The recent financial scares have been significant indeed, however these scares will not affect a new world climate deal meant to create incentives for stronger energy efficiency and also lessen global warming. The financial problems had led many analysts to suspect that no financial resources would be made available for efforts in lessening global warming.

According to a leader in the UN Climate Change Secretariat, it is not directly the financial problem which has made investors cautious but rather the fear of an uncertain investment. He explained his position by saying that “if you are about to build a 500 million euro power plant and you don’t know if your government will go for greenhouse gas emissions cuts of 5 percent or 50 percent, then that’s a very risky decision to make”.

The US role: It is important to note that the US did not join in the Kyoto Protocol of 1997, which is perhaps one of the most important environmental documents to be signed in the last 20 years, in spite of its flaws. Individuals are hopeful however for the US’s possible role in this new upcoming deal, which is to be signed in Copenhagen in 2009. The deal, as mentioned earlier, is designed specifically to lessen global warming, it will be later followed by a renewed Kyoto Protocol which is to be signed in 2012.

The Kyoto Protocol, bound the signers to reduce their emissions by at least 5% by 2008, based on their 1990 levels. This of course, did not apply to developing countries. The reason behind the US refusing to the sign the agreement was based on fears of hindering its economic growth. Thus, in order to the UN to push developing nations into wanting to sign the agreement, it must create incentives which could provide some sort of economic safety and reduce climate policy costs.

The Clean Development Mechanism, could be one such incentive, the CDM permits a nation to increase its emission quota on the condition that it invests in clean energy use it in its economy. The UN is torn however on the question of if this agreement should include coal based economies, this decision is still being decided upon. In any case, it is hoped that this agreement of 2009, will set the framework for the 2012, Kyoto Protocol.

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