As haggard negotiators left the UN climate change conference in Lima in the early hours of Sunday morning, many observers noted the contrast between the political acrimony that characterised the final days of these tortured discussions and the sense of optimism that many felt going into the talks just a fortnight earlier.

Foreign Minister Julie Bishop delivering the Australian National Statement at the UNFCCC Conference in Lima, Peru, 10 December 2014

That initial optimism had resulted primarily from the joint announcement by the US and Chinese presidents at the conclusion of the APEC summit in mid-November concerning their national goals for curbing greenhouse gas emissions and expanding non-fossil-fuel energy production. That agreement formalised important strategic shifts in the world's two largest emitters concerning the future structure of their economies, and demonstrated a new-found cooperative pragmatism that has eluded international climate efforts for more than two decades.

But the Lima conference reminded the world that high-level political cooperation on climate change among key countries does not necessarily translate into agreement among environmental officials and diplomats from the 195 countries that participate in the UN Framework Convention on Climate Change. 'Planet UNFCCC' operates at its own pace, according to its own logic, and in its own opaque language.

So what happened on Planet UNFCCC in Lima?

Optimistic observers had hoped that Lima wold produce a draft agreement text for next year's key Paris conference next year. A draft is being developed, and the final decision in Lima includes an Annex with the 'Elements of a draft negotiating text' (from page 5) which reflects a variety of different options proposed by the parties. There are some promising proposals in there, but it remains to be seen whether the best options will remain after the interests of all 195 countries are reflected in the text.

The more realistic observers expected that the Lima conference would result in a hard decision on one particular set of issues.

At last year's Warsaw conference, it was agreed that countries must submit their post-2020 emissions reduction targets, policies and measures — their so-called 'Intended Nationally-Determined Contributions' or INDCs (I did warn you about the language!) — in the first quarter of 2015, so as to enable a mutual assessment of countries' ambition well ahead of next year's vital Paris conference. Many expected that Lima would produce a decision on the form of information that countries must provide in their INDCs (the substance is ultimately, as the name suggests, 'nationally determined', though to some extent the form shapes the substance).

However, even this narrower focus opened up decades-long debates about the 'differentiated responsibilities' of developed and developing countries. Many developing countries argued that the developed countries should adopt INDCs far more onerous than those on developing countries, that the assumptions underlying developing-country INDCs should not be subjected to the same degree of transparency and review, and that developed country INDCs should incorporate not only direct emissions reductions but also financial and other assistance to developing countries.

Ultimately, countries could not agree on mandatory rules or guidelines concerning these matters of form. The final agreed outcome from Lima (see paragraph 14) merely lists the matters that parties 'may' include in their INDCs, and (at paragraph 12) 'invites' parties to 'consider' incorporating an adaptation component. There is no mention of incorporating a financial support component (finance is addressed separately in paragraph 4).

The substance of developed-country commitments of support for developing countries was a further key area of contention in Lima. It has long been expected that developed countries will assist developing countries with finance to reduce emissions and adapt to already-occurring climatic changes, and also with clean technology and capacity-building assistance. In 2009, developed countries pledged to mobilise (from a combination of public and private sources) $100 billion annually for this purpose by 2020. Around $10 billion in aggregate was pledged to the Green Climate Fund (the main vehicle for UNFCCC-related finance) as of last week, to be distributed over coming years. Many developing countries remain dissatisfied with this contribution. This issue is likely to remain a sticking point through to Paris.

A number of other issues that were inadequately addressed in Lima will be important if Paris is to be a modest success. The first is agreement on a long-term (aspirational) goal that provides clearer guidance to the world's citizens and investors about the direction of the global economy than the current (ambiguous) 'less than 2°C warming' goal: many (me included) are arguing for a goal of 'net zero global emissions' as early as possible within the second half of this century. An intermediate goal of establishing a zero carbon energy system (or, at least, a zero carbon electricity system) by 2050 would send an even more powerful signal, and should be seriously considered.

Given that the aggregate effect of INDCs associated with any Paris agreement will inevitably fall well short of achieving this goal, it will be important that the Paris agreement contain a framework for the regular review and strengthening of countries' mitigation ambition (and of adaptation and support). Rigorous transparency requirements, so that countries' contributions can be clearly understood and subjected to international scrutiny, will also be important for building mutual trust and confidence. Given that domestic institutions, laws and policies determine the credibility of countries' contributions (much more so than whether these are 'internationally legally binding'), transparency in these areas will be increasingly important.

Leaving Planet UNFCCC, it is clear from Lima that even modest success in Paris next year will require deep engagement by governments throughout the next 12 months (well beyond the UNFCCC inter-sessional meetings). Heads of state/government — many of whom have clearly demonstrated in recent months their desire to contribute meaningfully to a new agreement — will need to be closely involved in negotiations if entrenched positions are to give way to reasonable compromise. And, as I argued in a recent paper, smaller groups of countries should be prepared to announce in Paris cooperative initiatives that complement and go beyond what will be at best a 'broad but shallow' agreement that emerges from the formal UNFCCC process.

This need for narrower, more intensive and politically pragmatic engagement illuminates the extent of the missed opportunity that was the G20 summit in Brisbane last month. By artificially attempting to exclude climate policy from discussions about short- to medium-term economic reforms, the Abbott Government contributed to the continued exile of climate change on Planet UNFCCC. It did so despite the strong evidence that well-designed climate policy can induce local investment in infrastructure, radical improvements in resource productivity, and innovation that grows economies while improving energy security and building healthier, more attractive and less polluted cities — quite aside from the long-term and global benefits of reduced risks from climate change itself.

The Abbott Government refuses to acknowledge these important linkages between national action on climate change and economic and social improvements for the vast majority of the world's people — linkages that, if better understood, would make international cooperation much easier than it seems on Planet UNFCCC. Notwithstanding its reluctant $200 million contribution to the Green Climate Fund, Australia remains a climate change pariah that puts the interests a handful of multinational fossil fuel companies ahead of Australians' medium term economic prosperity, let alone the long-term habitability of the planet.

Progress in Lima was disappointing, but there is a much that can be done over the next 12 months to ensure that Paris yields a decent framework for accelerated climate action. If that fails to happen, few will hesitate to point the finger at countries like Australia, the Colossal Fossil of 2014.

Photo courtesy of Department of Foreign Affairs and Trade.