Copenhagen (Platts)--14Dec2009/526 am EST/1026 GMT

The Copenhagen climate conference is at midpoint "and we still have a daunting task ahead of us," Danish environment minister and conference president Connie Hedegaard said this weekend.

"The time factor is a huge challenge," she told a press briefing.

The Bella Center, the conference site, was closed to the press and non-government groups on Sunday, but beyond the security fence and police barriers, delegates met to try to resolve a series of difficult issues.

Many of the key disputes are carried forward from previous climate negotiations, and underscored in Copenhagen by a sharp exchange between China and the US, the world's top two emitters of greenhouse gases, about financing and emission reduction targets.

Five days remained Sunday before the scheduled conclusion of the talks December 18. With more than 100 heads of state and government, including US President Obama, planning to attend, negotiators are under intense pressure to produce an agreement the leaders can embrace and sell politically in their respective countries.

Leaders do not want to travel from around the world to such a high-profile event and associate themselves with a failed negotiation.

Environmental ministers will work with negotiators this week to produce a final text that can be given to the leaders for final approval at week's end.

However, the problem here as at previous conferences is that meeting the demands and needs of 190 countries with diverse economies, development agendas, energy requirements, climate threats and political systems is extraordinarily difficult.

Perhaps the signal achievement last week was the release of drafts by the chairmen of two key UN panels that reduced about 200 unwieldy pages of proposals into eight.

Connie Hedegaard called the release of the proposals "good news." With the text on the table, "consultations can now be more specific," Hedegaard told reporters Saturday.

The text calls for industrial countries to reduce their greenhouse gas emissions by between 25% and 40% below 1990 levels by 2020. The emission reductions would be binding. The upper range of that target exceeds what most developed countries are prepared to agree to, especially the US where legislation pending in Congress would reduce US emissions, at most, only 4% below 1990 levels.

The proposed target in the draft proposal is intended to keep global temperatures from rising no more than 1.5 to 2 degrees Celsius (2.7 to 3.6 degrees Fahrenheit) from pre-industrial levels.

Under the proposal, developing countries would cut their emissions 15 to 30% by 2020, compared to business as usual. But the text reads that developed countries "shall" make legally binding emission cuts while developing countries "may" take voluntary action.

As such, that section of the proposal is a non-starter for the US, said lead US negotiator Todd Stern. It is not the basis for a sound agreement, he said last week, noting that developing countries, and in particular China, would be responsible for 90% of the world's emission growth in coming decades.

"This is a basic element of a deal for the United States, so we don't think that particular section of the text is an acceptable starting point," Stern said.

The Kyoto Protocol, which mandated emission reduction targets for industrial countries and exempted developing countries from mandatory cuts, represented "old think," he said.

The Obama administration is advocating a new international regime to replace Kyoto under which countries would agree to national "schedules" for mitigating emissions, subject to international verification.

Stern also sparked a diplomatic firestorm when he said that any money the US provides to a fund financing mitigation efforts in developing countries should not go to China. Stern subsequently said he meant public money as opposed to private funds that would be generated later by the sale of emission allowances. The private investments "can go in all sorts of directions," Stern said.

Chinese Vice Foreign Minister He Yafei said that Stern lacked "common sense or [was] extremely irresponsible." He also suggested that China would not yield to demands to have its programs to reduce emissions subject to international inspection and verification. "It's a matter of principle," he said.

The text on long-term financing of developing country adaptation and mitigation efforts, as well as emission targets, is a forest of square brackets, indicating lack of agreement. Additional proposals from blocs of countries are expected this week.

However, Stern told reporters Friday, "I absolutely think there's a deal to be done here. I don't think there's a deal in the bag. That's a totally different matter."

--Gerry Karey, gerry_karey@platts.com