As the deadline looms for the world's governments to strike a global greenhouse gases reduction treaty in Copenhagen in mid-December, signatories face the daunting task of balancing domestic political and economic agendas with international environmental commitments. For business lobbyists looking on and hoping the United Nations climate summit will lead to clarity on emissions targets and policies allowing planning for the future with some certainty, the odds do not look good. The urgency of forging some international agreement has been heightened by the fact that the trading of emission reduction credits under the UN-administered 'clean development mechanism' scheme has been limited by the end of the Kyoto Protocol in 2012, with no new treaty in sight. The scheme allows greenhouse gas emitters in developed countries to meet their reduction obligations by investing in emission offset projects in developing countries where costs are lower and in circumstances when incentives to mobilise private-sector funds to invest in clean energy and energy conservation projects face a temporary drop-off. The mechanism is particularly important for the mainland, which generates about 60 per cent of emission reduction projects for the system and benefits most from it. James Cameron, a vice-chairman of Climate Change Capital, a London-based investor in clean energy and greenhouse gas reduction projects, told a panel discussion at the World Economic Forum that besides clarity, the investment community is also looking for continuity of incentives and a greater scope of projects allowed to benefit from the incentives. Such incentives involve making economic activities that cause greenhouse gas emissions more expensive and providing subsidies to those that emit little or no greenhouse gases. A clear regulatory framework is important for long-term projects such as the world's largest solar power project in the Sahara Desert, being proposed by a group of European firms to meet 15 per cent of Europe's electricity needs by 2050. The investment cost envisaged for the project is about US$550 billion. Caio Koch-Weser, a vice-chairman of Deutsche Bank Group, one of the project's promoters, said financing the proposed scheme would be a daunting task, and incentives would be key to making it feasible. A feasibility study would take three years to complete. Yet even the top official of the UN Framework Convention on Climate Change, an international convention set up more than a decade ago to work on ways to mitigate global warming, believes a lot of work needs to be done if an agreement is reached in December for the details of an incentive-based system to be ironed out. 'It is impossible, in the time that remains, to craft and draft a comprehensive international treaty, but it is also not necessary,' said the convention's executive secretary, Yvo de Boer. 'What Copenhagen has to achieve is a basic political understanding on key cornerstones that will make it possible for a comprehensive agreement to be drafted.' De Boer warned negotiators that 'it would not be enough to walk away from Copenhagen with a bunch of principles'. His target is for developed countries to commit to 'clear and ambitious' greenhouse gas reduction targets and contribute an estimated US$100 billion in annual outlay needed to help developing countries cope with the impact of climate change, and for developing countries to come up with schemes to limit the growth of emissions. The world's second-largest carbon dioxide emitter, the United States, faced with a deep recession and costly health-care reform, has proposed to cut greenhouse gas emissions by 17 per cent from 2005 levels by 2020 - well short of proposals by other developed countries. Europe has agreed to cut emissions by 20 per cent from 1990 levels by 2020, enlargeable to 30 per cent if others agree to do the same. Japan has offered to cut emissions by 25 per cent by 2020 from 1990 levels, provided other major economies agree to do at least the same. Although China is the biggest carbon dioxide emitter, it has argued that it should be given more time to grow its economy and hence emissions, and so far has agreed only to stop carbon emission growth by 2050. De Boer countered that by saying China would become a significant emitter on an accumulated basis in five to 10 years, and that by committing to a more aggressive target and creating a low-carbon economy, it could help to enhance energy security, improve air quality and lower production costs - goals that are in line with its national objectives. Still, the mainland has been lauded for its swiftness in implementing policies to develop a low-carbon economy, as its one-party political system means it is easier for Beijing to push through initiatives faster than many other countries despite China's vast economy. The mainland is also seen as a leader in the deployment of green technologies. 'China has the potential to steal a march on its global competitors,' said Richard Gledhill, the global leader of climate change and carbon market services at accountancy and consultancy firm PricewaterhouseCoopers, citing its fast economic growth and strong technological and manufacturing capability. According to the China Greentech Report released last week by the China Greentech Initiative, the mainland's total potential market for green technology solutions could be worth up to US$1 trillion annually, or 15 per cent of the mainland's forecast gross domestic product in 2013.