Prime Minister John Key remains hopeful of a deal at Copenhagen but thinks if progress is to be made ambitions may need to lower.
Mr Key, in a speech to the conference, urged leaders to push for agreement on a new United Nations pact aimed at averting dangerous climate change but in an interview suggested the bar needed to be set lower if progress was to be made.
The talks have suffered severe setbacks and were deadlocked for 24 hours until Danish Prime Minister Lars Lokke Rasmussen dropped plans to present his own compromise texts.
One bright spot overnight was United States Secretary of State Hillary Clinton's pledge to help mobilise US$100 ($136) billion a year by 2020 to assist poor nations. However, she did not move on her country's low emissions reduction target of 17 per cent below 2005 levels over the next decade, equating to about 3 below the 1990 benchmark used by the UN.
New Zealand's conditional target for reducing climate harming emissions is to reach 10-20 per cent below 1990 levels by 2020.
In his speech Mr Key said New Zealand had come to the table with a "great hope" for a binding agreement to replace the Kyoto Protocol after 2012.
"It is sobering to have reached this point of the conference without having made progress on the major issues necessary for a comprehensive, effective and legally binding global climate change agreement."
He called on major economies to show leadership, saying New Zealand was acutely aware of the danger climate change posed for its Pacific island neighbours and big powers needed to consider the plight of vulnerable nations.
"A clear and firm signal must be sent to the world. We must change attitudes, drive low-carbon development, spur innovation and deployment of technologies, and influence priorities for finance and investment," Mr Key said.
"Progress will require commitment, compromise and cash.
"But now is the time for us all to face the reality: that of all the options on the table at Copenhagen, failure is the one we can all least afford."
New Zealand was committed to playing its part, Mr Key said citing its emissions trading scheme.
He pushed New Zealand concerns around forests and agricultural emissions and argued against constraints on the carbon market.
"The wrong rules could significantly undermine New Zealand's future as a food producer to the world for no environmental gain."
Speaking to Radio New Zealand this morning, Mr Key said it was too soon to give up on a deal.
"I think it's fair to say at the moment there's a lot of frustration here as I arrived in Copenhagen, some real concern that this might all fall over and we may get no progress at all, but I think it's far too early to write it off. With the leaders just arriving it may well be that we can resuscitate things."
Mr Key said the US move was a positive.
"Certainly the offer from the United States, which essentially matches what the European Union put on the table from 2020, is a positive step because it's quite clear in the last couple of week very little progress so far has been made at Copenhagen," he said.
"We have around about 24 hours to go, it will be a very important 24 hours if we are to resuscitate negotiations here and get a deal at Copenhagen."
Movement would require significant money to help developing nations mitigate and adapt to climate change and for all countries to make commitments to reduce emissions.
"We want to see some progress being made, I think in one sense maybe even if we start from a lower base just getting everyone on the same page and starting to move forward is potentially one of the most important things that we can do."
He said draft texts had so many areas of disagreement that they may need to be put aside.
In his speech Mr Key also talked about New Zealand's Global Research Alliance aimed at fostering international cooperation and research to find ways of reducing agricultural emissions.
Mr Key told Radio New Zealand the $45 million over three years that New Zealand had committed to the Global Research Alliance would be "largely separate" from the $10m-$50m a year that he had already committed New Zealand to pay towards a fund for developing countries.
He said Indonesia joined the initiative today and there was $150m on the table but Mr Key expected more money and "in-kind" commitments such as scientists' time.