green Fund would channel aid to developing nations

* But has to be part of a wider climate package-Mexico

(Recasts with outcome of meeting)

By Alister Doyle, Environment Correspondent

GENEVA, Sept 3 (Reuters) - Almost 50 nations made progress on Friday towards agreeing a "Green Fund" to help poor countries fight global warming but Mexico cautioned that a final deal could only go into force as part of a broader climate package.

Environment ministers and senior officials in Geneva also said that any agreements reached at a U.N. climate meeting in Cancun, Mexico, from Nov. 29-Dec. 10, would fall short of a full legal U.N. treaty.

If texts were agreed in Cancun, countries could decide to build them into a treaty at a later date, perhaps in 2011.

"We think we should be able to establish the Green Fund in the conference in Cancun," Mexico's Foreign Minister Patricia Espinosa said after the Sept. 2-3 talks among 46 nations in Geneva, co-hosted by Switzerland and Mexico.

The fund would oversee billions of dollars to help developing nations shift from fossil fuels towards renewable energies such as wind or solar power and help them adapt to more floods, droughts, mudslides and rising seas.

But Espinosa said any agreement to launch a Green Fund would have to be part of a broad package in Cancun, including ways to share clean-energy technologies and protect carbon-absorbing forests.

"It's important that everyone knows that this is a package negotiation," she told a news conference, adding that meant every element had to be agreed, or nothing. She said she was "encouraged by the level of convergence" at the Geneva talks.

In Geneva, ministers discussed ways to ensure that rich nations, struggling with austerity, keep a pledge made at a 2009 summit in Copenhagen to give poor nations $30 billion in "new and additional" climate aid from 2010-12.

That would rise to $100 billion a year from 2020. Once set up, a Green Fund could oversee flows.

TAXES

Suggested sources of long-term funds include a $2 a tonne tax on carbon dioxide emissions, charges on airfares, bunker fuels or financial transactions.

U.S. climate envoy Todd Stern told a news conference that the meeting had been "pretty constructive".

"The biggest issue is...this has to be part of a package. We are not going to move on the Green Fund, and the $100 billion, if issues central to the Copenhagen Accord, including mitigation and transparency, don't also move," he said.

Stern also reiterated that President Barack Obama was committed to cutting U.S. greenhouse gas emissions by 2020 even though the Senate has failed to pass legislation. The United States is the only major developed nation with no legal cap.

Earlier, the Netherlands launched a new website to help track whether rich countries are keeping the Copenhagen pledge to come up $30 billion in climate aid by 2010-12.

The United Nations-backed site (www.faststartfinance.org) so far lists cash promises by 6 European donors including Germany and Britain and 27 recipients from Bangladesh to the Marshall Islands. Many of the developing nations have blank entries on the amount of aid received.

"I strongly called on other countries to join," Dutch Environment Minister Tineke Huizinga said. Stern said that Washington would also submit data in coming weeks.

Greenpeace accused ministers of being too slow. "Our view is that nothing of what is happening today is really showing the urgency of the problem," Greenpeace's Wendel Trio said.

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