Global warming is the first truly global problem that needs all nations to work together in order to limit its impact, says carbon markets expert Graciela Chichilnisky. In this week's Green Room, she highlights a way forward that could suit all nations at the "do or die" summit in Copenhagen.
The pieces are falling into place for a major confrontation between the two largest emitters, the US and China
A global summit in Copenhagen in December will decide the fate of the Kyoto Protocol, the only international agreement we have ever had to combat the dangers of climate change.
But the protocol expires in 2012 and, like Cinderella, it will become a pumpkin as the clock strikes 12.
The Danish capital city is the last stop on the rollercoaster ride of hope and despair since the protocol was signed by 160 nations in 1997.
Partial attempts to move negotiations forward limped from failure to failure in recent years.
The world's two largest emitters - the US and China - cannot agree on limits, and the outlook looks bleak.
Yet, as an insider in the Kyoto process with 25 years of UN experience, I can read the smoke signals. I believe that Kyoto is worth saving, and it can be saved.
The failures so far are meaningless because nothing at the UN happens until the 11th hour, when we are forced to reach a decision.
Every nation has an incentive to procrastinate: no nation wants to reduce carbon emissions on its own.
Global warming is the first true global problem we have ever faced and we need every nation to participate or else there is no solution.
By burning its own fossil fuels, Africa could unwillingly cause trillions of dollars worth of damage to the US when sea levels rise and polar caps melt. There is nowhere to hide.
The main event
But UN negotiators are sophisticated diplomats who will not break cover. Without compulsion to agree, there will be no agreement.
The Berlin Mandate in 1995 committed the world to an agreement, and the Kyoto Protocol was born in 1997.
In 2007, the Bali gathering concluded that this year's meeting in Copenhagen would resolve the problem of Kyoto post-2012. So, in this context, Copenhagen is "do or die".
As nations get ready for the Danish showdown, the pieces are falling into place for a major confrontation between the two largest emitters, the US and China.
This is where the environment meets geopolitics.
The two nations alone could cause catastrophe for the world. The US does not want to limit its emissions unless China does, but developing nations are not required to reduce emissions without compensation.
They need energy to stave off poverty, and 89% of the world's energy comes from fossil fuels.
More than 50% of the people in the world live on less than $2 (£1.20) per day, and in excess of 1.3bn people are at the edge of survival with $1 (£0.60) per day.
Developing nations house 80% of humankind but produce only 40% of the world's emissions, while 60% of global emissions originate from the rich nations that house 20% of the world's population.
The stand-off between the US and China is reminiscent of the Cold War between Russia and the US in the middle of the 20th Century.
Russia and the US both refused to limit their nuclear arsenal unless the other did first.
The times are different, the weapons are different, but the situation is the same.
The carbon market that I designed and crafted into the Kyoto Protocol is key, because $60bn (£36bn) in carbon credits is traded each year in the EU's Emissions Trading System (ETS).
African nations say that are already having to deal with climate change
Developing nations do not trade in the carbon market because they have no limits on emissions, but they use the Clean Development Mechanism (CDM), which compensates (with carbon credits) private investments from industrial nations that reduce emissions.
This has led to more than $23bn (£14bn) in successful, productive and clean transfers.
So far, more than 60% of all CDM funding has gone to China, because the CDM is designed to reduce emissions and China - as the largest emitter - has most to reduce.
Africa is responsible for only 3% of the world's emissions and therefore has little to reduce; the continent has obtained little CDM funding. This needs to change.
How can we reach a consensus between industrialised and developing nations?
There is a formula that uses the protocol's own structure and updates it to overcome the impasse.
It involves financial and technical assistance, as highlighted at July's G8 summit, which has been officially supported by the Chinese delegation.
The financial part is a modest extension of the carbon market - engineered so that both sides get what they want.
For example, the US can buy an option to reduce Chinese emissions, thus obtaining what it wants, while providing "compensation" to China as is required by the UN climate convention for developing nations.
At the same time, the Chinese can secure a minimum price for the credits, ensuring that they would not be selling economic growth for a pittance.
This one-two punch reduces the overall monetary exchange while giving each party what they want; it can be a modest extension of the carbon market and sold in secondary markets to provide liquidity and stability for the carbon market.
Compensation can take the form of export credits for technology that makes emissions reduction possible; a modest extension of the CDM can certify new technologies that produce energy while reducing carbon from the atmosphere.
When used in Africa, the technologies can help the region reduce more carbon than it emits, meaning the continent can attract significant CDM funding that was not possible until now.
For rich nations, this involves $43 trillion (£26 trillion) in energy infrastructure - the right size to stimulate today's world economy -creating technology jobs, increasing exports and stimulating trade.
Copenhagen is the "do or die" mission for the climate negotiations. The price of failure could be catastrophic but there is a solution available.
Will the international community step up to the plate and save Kyoto?
Professor Graciela Chichilnisky is Unesco professor of mathematics and economics at Columbia University, New York, and has worked extensively in the Kyoto Protocol process, creating and designing the carbon market
She is also co-author of the book Saving Kyoto, which is published by New Holland
The Green Room is a series of opinion articles on environmental topics running weekly on the BBC News website
Do you agree with Professor Chichilnisky? Is Copenhagen a "do or die" summit for the world's climate? Can the industrialised and developing nations reach a consensus, or are the negotiations being dominated by rich nations? Is an enhanced carbon market the way forward?
This is an important meeting, not only for the possible action to be taken against climate change, but also the world will be watching to see whether, as a species, we can work cooperatively to achieve a common goal. However, if we can't and the, frankly childish, behaviour of the world leaders continues what will the rest of us think. What will we think if the constant 'I'm not doing it unless you do it first..' rubbish continues? What will we think? Well, we'll be forced to conclude that, as some already suspect, absolute imbeciles are in charge. The democratic countries involved need to put growing pressure on our leaders to act like adults and take control, be radical, think about the big picture. We will support you if you take a stand and tell us the truth instead of the political dodging of questions. Please! Rant over.
This sounds nice enough to me, and I'm all for a solution, but I'm afraid I simply don't get where you're concluding that, with what you describe, both the United States and China get what they want. The Chinese government seems to want nothing less than a free pass on industrial pollution, PLUS money from the west to pay for efficiency/green initiatives, for which China will still have no obligation to demonstrate reductions in pollution levels. My own government seems, judging from the attitudes of some of the most progressive members of the United States Senate, to want nothing more than token cuts to offer to environmentalists as a sop, plus trade barriers and special protections to ensure that dirty industries won't have to actually shoulder the cost of their activities. (And this, obviously, is far more than most of the opposition party is willing to even think about conceding.) I'm just not sure how your proposal satisfies either one of these positions or, unfortunately, how any useful agreement can.
Matt K, Lakewood, Ohio, USA
Surely any fair system of emissions reduction should be based, not on a country's absolute emissions, but on the per capita emissions. Australia's complaint that it is only responsible for 1.4% of global emissions and therefore it cannot make a difference is analogous to the richest 1.4% of people in the world asking to be exempted from taxation.
Richard Lester, Melbourne Australia
There's simply not enough incentive for governments. Firstly, let me state that I'm a skeptic when it comes to human-induced global warming. I agree global warming is happening, but humanity is not the cause. However, that's not to say some of the endeavors being designed to tackle global warming aren't worth pursuing in their own right. Renewable energy is very much worth pursuing, but at the moment its too expensive, so its easier to stick to fossil fuels. Instead of governments wasting money on current technology that wont work, why not invest that money in developing better technology that will lower the cost of energy whilst also reducing carbon emissions. Money will always drive governments and help broker deals. Use money as the incentive for getting your changes, not climate change. Increase efficiencies, reduce waste, save money to be re-invested in the economy. That will have governments willing to act. Forcing governments to waste billions on technology and schemes that may or may not help is not the way forwards.
Alex, Ipswich, Suffolk
We must change our behaviour right now! Or the movie scene of movie-"Waterworld" will come true!
Andrew, Taipei, Taiwan
This is utterly fascinating - she really genuinely believes this 'carbon trading' stuff ? "Carbon trading" was simply a layer of "the bullsh&t zone" that we were going to pass through till we figured out what a mess we were really in ! But it's taking it's time to dawn on us. So here we are; still looking to make money out this "marketing opportunity"; the destruction of 4 billion people. We are still "Keep'in on" using the same old shovels; words like "Markets, Money, Growth, Liquidity" to carry on digging the same old deadly hole deeper and deeper into the planet; "More more more" If she wants to change the world, first she has to change the values and mindset that got us into this mess. Is she so afraid to grab them by the scruff of the neck and tell them the truth in plain English ? Does it all have to be convoluted and muddied up in business-speak-jargon, and get rich quick motivations ? Is the entire human race such slobering beasts that we will do nothing without our snouts in the trough ? Same old same old; more more more; shovel shovel shovel; deeper deeper deeper . . . . Well, soon there will be nothing left in the trough. We will be popping out the other side of this "bullsh&t zone" soon enough. Cheers Steven
Steven Walker, Penzance
Kyoto has been one of the worlds biggest failures. The few that took a committment are not complying and the large majority did either not join or is exempt. The proper solution for industrialized countries is adequatly taxing energy consumption based on an universal key, and transferring the proceeds to developing countries for stopping deforestation and restoring degraded farm- and forestland for securing sustainable growth and development!!
Stefan Leu, Sde Boker, Israel
Its all a load of rubbish - an ego-trip for these people. Let it happen, Britain will be fine.
We are busy growing the 'fish pot culture'. The fish pot culture includes the air conditioned homes, offices, malls, cars, aircrafts, water bottles, packed foods and alike. Existing system indoctrinate us to this culture. Believe in nationalism; Love your religion; Adopt market ethics; Follow the professional norms; But what about the most important thing is to support one habitat i.e. 'The planet earth habitat'. All the sub habitats, nations and religions are situated inside 'The planet earth habitat' only. It is like your family. The carbon market, CDM and the modest extension of the carbon market as suggested by Professor Chichilnisky are excellent solutions for initial start but soon we will require permanent solutions. In carbon market one part neutralizes the other. In the second phase it can be diverted towards permanent natural solutions. What is the source of the CDM compensation? Would these funds be generated from the 'carbon free green activities'? We always intend to believe in terms of market. If we have to save the wild life, forest, oceans we try to explore market through tourism, carbon market and alike to save and maintain the 'green and blue'. The market picks up the 'priceless' things from the nature without paying its price and provides prosperity. Prosperous people destroy the nature with money without acknowledging the damage. It's a double impact. There may be disputes in carbon emission restrictions but there would not be any dispute in enhancing environment literacy. Professor Gracelia Chichilnisky is correct; we must come out of the 'advantages and disadvantages' and to focus on the 'do or die' in Copenhagen meeting.
Sanjay Singh Thakur, Indore,India
I think industrialized nations should cut down their emissions according to kyoto protocol.