Fixing the climate won't come cheap

In his speech to the UN climate summit, the Chinese premier, Hu Jintao, signalled his country's willingness to adopt some form of carbon intensity target as part of a new deal on climate change. This is indeed a welcome step, and – if matched by clearer indication from President Obama about US willingness to make substantial early cuts – may prove to have laid solid foundations for a successful outcome at the crucial UN talks at Copenhagen in December.

The Chinese move disappointed some commentators who had hoped for more specific and stringent measures than the premier's promise to reduce carbon intensity by "a notable margin". But more significantly for now, perhaps, is that Hu's gesture appears deliberately calculated to support Obama in his stand-off with the many senators who still resist US legislation on emissions reduction. The Chinese signal to take action removes Obama's opponents' principal excuse – which is that the US should not have to act unilaterally and without reciprocal measures from China.

The setting out of the country's positions at the UN in this way could thus be a critical factor in raising the chances of a successful deal. It is, however, at the G20 meeting in Pittsburgh later this week that even more critical breakthroughs could be made.

Finance ministers from the G20 have met in recent months to discuss climate change finance. This is a big deal, at least as big an issue as Chinese and American emissions reductions commitments. Unfortunately, however, little progress has been made. Major developing countries have been reluctant to discuss money without knowing what kind of cuts the big historic polluters will sign up to. The funders, basically the richer western countries, have been reluctant to talk about finance because many of them face disastrous domestic finances.

The money is needed to help vulnerable poor countries adapt to the effects of climate change, to provide incentives to tropical countries to cut deforestation and to facilitate the transfer of technology. To do all this will require a lot of money. Gordon Brown suggested back in June that the bill by 2020 will be about $100bn a year. While others say it is much more than that, it is clear that the finances presently available from developed countries' governments and carbon markets are nowhere near what is required. This is problematic, and will require real leadership to solve.

The politics of the situation dictate that in addition to setting out their intention to make major early cuts, the historic polluters will need to put some major money on the table in Copenhagen. To do this will require the kind of decisive interventions recently made to stabilise the financial system. Some $4tn-worth of stimulus packages and bailouts were deployed for that.

While party leaders will be queuing up during the party conference season to outdo each other on the scale of public spending cuts they will make, they need to say where the money to save the climate will come from.

Having sold the family silver to prop up a bonus-corrupted financial system, they must now mobilise the resources to stablise the climate, for without money there will not be a worthwhile deal, and without a worthwhile deal the consequences of climate change will make the financial crisis seem like a walk in the park.

Originally published by The Guardian.