In a military compound known in Lima as the Little Pentagon, climate change talks resumed today with the most positive atmosphere since, well, Copenhagen. This time round, however, there are no starry eyes about what can be accomplished.

All eyes are on the climate change conference in Paris in 2015, but Lima is a critical step. It will be here that a text on a new treaty will be drafted, where the commitments to be made by individual countries will be defined, and where critical decisions will be made on climate finance and adaptation measures that will help prevent Paris becoming the train wreck that defined Copenhagen.

It won’t be easy. Some delegations expect it to be fiery, the last genuine opportunity for interested parties to declare their grievances. The Chinese delegate chief last week said: “I think the Lima meeting will see a lot of disputes. And every country will try to inject its opinion in the draft agreement.”

But overriding the inevitable caution about corralling 194 different countries into a single agreement is the wave of optimism that has been kindled by the groundbreaking agreement last month between the United States and China.

That does not come anywhere near what these two countries need to achieve to meet the 2-degree target agreed in Paris. But it shows that the two biggest economies and the two biggest emitters will no longer be the roadblock they once were.

“There is a good atmosphere, and there are good signals,” said Peruvian Minister for the Environment Manuel Pulgar-Vidal who, as the representative of the host country, is chairing the talks.

Not that it will be smooth sailing, says Christiana Figueres, secretary of the United Nations Framework Convention on Climate Change. “That is quite an undertaking,” she said. “Getting there is not easy, because we have had a development model that has done exactly the opposite over the last 150 years.”

Over much of the past few decades, it has been the protection of that development model, and the vested interests that benefited from it, that has been the principal roadblock. The fossil fuel industry has succeeded in dominating not just global geopolitics, but the politics of climate change as well.

That is now changing. The US-China deal, according to some analysis, is likely to slash $4.5 trillion off the revenues of the oil and coal industries between now and 2030. And it is but a scratch on the surface.

And that’s because if the stated target of 2 degrees is to be met, the world needs to abide by a “carbon budget” of one trillion tonnes. To meet that budget it will need to leave two-thirds of known fossil fuel reserves in the ground, according to the United Nations Environment Program — the UN science body whose funding Australia has just slashed by 80%.

That would amount to $1 trillion a year in lost revenue by 2050 for big oil and big coal, according to the International Energy Agency.

Which means every year that action can be delayed is a trillion dollars saved for fossil fuels. As the Australian mining lobby so gleefully found in the mining tax debate, that can justify a mighty big lobbying budget.

Right now it seems that the talks are delicately balanced. Figueres says it is clear that the 2-degree “emission gap” — the difference between what the world says it will do and the actions it has agreed to take — will not be met by Paris next year.

That’s because it will take a few years for the mix of the bottom-up initiatives (known as INDCs, or intended nationally determined contributions) and top-down judgement (peer pressure) to take effect.

“It’s going to be an art rather than a science. There will be no environmental police going around making sure they are doing the right thing. As more countries realise that decarbonisation is in their long-term interests, then the gap will reduce,” she said.

One of the big issues hanging over the talks is the current fall in the oil price. There are various views of how this might impact negotiations. Some, such as Kepler Cheuvreux analyst Mark Lewis, says it underlines why big oil needs to reinvent itself: the cost of extracting oil can no longer be justified by its plunging price, and renewables are now competing. The shale oil boom in the US is becoming something of a mirage, or a one-hit wonder. The capital flows will soon change quickly.

Figueres appears to agree. She cites the huge volatility in oil prices as one of the main reasons to justify the move to renewables — because renewables have a predictable fuel cost. And that, of course, is zero.

She notes the move by E.ON to divest its fossil fuel business, and the move by the Rockefeller foundation to do the same. “You know the world has changed when the Rockefeller family decides to divest,” she said.

“We are seeing a turning point, on the part of large foundations realising that investment in fossil fuel is getting more and more risky. Both exploration and exportation of oil is getting more expensive, and renewable technologies are getting cheaper.

“Just from the financial and business perspective, we are getting a stronger case for renewables, and a weaker case for fossil fuels. We will see more of that when we see company boards see that they have a fiduciary duty to act.”

But apart from the Middle East, where the oil industry is state owned and indisputably in the national interest, only one other country is seen to act as a spokesman for the fossil fuel industry. That country is Australia, and Prime Minister Tony Abbott told the G20 meeting that he would “stand up for coal”. But if no one else is, what’s the point?

*This article originally appeared on Renew Economy