From: Arvind Kumar
Another sticking point is whether the climate funds should be loans or grants.
The European Union said on Tuesday that it would honor it's Copenhagen pledge by mobilizing 2.2 billion euros (2.9 billion dollars) out of the EU's 7.2-billion-euro promise of "fast-start" financing, aid for climate projects in poor countries by 2012.
But half of the EU's funding would involve loans instead of grants to the poor, a move quickly criticized by environmentalists, who say loans were the wrong tool for industrialized societies to help poorer countries that have not caused global warming but are feeling its effects.
"That would be the same as if I take my car and I drive it into your car, and then I offer you a loan to repair the damage," said Tove Ryding of Greenpeace.
The EU's chief negotiator in Cancun, Artur Runge-Metzger, defended the use of loans as helpful for many clean energy projects that had high start-up costs but would actually save money over time.
Runge-Metzger said the loans would only go to countries that were not highly indebted already, thereby making sure that borrowers could pay the money back, without pushing debt-ridden governments further into trouble.
While some of the repaid loans would go back into other climate projects, he acknowledged some of the money could also flow back to cash-strapped EU budgets.