Almost 200 nations sought on Wednesday to break a deadlock between rich and poor on steps to fight global warming and avert a new, damaging setback after they failed to agree a UN treaty last year in Copenhagen.
Several environment ministers said that failure at the talks in Mexico could undermine faith in the ability of the United Nations to tackle global problems in the 21st century as power shifts toward emerging nations led by China and India.
"I think that what is at stake here is also multilateralism," said European climate commissioner Connie Hedegaard. "It's absolutely crucial that this process, which is the only one we have ... can prove that it can deliver results."
The talks in this Caribbean beach resort of Cancun from Nov 29 to Dec 10, have more modest ambitions than at Copenhagen last year, but there are still yawning gaps over the future of the Kyoto Protocol for curbing greenhouse gas emissions by rich nations until 2012.
Japan, Canada and Russia say they will not extend the pact unless poorer nations also commit to emissions cuts. Developing nations, especially Bolivia, insist the rich world must lead by setting deeper cuts beyond 2013 before they take on curbs.
"I believe that an ambitious, broad and balanced package is within reach," Mexican foreign minister Patricia Espinosa told delegates. "That does not mean that we already have it in our grasp."
China also saw some signs of hope on Kyoto. Assistant foreign minister Liu Zhenmin, asked if there was room for a deal, told Reuters: "I think that will be possible. That is still under discussion."
Negotiators want to set up a new fund to help developing countries combat climate change, work out ways to protect tropical forests, help poor nations adapt to climate change and agree a new mechanism to share clean technologies.
Failure to achieve even those modest steps would be a blow after US president Barack Obama and other world leaders could only manage a vague, non-binding deal in Copenhagen in 2009, when many had pinned hopes on a treaty.
"A car crash of a summit is in no one's interest," said British climate change secretary Chris Huhne.
One senior delegate said there was progress on several core issues but other hurdles could arise. Small island states, for instance, want the talks to set an end-2011 deadline for agreeing a treaty, an idea opposed by Beijing and Washington.
Some countries linked deadlock in Cancun to Obama's failure to pass US legislation to curb climate change. All other industrialized nations have already capped their emissions under the Kyoto Protocol.
"We cannot afford to be held hostage by the political backwardness of one developed country," said Tuvalu's deputy prime minister, Enele Sosene Sopoaga. "This is life and death, a survival issue for Tuvalu," he said of rising sea levels.
Confidence in the UN talks has already been hit by Copenhagen, which agreed only a non-binding deal to limit a rise in average world temperatures to below 2 degrees Celsius (3.6 F) above pre-industrial times.
Without success in Cancun, faith in the seemingly endless UN talks, which require unanimous support for any accords, could wither away.
Separately, Wal Mart Stores Inc, the world's biggest retailer, said it would step up checks that its palm oil and beef come from sustainable sources.
And small island states urged new insurance mechanisms to help cope with storm surges and rising sea levels. "We need a loss and damage insurance. Those who are doing the damage should pay," Kiribati president Anote Tong said.