The sectors with largest carbon emissions should jointly agree on a global sectoral system that integrates carbon and trade. The Cancun Summit will be a one more step on the road to establishing a workable framework for reducing global carbon emissions. But, a global climate deal focused on economy-wide carbon emissions targets seems to be insufficient.
Following last month’s midterm elections, it’s quite certain that the US will be unable to subscribe to any legally binding commitment at the UN negotiations over the next couple of years. But, also public and sovereign debt will inhibit Europe's leadership, and Japan will be hard-headed in replacing the existing Kyoto framework with one that encompasses all major carbon emitters. While, emerging markets will be keen to perpetuate the current regulatory structure while avoiding any measures that inhibit their ability to grow or that result in foreign accountability of their carbon emissions performance.