By Roger Harrabin
Environment analyst, BBC News
EU leaders say the downturn is an opportunity to develop green energy
The EU is calling on President Barack Obama to cap US carbon emissions and sign up to a global system of carbon trading between rich nations.
The European Commission said the US needed to join a carbon market if it were to raise the huge sums needed for combating climate change.
Rich nations had to raise 175bn euros (£162bn; $321bn) by 2020 for clean technologies, the commission added.
More than half of that cash would go to developing countries, it stated.
A further 23-54bn euros would be needed to help poor nations to adapt to climate change that was likely to happen.
Without that inducement to poor countries there would be no new global climate agreement at the UN climate summit in Copenhagen in December.
"Without a credible financial package there will be no deal in Copenhagen," EU Environment Commissioner Stavros Dimas said. "No money, no deal."
Building global links
Mr Dimas said plans for a carbon trading scheme between the rich nations in the Organisation for Economic Co-operation and Development (OECD) were increasingly realistic.
Australia was already committed to a system of capping emissions, allowing big firms to trade carbon permits between each other, he said.
New Zealand was moving towards a scheme and President Obama had expressed his support for carbon cap and trade.
Mr Dimas pointed out that America's new climate negotiator, Todd Stern, was negotiator for the Clinton team which originally planted the idea of carbon trading into the Kyoto Protocol, before America withdrew.
The commission aims to limit the world's temperature increase to 2C. There is enormous uncertainty about climate projections, but the EU calculates that to achieve this goal, global emissions need to peak before 2020 and then be cut to less than 50% of 1990 levels by 2050.
The commission blueprint acknowledges that some scientists are warning that even tougher targets are needed.
It says action will be needed from both developed and developing countries. This has been a major sticking point in the US, where Congress members refuse to agree to any deal which excludes competitor nations like China.
UK Green MEP Caroline Lucas said the commission's proposals were inadequate to tackle the scale of the challenge.
Tropical deforestation is seen as a major contributor to global warming
"The EU must commit to a 40-45% emissions reduction by 2020, based on 1990 levels," she said.
"The EU and other industrialised countries need to agree to finance at least half of the reduction effort that needs to be achieved in developing countries. We regret that the commission communication fails to set out an ambitious vision and merely rehashes existing targets."
The EU says the Copenhagen deal should not oblige developing countries to take on binding targets - which they would anyway refuse. Instead it should insist that emerging nations provide detailed plans of how they will slow the increase in their emissions by 15-30% below business-as-usual projections.
Commissioner Dimas said China's existing ambitious plans to improve energy efficiency by 20% in five years would probably qualify.
The commission's call for carbon trading was welcomed by John Bowis, the Conservative environment spokesman in the European Parliament. He said the commission "is right to point out that a fully functioning carbon market must be extended to other developed nations if it is to be fully effective.
"The battle of words between Europe and the US over climate change is now over; the battle for the planet must now begin."
But faith in carbon markets is not universally shared. In the US, Exxon Mobil said a carbon tax would be a more efficient way of raising cash, with lower impact on business.
Steve Rayner, James Martin Professor of Science and Civilisation at Oxford, agrees that carbon trading is an inefficient mechanism.
"The reality is that it cannot possibly deliver the deep emission cuts that are required in the time available if we are to achieve stable carbon concentrations by mid-century," he said.
"I think major public investment in bringing down the costs of alternative technologies is essential and I think this is what we will see happen at Copenhagen."
The commission proposals brought a mixed response from environment and development groups.
The EU plans for innovative funding schemes to raise cash for climate change were welcomed. But campaigners were angry that an EU promise to funnel 30bn euros to poor countries was deleted from an earlier draft.
Commissioner Dimas said at a news conference that the scale of funding would be matched to the level of ambition of developing countries to install clean technology.
But Alison Doig of Christian Aid said: "These proposals will not ensure that developing countries can prioritise poverty eradication and survival.
"The suggestions about which countries should pay for tackling and adapting to climate change, and how much they should contribute, are too crude to protect poor people."