The UN climate conference here today reached a "compromise" to set up a $100 billion “Green Fund” to fight global warming, a decision India described as an "important step forward", but there was no agreement on extending the landmark Kyoto Protocol on emissions cuts beyond 2012.

"Confidence is back, hope has returned," host Mexican President Felipe Calderon said, minutes after a set of decisions was adopted at the end of the two-week conference of ministers from nearly 200 countries. Environment Minister Jairam Ramesh noted that the major emerging economies-Brazil, South Africa, India and China (BASIC)-had welcomed the decision.

“We are very happy with the text,” he said. "Cancun represents an important step forward." Progress at the conference includes a broad agreement on technology-sharing mechanism that will ensure that poor and vulnerable countries are able to access green technologies easily and in a cost-effective manner.

A 'Green Fund' has been set up that is expected to mobilise $100 billion per year by 2020, which will be given to developing countries for adaptation and mitigation purposes.

The decisions reached in this conference will be followed up in negotiations next year, and it is hoped that a legally binding treaty emerges at the next climate meet in Durban, South Africa. Bolivia was the sole country to oppose the decision in Cancun, but was eventually overruled.

Many of the contentious issues had been bypassed to reach compromises in Cancun. For instance, no number had been given for further emission reductions under the Kyoto Protocol and there was no commitment to continue the Kyoto Protocol after it expires in 2012.Some groups here said that it is a "weak" text that will eventually lead to the death of Kyoto Protocol, the only treaty that imposes legally binding cuts on developed countries. Others said that it is a workable "compromise" for the moment.

"Space has been given to dump the Kyoto protocol. The text allows for creation of new market mechanisms for carbon trading which could be built of the existing market mechanism under the Kyoto Protocol," said Chandra Bhushan, from the Centre of Science and Environment.

Ramesh said that many of India's contributions had been incorporated in the text, including the International Consultation and Analysis, which is a transparency mechanism to review whether developing countries are carrying out their domestic mitigation actions.The minister pointed out that under the current texts, developed countries were subject to stricter scrutiny on their mitigation cuts than developing countries.

Observers also said that while the two texts may be considered a significant political step in moving the negotiations forward, they were not really helpful in combating climate change and the compromises were not rooted in what the science demanded.

Everyone, however, appreciated the efforts of Mexican Foreign Secretary Patricia Espinosa, who worked for two weeks to ensure transparency in the process and help countries work through their differences. She received multiple standing ovations today and Ramesh even compared her to a goddess.

The talks were hailed by observers as a boost for "multilateralism" in climate talks, which had waned following the negotiations in Denmark last year after being marred by a great deal of mistrust between developed and developing countries. The Cancun deal appears to have pacified the US and China, which had been at loggerheads throughout the meet on methods for monitoring and verifying actions to curtail greenhouse gases. "On the 'Green Climate Fund', the Cancun decision does not identify specific sources of financing, which will be subject to continuing talks.

Other main components of today's decisions included promotion of efforts in poorer nations to protect their climate-friendly tropical forests, with the prospect of financial compensation from richer nations. The final text contained vague compromise language on financing, monitoring and oversight.

The meet decided to establish a Technology Executive Committee under the treaty to analyse needs and policies for transfer to developing nations of technology for clean energy.