GLASGOW - The countdown to the end of the COP26 climate summit, scheduled to wrap up on Friday (Nov 12), has begun.

But whether a successful outcome can be reached is still up in the air.

In the final few days of the two-week conference, negotiators and ministers from almost 200 nations are holding discussions into the wee hours of the morning to find "landing zones" on contentious topics that all parties would be comfortable with.

The aim of the meeting is to come up with a set of rules that will help get the 2015 Paris Agreement off its training wheels to go full steam ahead with charting a liveable planet for humanity.

The Paris Agreement, which has been adopted by 197 nations, sets out a number of goals such as limiting global warming to preferably 1.5 deg C above pre-industrial levels, but not how to get there.

After three years of negotiations, nations agreed in 2018 to adopt the Paris Rulebook, a guide on how the agreement can be implemented, at COP24 in Poland.

The rulebook is missing a few key pieces to make it complete which can hopefully be put in place at COP26.

With a clearer set of rules in place for how countries can reduce their emissions, or international flows of finance, for instance, nations can adjust their domestic policies to drastically cut pollutive fossil fuels and protect their forests.

Climate finance has been a major point of contention among parties at the conference.

COP26 President Alok Sharma told a press conference on Thursday afternoon: "We are not there yet on the most critical issues. There is a lot more work to be done, and COP26 is scheduled to close at the end of tomorrow. Time is running out."

He added: "Negotiations on finance really need to accelerate - and they need to accelerate now."

The Straits Times highlights the current state of play on the matter.

What are the goals of the Paris Agreement?

The Agreement set out a number of aims. They include:

1) Limiting global warming to well below 2 deg C - preferably 1.5 deg C - above pre-industrial levels.

This temperature threshold will help prevent the world from experiencing harsher climate impacts, which become more severe with every degree of warming.

This goal is set out under Article 2 of the Paris Agreement.

2) Mobilising climate finance from developed to developing countries, so more vulnerable nations have the means to reduce their carbon footprint and adapt to climate impacts.

Mitigation refers to efforts to reduce a country's emissions, such as initiatives to boost energy efficiency or switch to renewable energy sources, while adaptation strategies may be to build sea walls to keep out the rising sea levels, or develop drainage infrastructure to prevent flooding from bouts of more intense rain.

This need for developed countries to provide climate finance to developing nations is encoded in Article 9 of the Paris Agreement.

In 2009, prior to the 2015 adoption of the Paris Agreement, developed countries had agreed to channel US$100 billion in annual climate finance to developing countries by 2020.

But they have failed to reach this goal, with financial flows in 2019 reaching only about US$80 million. The 2020 deadline has been pushed back to 2022.

Article 9 did not set a new target for climate finance, but at COP26, negotiators from developing countries are pushing developed countries to not only make good on their earlier promise, but to set a new, larger climate finance target for 2025.

3) Establishing a "global goal on adaptation", which is mentioned under Article 7 of the Paris Agreement.

Under the Agreement, this global goal includes information sharing on science and planning for adaptation, the provision of "continuous and enhanced international support" for developing countries, and ensuring an adequate adaptation response for developing countries.

But this goal has not yet been made operational, said Mr Sandeep Chamling Rai, senior advisor for global climate adaptation policy at environmental group WWF International Climate and Energy Practice.

He told The Straits Times on Thursday that parties must decide at COP26 on the establishment and launch of a two-year work programme to set in motion the global goal on adaptation. This will help to increase the overall progress made on adaptation ambitions, said Mr Rai.

Draft texts published on Thursday morning indicated that this programme, if adopted by all countries, would start immediately after the conclusion of COP26.

Said Mr Rai: "This is a very good signal for... meeting the adaptation objective of the Paris Agreement ."

Why is adaptation shaping up to be contentious at COP26?

There is a strong focus on helping developing countries adapt to climate impacts at this year's conference, which caps off a year of extreme weather events happening all around the world.

A new study released by the UN Environment Programme during the conference also estimated that adaptation costs in developing countries are five to 10 times greater than public funds currently available for programmes.

Many developing countries and climate groups are calling for any provision of public climate finance to be evenly split between adaptation and mitigation.

Said Mr Rai: "So far only 20 per cent of public climate finance goes to adaptation, and out of this 20 per cent, the majority of funds are provided on loans, not grants."

Developing countries, which are already disproportionately affected by changing weather patterns wrought by climate change, say that loans merely increase their burden and are calling for finance to be provided in the form of grants instead.

Related to finance is the issue of loss and damage, which is a term used in the context of the ongoing climate negotiations, and refers to climate impacts that societies are currently suffering that cannot be, or have not been, reduced by adaptation efforts.

This includes irretrievable loss and damage caused by climate impacts to life and infrastructure, which can come about because of extreme weather events such as hurricanes as well as sea-level rise.

Earlier estimates for the economic costs of loss and damage in developing countries alone have been projected to be between US$290 billion (S$391 billion) and US$580 billion by 2030.

Some forms of loss and damage are also intangible, and can include the loss of biodiversity, cultural monuments and traditions, and sacred sites.

But issues of adaptation finance and loss and damage are major sticking points at COP26.

Poorer nations are seeking additional finance to cope with the rising and repeated costs of climate change, as constant losses and damage threaten livelihoods and economic development.

But there remain knowledge gaps on the scale of loss and damage, as well as the financing and technical assistance needed. Industrialised nations are also wary of liability risks and compensation claims.

How is climate finance currently allocated?

Mr Rai said there is no clear, transparent process through which money is channelled toward adaptation and mitigation.

Till now, it has mostly come through each country's bilateral funding channels, such as the United States Agency for International Development or Australian Aid, or via international mechanisms such as the Green Climate Fund, Global Environmental Facility, and the Adaptation Fund.

"Wealthier nations can choose which project and which country to fund if they are channelling the money through a bilateral channel," said Mr Rai.

"But if the money is channelled via the UN channels like the Adaptation Fund or Green Climate Fund, they cannot."

Gaps and plugs in the draft cover text

Finance for adaptation and loss and damage are major sticking points at COP26, but they're not the only missing pieces to the Paris Rulebook.

Other key issues still to be negotiated include the rules of carbon markets and reporting requirements for transparency.

While countries have their own national perspectives and "red lines" for various issues, their decision on whether to approve the final document often hinges upon their evaluation of the entire package deal.

This means that nations may be willing to compromise on some areas if they benefit in others - and it is up to the British presidency of COP26 to present this package in a way that is attractive to the almost 200 nations gathered in Glasgow.

At dawn on Wednesday, the British presidency of COP26 released a draft cover decision text that compiles the different pieces of the puzzle.

The text provides the first clues as to what a deal might look like, although it will be revised numerous times as countries deliberate and consult with each other.

The next draft cover decision text will be released overnight on Thursday.

Asked for his thoughts on the first version, Mr Rai said it was good that it included a mention of the US$413 million for the Least Developed Country Fund, that supports adaptation efforts of developing countries.

But he noted that the draft cover decision text failed to include a provision that will ensure 50 percent of public climate finance is diverted to adaptation.