The on-going UN Copenhagen Summit is considered a historic event the world over. No single event since the end of the Cold War has brought so much attention to the world as a whole. This time, climate change is not just an issue being debated by tough negotiators in Copenhagen, but it is also an issue being debated within nations as well. As a policy issue, climate change provokes bargaining challenges at two levels: international and domestic. 

The international tier is happening in Copenhagen now, where developing nations – led by China – are bargaining with developed nations – represented by the U.S. Leaders from both sides are spelling out their bargaining positions in Copenhagen. Current international bargaining focuses on two issues: what are the targets for emissions reductions and who pays for these reductions? 

For several years now, China has been playing a leading role in the developing world. In November, the Chinese government announced that by 2020, it will curb key emissions per unit of GDP by 40-45 percent when compared to 2005 levels. The U.S. has also pledged to cut greenhouse gas emissions, roughly 17 percent below 2005 levels, by 2020. This promised reduction is approximately 4 percent below the 1990 UN treaty benchmarks. Consequently, the world is now watching the U.S.  

Simultaneously, bargaining at the domestic level is going on inside almost every nation. In the U.S., President Obama has to wait to get a clean energy bill from Congress before he can enact it. The American people are deeply concerned about their jobs and living standards and are therefore very sensitive to their government pledging too much for climate change.  

To reach its stated reduced emissions targets, the Chinese government will have to initiate more investment. Furthermore, China will need to increase its imports of emissions-reducing technology. All the while, China is facing economic slow-down issues and a rapidly climbing unemployment rate. All these aspects add uncertainties to China's sustainable development, especially given the fact that China is now in a critical stage of its transitional economy. The constraints of reduced emissions and increase of high-priced imports combined with growing unemployment may hurt China's economic expansion, further hindering the global economic recovery.  

Negotiators from 192 nations are now in Copenhagen. They are bargaining in order to build a consensus and reach an agreement to curb global warming. And, they must complete this agreement within two weeks! 

However, a final agreement will not be possible until the U.S. provides the world with acceptable and convincing figures for its own emissions reductions. Apparently, the U.S. is now on the right path to de-carbonize its economy. That is, if President Obama has successfully sent a strong indication of his carbon-reduction commitment to the American people and their legislators. Due to American domestic politics and the economic recession, many world leaders have legitimate reasons to question whether the U.S. is truly dedicated to de-carbonization. Nevertheless, it is still plausible to see a better offer from the US President on his last day in Copenhagen.  

Even if the Copenhagen summit successfully reaches an agreement, nations may still continue to emit unacceptable levels of greenhouse gases for years. This is because the agreement is not legally-binding. Under pressure imposed by high unemployment rates and widespread economic difficulties, is it reasonable to expect the Copenhagen consensus to actually become national policy in both developed nations like the U.S. and emerging nations like China and India? 

Forcing negotiators to reach a “political agreement” in Copenhagen is not the last step. It is the first step. What actions will nations take immediately after the agreement is made to reduce their emissions? How will emissions-reducing technologies be brought into the market? What is needed to help developing countries adopt clean power sources? All of these questions warrant clear answers in the near future.  

It is important to note that public awareness is also crucial. Both developing and undeveloped nations have shown very low public awareness of climate change. Even so, it is still probably very hard for these governments to make policy initiatives under any Copenhagen framework. To curtail waste and change consumer habits at the same time is not an easy task. However, these are the real objectives sought today in Copenhagen.  

The Authors: Dr. Lijuan Zhang is a professor at the School of Economics at Shandong University, China. Dr. E. Tylor Claggett is a professor of finance and director of the Financial Planning Track at Salisbury University, United States.