In the wee hours of Saturday, December 15th, the climate negotiators agreed upon a "roadmap" for international climate talks between now and 2012, when the Kyoto Protocol commitment periods expire. The text calls on all countries -- both developed and developing -- to commit to taking "commitments" or "actions" to mitigate climate change. We doubt that binding caps constitute "actions" but then again, we may be mistaken.

Our take on the situation is that it looks like international climate policy is moving towards a State by State model, with each country choosing its own path. These disparate efforts may be tied into some form of international trading scheme, although it is unclear how such a scheme would work given that the country-specific approaches are apt to be different. The market for post-2012 CERs should be quite interesting indeed.

It also seems likely that the export of carbon-reducing technologies from Western countries to places such as China and India will accelerate in the years ahead, as technology transfer continues to emerge as a key climate policy. Look for lots of clean coal technology to flow to China, for example -- a path perhaps foretold by the recent CDM decision to make certain clean coal technologies CDM eligible.