India, Vietnam agree to talk as Japan mulls CO2 credit

Vietnam's Prime Minister Nguyen Tan Dung (L) guides India's Prime Minister Manmohan Singh during a photo opportunity as part of the 5th East Asia Summit in Hanoi October 30, 2010.

TOKYO (Reuters) - Leaders of India and Vietnam have agreed with Japan's Prime Minister Naoto Kan to talks on a bilateral CO2-cut and carbon offset scheme, a Japanese government official said on Monday, as global climate talks look to stall.

Hopes for a deal on climate change at U.N. talks in Mexico on Nov. 29-Dec. 10 have faded, undermined by splits between the United States and China. Also, there is uncertainty over Washington's climate policy after the U.S. midterm elections.

Still, Japan has been looking for developing countries willing to contribute to cuts in greenhouse gas emissions, using Japan's clean-energy technology which is rarely used in the existing U.N. carbon offset scheme.

Japan, the world's fifth-biggest emitter, is opposed to a simple extension of the Kyoto Protocol, whose first phase ends in 2012, arguing the climate pact binds almost 40 rich nations to curb emissions but covers less than 30 percent of global emissions.

"Chances are growing that negotiations are held at the United Nations as well as on other platforms," Keisuke Murakami, director at the trade ministry's global environmental affairs office, said at a news conference.

Indian Prime Minister Manmohan Singh and Japan's Kan endorsed a bilateral economic partnership deal on Oct. 25. The two also agreed to talk on a comprehensive bilateral framework of cooperation on climate change.

Vietnam's Prime Minister Nguyen Tan Dung and Kan on Oct. 31 also agreed to hold meetings on climate change issues, including crafting a bilateral carbon offset scheme in the future.

(Reporting by Risa Maeda; editing by Sue Thomas)