independent

Britain and France back tax on financial transactions to support poor countries while Ethiopian plan would also impose levies on airline and shipping industries

Ethiopia, one of Africa's poorest countries, last night put forward a radical multibillion-dollar plan to break the continuing deadlock at the UN climate talks in Copenhagen – which was immediately taken up by Gordon Brown and Nicolas Sarkozy.

The proposal, from Meles Zenawi, Ethiopia's long-standing ruler who is now one of Africa's elder statesmen, concerned one of the crucial sticking points in the negotiations for a new treaty to fight global warming, which have to end on Friday – the financial deal which must be a key part of any new climate agreement.

Rich countries have agreed in principle that they will create a massive new international Climate Fund to help poor countries cut their carbon emissions and adapt to the damage likely to be caused by climate change but negotiations are stuck on who should contribute and how much.

Mr Zenawi, who arrived in Copenhagen last night to represent the 53 member states of the African Union at the talks, suggested that much of the money could be raised by new taxes on aviation and shipping and an innovative global tax on all financial transactions – known as a "Tobin tax". Research has suggested that such a tax could raise up to $100bn a year.

Mr Zenawi also wants a commitment to long-term finance, to 2020, above and beyond the $30bn "fast start" money for the next three years which the conference is likely to approve, and a further commitment to "additionality" – a guarantee that any promised climate cash will not come out of existing aid budgets.

Mr Brown, who worked with Mr Zenawi when he was Chancellor on the Commission for Africa, accepted the plan with alacrity and issued a statement supporting it just before he left for Copenhagen himself, where he is to have talks with other world leaders over the next three days.

"I believe these proposals offer a basis for agreement in Copenhagen on the difficult financing question which lies at the heart of the talks," he said.

"Prime Minister Meles and I will therefore... take forward these common proposals with both developed and developing countries. We will be working together with fellow leaders to build support for a climate financing agreement which can meet the needs of the world's people."

Mr Brown added that as far as long-term finance is concerned, he himself had argued "for this to reach €100bn annually by 2020."

President Sarkozy, who also was presented with the plan by Mr Zenawi, also accepted it at once. In a joint statement, the French and Ethiopian leaders officially backed targets to limit the rise in global temperatures to C and to offer financial aid to help poor countries adapt. "Such stakes for the planet are so important that an alliance between Africa and Europe is absolutely crucial, and that is the message I will give to [the US President] Barack Obama," Mr Sarkozy said.

The point about the Europe-Africa alliance may be even more important in the context of the conference than the actual details of the financial plan. The talks in the Danish capital, whose Friday finale will be attended by 130 world leaders from Mr Obama down, have been strongly characterised by mistrust and animosity between developed and developing countries, with the African nations in particular very ready to suspect a double-cross by the rich world.

On Monday, a protest by the African countries about the shape the talks were talking led to them being suspended for five hours of precious negotiating time. However, a deal publicly endorsed on the one side by one of Africa's most important political figures, and on the other by two of Europe's key leaders, has the potential to alter the mood music of the conference and dispel some of the distrust. Mr Brown has a long personal record of engagement with Africa's poverty and other pressing problems and is seen by many African leaders as someone they can do business with.

Today the conference moves officially into its ministerial session, with Ed Miliband, the Energy and Climate Secretary, leading for Britain. Mr Miliband spent much of yesterday in a consultative group with his counterpart, the Ghanaian Environment Minister Hani Sherry Ayittey, working on the finance issue. Today a new proposed text for the treaty will be published, which may take the talks nearer to a deal.

*Thousands of protesters who have travelled from all over the world are expected to take part in an event dubbed Reclaim Power Day today. So far 1,500 people have been arrested in Copenhagen, including the high-profile activist Tadzio Mueller, a spokesman for Climate Justice Action, who was detained by plain-clothes police as he left the Bella Centre yesterday. He will appear in court today although police would not say last night what charges would be brought.

Stumbling blocks: Issues still dividing the summit

Targets

Does the whole world agree on trying to limit global warming to C above pre-industrial levels, or to 1.5C? In either case, which countries should do what? Who cuts their carbon dioxide emissions, and by how much? How much by 2020? How much by 2050?

Finance

Rich countries know they will have to pay developing countries to move to a low-carbon future, but developing countries are asking for far more than the €100bn a year offered by the EU. How much should be paid? And who should control such vast sums?

Monitoring

Many nations insist on the need for emission cuts and finances to be monitored, reported and verified. But countries like China and India do not want to be certified by foreign inspectors. So how can their emission cuts be accurately measured?

One treaty or two?

Should there be a new climate treaty, or should the Kyoto protocol be continued, with new emission-cutting commitments? Most rich countries want a new deal, but developing countries want to stick with Kyoto as it legally binds only the rich signatories.