It’s not yet a crisis, but an air of anxiety and resignation has descended upon the climate talks in Cancun. There are just two days to go until the end of the conference but it is clear that there will be no miracle agreement that somehow recognises the science of climate change at this meeting. Or anything near it. Ministers and negotiators have enough on their plate just trying to save the process from collapse to be able to focus their attention onto to what it might achieve.

The UNFCCC chief Christiana Figueres, the UN secretary general Ban Ki-moon and Mexico president Felipe Calderon all appealed to delegates at the ceremonial opening of the high level talks to find common ground and make concessions. “Business as usual cannot be tolerated,” Ban Ki-moon said. But earlier this week, Figueres put the discussions into context. “We are just barely, barely scratching the surface of what we need to do,” she said. Any agreement in Cancun “is going to be frankly, pathetically insufficient”.

Expectations have never been high for Cancun. In fact they have been deliberately played down in the hope of giving delegates “breathing room” to clarify what exactly was agreed to in the Copenhagen Accord, to “anchor” these pledges, and to find a way forward. Its highest ambition, in the words of many delegates, is to “make a decision to start a process”. In short, it is a meeting held to guarantee that there is another meeting.

Despite some signs of compromise, intractable divisions between rich and poor nations remain, there are enough rogue nations to disrupt the process and many negotiators have complained that progress has stalled. Even achieving a “balanced outcome” seems a tall order.

This was more or less confirmed by climate change minister Greg Combet, who in his first press conference said: “These negotiations are complex, they are large and they are difficult. We have got to have realist expectations about the outcome in Cancun this week and I hesitate to predict where we will end up. We are working very hard to ensure that we get some successful building blocks to lead us to a binding agreement. But we are a long way off that yet.”

Combet, in his first international talks, has been thrust right into the heart of the trade-offs between the rich and developing worlds. Combet and his Bangladeshi counterpart Hassan Mahmud have been tasked with finding a way forward on the key question of finance, and it is not proving easy. Poor countries are insisting on a fund that would help unlock $100 billion a year in financing aid be created now, with the details to be worked out later. Rich countries such as the US are insisting on getting the detail right before establishing the fund.

Mahmud confirmed that finance was being used as a bargaining chip between developing countries seeking on a range of other measures, including an extension to the Kyoto Protocol, adaptation, forests, and technology, and rich nations seeking guarantees on transparency and emissions reductions. “This is a very tough set of negotiations going on here,” Combet agreed.

It promises to be one of the most explosive issues of the last few days. So much so, that Ban Ki-moon will also become involved in negotiations over the next day or two. It’s a subject he holds close to his heart, having commissioned a study on the options by the UN and the leaders of Norway and Ethiopia.

The implications of what will happen if there is no balanced outcome was made clear by Combet when he addressed the plenary on behalf of the umbrella group of nations, which include all non-EU developed nations such as the US, Russia and nearby states Norway, Canada, Japan, New Zealand and Australia. Combet said it was important to demonstrate that the UNFCCC remains relevant and prove that it can take action to address climate change. “We should not jeopardise this.”

He also touched on one of the more important considerations for developed nations such as the US and Australia, which are experiencing problems implementing domestic policies because of strong opposition at home. “It is essential to reinforce domestic climate change efforts,” he said. Indeed, Australia and the US realise that it may be more difficult to effect domestic policy without demonstrable progress on the international stage.

Mind you, Combet did appear to gild the lily a little bit. “This is the most substantive emissions reductions the world has ever seen,” he said in reference to the Copenhagen pledges and as justification for the targets set by rich nations, which have been criticised by poor nations as inadequate. Well, yes, they would be the largest emission reductions because they are also the first. Blame it on the multicountry committee that wrote the speech, but it won’t go unnoticed in the developing world.

On the subject of the UNFCCC, Alden Meyer, from the US Union of Concerned Scientists, and a long-time observer of these talks, says that the outcome of Cancun will be critical. If it fails to deliver on a “balanced outcome” its future is in doubt and it will put pressure on the entire multilateral process. “The credibility of the whole UN process is at stake if you have a second failure. Two strikes and you’re out,” he said.

*Read the rest of this article here — and more from Cancun — on Climate Spectator