The deal struck at the UN climate conference which concluded in Cancún, Mexico, at the weekend has been hailed by some - mainly governments - as a remarkable achievement, and by others - mainly environmentalists - as badly inadequate. In fact, it is both. The Cancún Agreements perform the remarkable feat of simultaneously changing nothing, and changing a great deal. Yet they should be seen as restoring a climate of hope in difficult times.
They change nothing, because the commitments which countries have made to reduce their emissions, and to provide finance to help poorer countries, are exactly the same as they made in the Copenhagen Accord, the agreement which failed to get UN approval this time last year. Cancún simply brings countries' existing targets under the formalities of the UN.
Meanwhile the new features in the Cancún Agreements are largely institutional rather than substantive: a Green Climate Fund to channel assistance to poor countries, new rules on measuring and supporting rainforest protection, new processes of monitoring emissions, a committee to promote technology transfer, and another on adaptation. None of these elements in themselves cut emissions, or help poorer countries cope with climate impacts now: indeed, none of them are final agreements at all. They will all require a huge amount of further negotiation over the next few years before they become operational.
And yet Cancún is still a very significant moment. Why? Because it will restore confidence among both governments and businesses that action on climate change is going to occur. And in turn that makes it more likely that such action will occur.
Climate change presents a classic case of the prisoner's dilemma. Every country will benefit if all countries take action to combat climate change. But it's only in my interest to take action if I know others are doing so too; and if I think they're not, it's in my interest not to. For businesses, a future world in which emissions are curbed and clean technologies are incentivised makes it worthwhile investing in low carbon systems now. There are huge advantages in being first in the market with green solutions. But if that world isn't going to happen, such investments could prove expensive mistakes.
Since Copenhagen that's been the fear. The sense that the world was not going to come to an agreement on climate change has had a chilling effect both on developed countries' commitments and on business investment. In the US and Australia, public support for action on climate declined. Buckling under the weight of financial crisis, Europe lost its appetite for climate leadership. Investors have put new low carbon energy projects on hold. And into the damp pool of uncertainty have swarmed the climate sceptics and those - oil and coal companies and others - with a vested interest in stagnation.
Cancún reverses that downward spiral. It has the chance of restoring belief that countries will indeed be taking action, and that the low carbon economy will therefore happen. For governments, it re-establishes the crucial norm of international co-operation: very few countries, including the US and China, will wish to stand outside that. In every country it should bolster the forces seeking a faster transition to the low carbon economy and weaken those looking to hold it up.
In the Great Depression Franklin Roosevelt said that the only thing to fear was fear itself. So it is with climate change: belief in failure breeds an unwillingness to act, which then becomes self-fulfilling. But equally, belief that action is occurring encourages clean energy investment, which then makes the progress real.
The critics of Cancún are of course right to say that the emissions reduction commitments embodied in the new agreements are not sufficient. As the UN Environment Programme has recently shown, to have a reasonable chance of keeping the global temperature rise within the 2C global goal which Cancún confirms, greenhouse gas emissions in 2020 need to be around 44 gigatonnes (GT) per annum. But if all countries' pledges are fully implemented, emissions will be around 49GT, leaving an'emissions gap' of at least 5GT.
So countries will have to make further commitments. But that is exactly what the Cancún agreement acknowledges - noting the divergence between the commitments and the 2C goal, it establishes a comprehensive review of the adequacy of pledges to begin in 2013, based on the latest scientific evidence.
At the same time the significance of these pledges should not be underestimated. If fully implemented, they would see global emissions peaking around 2020. This would represent a historic turning point in humankind's 200-year experiment with burning fossil fuels - and the essential basis for emissions to decline in the future.
And one should be wary of claims that these commitments lock the world inevitably into 3-5 degrees of warming. That remains likely, and deeply alarming - and for that reason Cancún agreed on an international mechanism to address climate loss and damage in vulnerable countries. But it's also true that the eventual global temperature rise will be determined as much by actions taken after 2020 as before. Maintaining a chance of achieving a 2C world will require dramatic reductions in annual emissions post- 2020; these will be more expensive than taking the same action now; but they may not be impossible in a world of greater technological innovation.
Following the debacle in Copenhagen last year, there were plenty of people arguing that Cancún was a 'last chance saloon' for the UNFCCC, the unwieldy assembly of the UN climate convention in which the negotiations take place. So the agreements reached have done much to restore faith in the multilateral process.
Yet in reality all Cancún has done is to complete the process originally intended to end in the Danish capital. The Copenhagen Accord, frequently reviled, has been largely endorsed, with key text incorporated into the new agreements, filled out by further detail much of which was also on the table a year ago. In that sense Cancún represents something of a triumph for the Obama administration and its negotiators, who played a weak hand well.
So why did it take a year longer to achieve? Two critical insights have come to be accepted over the last twelve months. The first is that the world cannot allow itself to be dragged backwards by US domestic politics. In the past, the failure of the US to pull its weight in emissions reduction has been seen as a reason why others, particularly developing countries, should not do so. Now, China and others accept that they are just going to have to live with inadequate US effort, for the present at least; the global threat is too critical for action to be stalled in a futile wait for equity. The view now is that the US will just have to catch up later when the economic costs to the American economy of remaining on a high carbon path in a low carbon world become too obvious to ignore.
Second, countries have reluctantly acknowledged that a legally binding agreement is not possible at the present time, whether a continuation of the Kyoto Protocol or a new treaty. An artful fudge was concluded in Cancún by which decisions on both options are put off for another year. But few expect that either the US or China will be willing to be bound to their targets by international law in the immediate future; and Japan, Russia and Canada have made it abundantly clear that they are unwilling to extend the Kyoto Protocol unless the US and China are also in a legally binding treaty.
So the Copenhagen-Cancún climate regime does not look like the model architecture to which environmentalists have for so long adhered. In place of a legally binding treaty, there will be merely the 'soft law' of UN decisions. Instead of a top-down global target set by scientific analysis, distributed between countries according to some formula of equity, countries will make their own bottom-up commitments, which may or may not - in fact, do not - achieve the global goal they have themselves agreed, so will need constant upward pressure to be revised. There will be no penalties for failing to meet commitments; rather, the world will have to rely on the sanctions of domestic politics in each major country.
It is not ideal; and it could yet be replaced in the future by a legally binding regime. But it need also not be the failure some have been painting it. For now that the negotiators have gone home, the real issue appears through the mist. Cutting global emissions is not achieved by an international agreement. That provides a crucial foundation of confidence, which is why Cancún should be seen as a vital success. But the real work will be done by hundreds of billions of dollars of investment in low carbon energy and transport systems and forest protection. It is to delivering this that attention must now turn.
A longer version of this articles is published in Inside Story