If you shut your eyes and say the word, you probably think of white straw hats, the famous shipping canal or the 2001 movie adapted from John le Carre’s spy novel The Tailor of Panama.

For Panamanians, its meaning is grounded in place and nature, as they believe Panama means “an abundance of fish, trees and butterflies”.

So what will Panama bring, with its natural themed meaning, to the next round of UN climate negotiations, which kicked off over the weekend?

Panama is the last opportunity before the important UN Climate Summit in Durban, South Africa (November 28-December 9) for the negotiators to make progress on key issues around the scale of emission reductions, the UN Climate Fund and the future of the Kyoto Protocol (the current global agreement to tackle climate change set to end in 2012).

On emission reductions, negotiators will continue to grapple with the gap between current emission reduction pledges and the amount needed to limit warming to below the 2 degrees — the target set at last year’s climate summit in Cancun.

To provide some context, Australia is currently aiming to reduce emissions by 5% by 2020 on 2000 levels while Britain is aiming to reduce emissions by 50% by 2025 on 1990 levels. In addition, recent research by Oxfam estimates that more than 60% of emissions cuts by 2020 are likely to be made by developing countries. It is clear that rich countries, such as Australia, need to do more.

Last weekend’s meeting of G20 finance ministers in Washington also provided some meaning for these talks. Bill Gates announced his support for a financial transaction tax (also known as the “Robin Hood Tax”) to contribute to the $US100 billion a year needed to help poor countries adapt to climate change. This week, European Commission President Jose Manuel Barroso unveiled the EU’s planned Financial Transactions Tax arguing that banks must make a contribution back to society after the €4.6 trillion of taxpayers’ money they have received in the past three years.

These announcements will no doubt impact upon the negotiations around the UN Climate Fund in Panama and Durban. Australia is reluctant to talk about some of these new sources of climate finance at the UN talks, preferring to commit money from the aid budget.

On the issue of the Kyoto Protocol — the international agreement signed in 1997, which recognises “common but differentiated responsibilities” meaning that developed countries have a greater responsibility to reduce emissions — debate will continue around agreement on a second commitment period.

For Australia, the negotiations in Panama are significant. The carbon pricing legislation has entered parliament, with the House of Representatives set for a vote on October 12. We know that the world is watching to see if we will pass the legislation prior to the Climate Summit in Durban. If so, it will likely add much needed momentum to the climate talks. It will help us catch up to international efforts to deal with climate change.