* EU forced to freeze law on airline emissions
* Lobbying has eroded other climate initiative
* EU deeply divided over 'hot air' row
* Hedegaard says world losing 'precious time'
By Barbara Lewis
BRUSSELS, Nov 26 (Reuters) - The EU's debt crisis has sapped its ability to lead the way in global climate talks, which began in Doha on Monday, and build on a fragile victory it clinched a year ago.
The European Union is one of the few to have promised to sign up to a second emissions-cutting period under the Kyoto process, the only international pact on tackling climate change.
But European Climate Commissioner Connie Hedegaard's drive to keep Europe at the vanguard of the global effort has been sabotaged at home and abroad by the debt crisis, which has drained energy or inclination for anything else.
In Europe, some EU member states, the heavy industry lobby and those within the EU executive who echo its views have steadily chipped away at Hedegaard's attempts to legislate against carbon, arguing they are unaffordable in cash-strapped times.
She was also forced to yield to international pressure, led by the United States, and freeze the EU requirement that all aviation using EU airports pay for emissions under the EU's Emissions Trading Scheme. That means only internal EU flights are bound by its rules for now.
Green campaigners and politicians say Europe and everyone else is losing the chance to invest in sustainable growth and to slow the pace of global warming while there is time.
The European Union needs "to wake up from the slumber it has been in for the past few years," Green Member of the European Parliament Satu Hassi said.
"The EU Commission's proposal to suspend the enforcement of the emissions trading system for flights outside the EU is a major source of regret," she added.
The European Parliament, which in the EU decision-making machinery has limited power, has pushed for well over a year for a higher EU carbon-cutting target, arguing the bloc is already on course to meet its goal of a 20 percent reduction by 2020 and it therefore represents is no ambition at all.
Hedegaard has admitted to frustration, but says she won't give up. The law on aviation, she insists, is only frozen - not rescinded - pending an international deal to provide an alternative way of curbing airline emissions.
Europe and the rest of the world, she says, must not use economic and financial crisis as "an excuse for inaction".
"The world is losing precious time," she said in a statement ahead of the two weeks of talks in the Qatari capital Doha. "Doha must build on the breakthrough we achieved in Durban."
DEAL TO SIGN A DEAL
In Durban, South Africa, last December, Hedegaard forged a coalition with some of the world's poorest and most vulnerable nations, who backed her as she campaigned into a second extra day of U.N. talks, tackling India - the final holdout - around a table in a corridor in a snatched bilateral.
That agreement, albeit only a deal to get a deal on a new climate regime by 2015, marked the first time all the major polluters, including China and India, had accepted the idea that everyone - not just the developed world - must curb emissions.
Now the task is to fill in the detail and move forward when the risk of backtracking is high.
Poor nations have warned further progress could be undermined by EU unwillingness to commit more money to help those in greatest need to adapt to climate change.
Talks in Brussels earlier this month agreed vague wording, not firm figures.
Europe's financial squabbles, most recently at last week's unsuccessful summit to negotiate a multi-year EU budget, could also open up any fault-lines within the EU negotiating team, which last year Hedegaard managed to contain.
Hedegaard herself is from Denmark, where shifting from fossil fuel to wind power, taxing energy heavily and promoting its efficient use are ideas that bind the political classes.
Among EU members, that pitches her most sharply against Poland, which relies on carbon-intensive coal for nearly all of its power and is nervous that greater climate ambition will dent its economy. Poland has led opposition to EU plans to deal with Kyoto pollution permits, officially known as Assigned Amount Allowances (AAUs) and nicknamed "hot air".
Following an economic slowdown, Poland now has a glut of AAUs that it wants to keep to offset its emissions or to sell.
But for Hedegaard, her fellow Danes and the other EU nations keen for a higher carbon price, these permits risk devaluing any second Kyoto commitment period after the first runs out this year, because they make it too cheap to pollute.
The latest public failure to deal with the surplus was in October this year when the EU tried and failed to agree on its Doha negotiating mandate.
More than a year ago, the EU said it had to solve the issue before last year's Durban climate talks. It did not. Now it takes that stalemate to Doha.