Funding for emissions cuts and adaptation measures in developing countries remains a major stumbling block in the run-up to December's UN climate conference in Copenhagen, where a new climate treaty is due to be agreed.
In an attempt to regain leadership in the negotiations, the European Commission last week put the first concrete figures for global funding on the table, suggesting that the EU would commit an annual 2-15 billion euros of public money.
National capitals are yet to accept the figures put forward by the EU executive, and at this stage discussions are most likely to concentrate on upfront financing.
Leaders are expected to clarify the EU's position on how much money could be offered to developing countries before 2012 and whether the EU intends to push for a commitment to short-term funding in Pittsburgh, sources following the negotiations told EurActiv.
The Commission estimated that around €5-7 billion would be needed between 2010 and 2012. It recommended the EU to provide at least €500 million and up to €2.1 billion a year, starting from next year.
Moreover, observers are expecting heads of state and government to discuss what weight should be given to the two principles - responsibility for emissions and GDP - that the EU wants to use for calculating financial burden-sharing among developed nations.
The Commission's calculations show that the larger the weight given to responsibility for emissions, the better off the EU would be.
The sources said the summit will likely discuss governance arrangements on the basis of the Commission's proposal. This foresaw channelling aid through existing institutions, topped up with a central coordinating body to oversee the process.
The Swedish EU Presidency hopes to hammer out the details of the Union's position, including concrete figures, at the October European summit.
Transatlantic rift threatens climate deal
The informal summit takes place amid warnings from European officials that key differences between the EU and the US could lead to a breakdown in the international negotiations.
The EU is at loggerheads with the US over how national CO2 reduction targets would be counted under a post-2012 treaty, EU sources close to the negotiations told a British newspaper.
While Europe wants to retain the architecture set up under the Kyoto Protocol, the Obama administration has told their European colleagues that they intend to replace the protocol's structures with their own.
"In Europe we want to build on Kyoto, but the US proposal would in effect kill it off," a European official said. They warned that this could undermine the new treaty, crippling the world's ability to halt dangerous climate change.
"If we have to start from scratch then it all takes time. It could be 2015 or 2016 before something is in place, who knows," the source said.
Despite the differences, the EU is cautious about openly criticising the US, which joined the negotiations with ambitious plans to pass domestic climate legislation after the election of President Barack Obama. But the new administration is not keen to accept the Kyoto architecture, as former president George W. Bush refused to ratify the protocol on the grounds that it did not set any obligations on China.
Scientists have been stressing the urgency of tackling global warming and regard the UN climate conference in Copenhagen in December as the last-chance saloon for keeping temperature hikes at sustainable levels.
It is widely recognised that the 2°C threshold set by the Intergovernmental Panel on Climate Change (IPCC), a UN scientific body, will be severely overstepped without immediate action.
If each country were allowed to set its own rules for meeting its emissions reduction targets, this would open loopholes and allow them to avoid making genuine CO2 cuts, officials said.
Still time?
But the US has cautioned its negotiating partners that the United Nations Framework Convention on Climate Change (UNFCCC) in Copenhagen in December is not a "make-or-break" event.
According to reports from Vienna yesterday (15 September), US Energy Secretary Steven Chu argued that it would be possible to come back and fill in the details that cannot be agreed in Copenhagen. Moreover, he said that the world should not expect overly ambitious commitments to slash CO2, Reuters reported.
"What the United States can bring and can agree to is certainly unknown, but I think probably 40 or 30% [cuts] might be too aggressive for 2020 for the United States," he said.
The EU is the only region which has set ambitious short-term binding targets to cut emissions. But even its offer to up its 2020 goal to 30% below 1990 levels if other industrialised countries make similar pledges falls far short of developing countries' demands of 40%.
