Developing nations led by China and India pledged they’d work toward an agreement that would limit their fossil fuel emissions for the first time, the biggest advance in the fight against global warming in 14 years.

Envoys from more than 190 nations also extended the Kyoto Protocol, the only ratified treaty limiting greenhouse gases. They will develop a document with “legal force” by 2015 that would curb pollution for all nations, according to a text adopted today in Durban, South Africa.

Smoke stacks and cooling towers of the RWE owned Neurath coal power plant are viewed near Grevenbroich, Germany. The impasse risks undermining the $142 billion a year market designed to cap carbon-dioxide linked to burning fossil fuels Photographer: Wolfgang von Brauchitsch/Bloomberg

“Historic is the word,” Grenadian ambassador Dessima Williams, lead negotiator for a coalition of 42 island nations, said in an interview. “The idea that we got everybody to agree to take some form of legal commitment is a major outcome.”

The talks dragged more than 28 hours past their scheduled Dec. 9 finish as a division emerged between a coalition of more than 120 nations backing a road map to a legally-binding deal and China and India, which sought weaker language on the eventual legal form of the pact. It was the longest meeting since the climate talks began in 1992.

Near Collapse

Delegates slept in the corridors as the talks teetered on the brink of collapse after the European Union, 42 island nations and 48 of the poorest states said they couldn’t accept a watered-down deal. India refused to sign an agreement that would bind it to an unwritten treaty and threaten its economy.

“India will never be intimidated by threats,” India’s Environment Minister Jayanthi Natarajan said in a passionate speech to delegates this morning. “How do I give a blank check and give a legally-binding agreement to sign away the rights of 1.2 billion people?”

The dispute exploded in the early hours of Sunday and was defused when India and the EU agreed to substitute language calling for “a protocol, another legal instrument or a legal outcome” with “a protocol, another legal instrument or an agreed outcome with legal force.” The protocol and instrument terms echo the 1995 Berlin Mandate that set the course for delegates adopting Kyoto two years later.

“This is a breakthrough decision,” said Tomasz Chruszczow, the envoy from Poland, which holds the rotating presidency of the European Union. “Efforts to fight climate change will be made by all countries, not only the EU. This won’t happen right now, but a process has been started.”

Wiggle Room

The U.S. initially suggested the “legal instrument” words and backed the compromise, saying it was important to keep the package of Durban measures on track. Environmental groups said the words may let nations wiggle out of commitments.

“This weak compromise is a victory for the fossil industry, which is successfully controlling the U.S. government not agreeing to a legally binding protocol,” said Martin Kaiser, who analysis international climate policy for Greenpeace.

Delegates who were mainly national environment ministers agreed to work toward bringing the next treaty into effect from 2020. That proposal allowed the EU almost alone to say it would make further commitments under Kyoto.

Boost for CDM

Extending Kyoto supports the Clean Development Mechanism, a pillar of the global carbon market that came out of the treaty. Prices of CDM certificates issued have fallen 54 percent in the past year as the weaker economy cut demand for the offsets and concern mounted about the continuation of the program.

Diplomats scaled back ambitions for this year’s meeting and didn’t fix new commitments for doubling pledges to curtail greenhouse gases by 2020, a measure the UN Environment Program says is needed to keep global warming from exceeding 2 degrees Celsius (3.6 degrees Fahrenheit) since industrialization. That infuriated the blocs of Latin American and island nations.

“We all know this is a very bad agreement that will need more work,” Claudia Salerno, the Venezuelan envoy who helped derail a decision at the talks in Copenhagen two years ago, said during the debate last night. “We need to stop this farce of lack of shame.”

Emissions of carbon dioxide from fossil fuels hit a record last year, and 2011 is on track to be the 11th warmest ever. Glaciers are retreating from Tibet to the Alps and Mount Kilimanjaro in Tanzania, and sea levels are rising, causing concern among island nations at risk of disappearing.

Low Ambition

“The ambition of the package is extremely low,” Nicaraguan minister Paul Oquist Kelley said in an interview. “It says this is a critical problem that’s time urgent, so let’s do something about it in 10 years. You have low ambition, low urgency. We’re ignoring what’s happening before our eyes.”

The meeting also:

To contact the reporters on this story: Kim Chipman in Durban, South Africa at kchipman@bloomberg.net; Alex Morales in Durban, South Africa at amorales2@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net