Carlos Joly sifts through the good and the bad at the recent UN talks on climate change.

Remarkable how willingly governments have surrendered national sovereignty to Standard & Poor's and the bond markets, while ceding sovereignty on carbon emissions governance to a UN body is anathema. The power of finance to blackmail governments seems much stronger than the power of nature - so far, at least. What will act as the sword of Damocles for climate?

There are striking parallels in both cases. The cause and consequences of the looming climate crisis are well known, and predictions are proving alarmingly correct. The causes and consequences of the financial and economic crisis were also foretold, and the human costs are also playing out as economists have been warning (Krugman, Stiglitz, Roubini, Reich).

There the parallel ends. Governments have managed to act in concert on finance, albeit with the wrong remedy - coordinated multi-national austerity - whereas as regards climate they studiously avoid agreement. Fear of the bond market - a social and legal construct that could be easily defanged by gutsy political and regulatory remedies - turns out to be a much stronger force than fear of nature. Mankind shows it is still in the grip of Western civilization's belief that Man has the right to conquer Nature, and 250 years of industrial revolution to prove it can. Except that the very same methods of science that have made Progress and Prosperity possible are now telling us that it's working against us. But we don't want to listen. Perhaps society only shifts direction on acute danger and high drama. Climate catastrophe comes in drips and drabs, not as a big bang but rather as the sum of a large number of small calamities.

What was actually agreed on at Durban? As is becoming routine with summits, parties agreed in late night overtime to move forward with a 'Durban Platform' that includes a "pathway forward on a legally binding instrument" for all countries, an agreement on a continuing commitment to the Kyoto Protocol by those having ratified it and a set of decisions to implement the Cancun Agreements, including the Green Climate Fund. What does this mean?

There is in principle agreement on extending the Kyoto Protocol  (expiring 2012), subject to future agreement with countries not party to Kyoto reductions. Such future agreement is based on voluntary targets by those countries (notably the US, China, India, Russia and Brazil). How does that satisfy the conditional offer advanced by the EU at Copenhagen? "As part of a global and comprehensive agreement for the period beyond 2012, the EU reiterates its conditional offer to move to a 30% reduction by 2020 compared to 1990 levels, provided that other developed countries commit themselves to comparable emission reductions and that developing countries contribute adequately according to their responsibilities and respective capabilities." Note the US has no intention of committing to comparable emission reductions. Also, countries committing to a second Kyoto commitment period have yet to define emission targets that will apply to such period (to be decided at Qatar in 2012).

Either this is an agreement to agree to something indeterminate enough that agreement could be said to have been reached, thus justifying the time, money and effort put into the UNFCC's process, or it is, as Bloomberg reporters would like us believe "the biggest advance in the fight against global warming in 14 years". A vague "legal instrument", undefined targets, no metrics and ratification by a congress or parliament that might be beholden to oil and coal lobbies leaves quite of lot of wiggle room. One environment minister said: "The ambition of the package is extremely low. It says this is a critical problem, that time's urgent, so let's do something about it in 10 years."

The US, the biggest emitter measured by historical emissions, says it will not agree to any accord unless all emitters are equally bound and accept "symmetrical" reduction limits going forward. China and India have said they will bind themselves only if the historically big emitters take most of the burden of cuts - they seek fairness taking history into account. Both positions remain far apart.

The financial crisis provides all with cover for postponing funding the Green Climate Fund for another decade. A cynic might well think if Goldman Sachs got a 5% fee on execution costs, we'd get an agreement. They'd syndicate to collaborating firms in different markets, put the weight of global finance on it, and presto, by 2015, we'd have a legally binding international agreement on carbon emissions, with effective targets parsed out by country, by industry, with tough penalties for non-performance and a financing mechanism to make it work. Just a matter of letting the 1% continue to get filthy rich in order for the rest of us to be able to get on with cleaner emissions. Oh well, ain't gonna happen.

So what is happening? Despite the gloom there are some hopeful developments.

1.    China and the US invested $88bn (€68bn) in low-carbon energy technology in 2010. China is becoming world technology and cost leader in solar, wind and battery power.
2.    Durban moved ahead on adaptation (by poor countries to the material and social consequences of climate change) and REDD+ (measures against deforestation).
3.    Local and regional governments continue to advance carbon-restrictive legislation.
4.    Corporations that want to be ahead of the curve for competitive reasons continue de decarbonize, encouraged by investors (CDP, PRI, IGCC and CERES, for instance).
5.    The press generally gets it and makes the connection between extreme weather events and climate change model predictions.

The open question is whether technology-driven measures to limit emissions will be scaled up sufficiently to stabilise carbon concentrations in the atmosphere within the 450ppm carbon-eq limit required to avoid catastrophe. By their failure to reach a Kyoto 2 that would include the emerging market high emitters, Obama, Singh, Putin, Roussef and China's leaders are in effect saying that national voluntary efforts rather than international obligations will suffice. National budgets, then, will have to build in the proper incentives and penalties.

As citizens, consumers, investors, environmental activists and managers of corporate resources, our role is to keep putting pressure on at least this coming about. In the meantime, reports confirm that the frequency and severity of extreme weather events is increasing. At some point, that might act as the sword of Damocles. Let us hope it will not be too late.

Carlos Joly is chairman of Natixis Asset Management's Scientific Advisory Committee and an associate professor of finance and climate change at Toulouse Business School