As we head into the final frantic days of Copenhagen, all the work has boiled down to draft negotiating texts for the two streams of negotiations - the Kyoto stream and the non-Kyoto stream (known as KP and LCA, or long-term cooperative action). The two streams were separated at the Montreal meeting, after the Kyoto Protocol came into force, as a way of keeping non-Kyoto countries in the tent, but, if there is to be agreement here, the streams must now be brought together in a way which will satisfy the competing interests of all the countries and negotiating blocs involved.

A thumbnail sketch would show the world divided into three general blocs with broadly aligned positions:
• Rich countries, including Australia, who effectively want to end the Kyoto Protocol - they will not sign a binding agreement here unless China and other large developing nations take on binding targets, an attitude seen by those latter as a breach of the fundamental principles of the Kyoto Protocol;
• The large developing nations such as China who want to retain the Kyoto Protocol and who will not take on binding targets unless the rich nations accept deep cuts targets first - along the lines of 40% below 1990 levels by 2020 - and agree to substantial financing packages; and
• The poorest developing nations, including sub-Saharan Africa and the small island states, who are calling for the retention of the Kyoto Protocol and an additional legally binding protocol to include commitments from China, India etc. They want both of the other groups to get serious and take on the kind of targets that are necessary for their survival.

It is feasible that we could see a political agreement here between the rich nations and the large developing countries, but such an agreement would be essentially worthless as it could be no more than a rubber-stamping of the inadequate offers currently on the table - offers that have been calculated as leading to carbon concentrations in the atmosphere in the order of 750ppm, a recipe for climate chaos with 4C warming this century. Not only would the agreement be worthless, but it would also be bankrupt from the start, as the poorest nations will simply not sign it.

The only way imaginable to achieve an agreement that brings all parties together is for rich countries like Australia to finally bite the bullet and take on the kind of targets that the science requires. Once we do so, China has indicated that it will also move to accept binding targets, albeit with different commitments. That may not be enough to put the world on track to a 350ppm safe climate outcome, but it will put us within cooee of it and, thus, will satisfy the least developed countries. The world could get moving.

Whilst the draft texts that are currently on offer are better than many had expected, they do not achieve any of this. Before looking in detail at these texts, it must be said that the tremendous effort made by Tuvalu in presenting its draft text has had a huge impact on the conference, ensuring that the level of ambition on targets, financing and commitment that Tuvalu set out is now part of the mainstream discussion instead of at the sidelines. The final text will have to move far closer to Tuvalu's position if it is to be agreed.

The LCA draft text has been welcomed in general terms by developing countries but been criticised by Kyoto Parties and the USA. Critically, the draft contains reference both to the 2C objective and the 1.5C objective raised by Tuvalu, AOSIS and African nations. It includes bracketed targets [options inserted for discussion but not finalised] for developed nations from 25% all the way up to 45% by 2020, all on the vital 1990 baseline. [It should be noted here that the lowest option is slightly above Kevin Rudd's highest offer of 24% below 1990 levels by 2020]. It would also require those targets to be met primarily through domestic efforts, rather than the exported emissions reduction plans embodied by the Rudd Government's CPRS, for example.

The text sets out that developing country emissions reductions, to be supported by new and additional financing (over and above existing overseas development aid) from developed countries, would be subject to measurement, reporting and verification.

On the negative side, the long term targets in the LCA text are aspirational only, there is no set year for emissions to peak, no timetable for the agreement to be made legally binding, and there would be no opportunity for review of the agreement until 2015. The IPCC's 5th Assessment report is mentioned in that context, although it would only be there to inform the review, not to act as its basis.

Australia and the EU have criticised this text as not giving certainty for limiting warming to 2C, since it would not bind large developing nations to given emissions trajectories. This criticism is absolutely true, but it is also dripping with hypocrisy in that the targets both Australia and the EU have on the table are far too weak to achieve a 2C limit, and it is in no small part those weak targets which are preventing certainty being achieved.

The small island states have also highlighted the importance of achieving a legally binding outcome for developed and developing countries, but developing nations as a group are strongly behind the ongoing two track approach of the Kyoto Protocol, binding developed countries but not developing countries

The precedence given to the LCA stream over the Kyoto Protocol stream led to the walk out of the developing countries in the last 12 hours. They see it as a stitch up by rich nations to get a 'political' deal at the expense of the Kyoto Protocol.

The KP working group text, interestingly, contains even stronger targets than the LCA - aggregate emissions reductions from developed countries of 30-45% below 1990 by 2020. It is just as well the CPRS was rejected, or Australia would simply be unable to legitimately take part in this discussion, having ruled out anything above 24% cuts.

Other positive aspects of the KP text include the option of discounting credits earned from international trade through the CDM, or clean development mechanism. That would encourage more emissions reductions to be met domestically. There are also good proposals for adaptation funding.

However, there are very significant negatives in the potential inclusion of nuclear power and carbon capture and storage from coal in the CDM as well as the very dodgy deals on land use, land use change and forestry (LULUCF) that Australian negotiators are up to their necks in. In particular, Australia is fighting for the abandonment of the 1990 baseline, wanting countries to be able to set their own baseline based on business-as-usual. That is a recipe for accounting rorts on a massive scale, allowing countries to ‘meet' stringent emissions reduction targets simply with the stroke of a pen. This has been strongly criticised by developing countries including PNG, who told the conference that, of all the options that had been discussed, only the most fraudulent option remains on the table. PNG, however, is playing a destructive role in the REDD negotiations (effectively the LCA parallel to the LULUCF in the KP stream) ,wanting text that includes conserving forests, protecting indigenous rights and improving forest governance relegated to non legally binding status so that it retains the option of logging forests if there is not enough money from developed countries on the table to conserve them.

Although inching progress is being made, the UN and world leaders will have trouble selling a political outcome that declares some kind of success. It is clear that, after Tuvalu's intercession last week, no outcome can be seen as a real success unless it matches that high level of ambition. There is a long way to go before we reach that point, and it is hard to see it happening in the next three days.