Money is the key to the success of Copenhagen

You think it's about greenhouse gases. You think it's about carbon emissions. And it is. But the Copenhagen agreement on climate change that the world community will attempt to sign in December is just as much about money – enormous, mind-boggling amounts of money.

In brutally simplistic terms, the essence of any deal will be to pay the developing countries of the world, led by China and India, to cut back on the carbon dioxide pouring out of their now-mushrooming economies, which will come to represent 90 per cent of all future emissions growth, and the inducement for them to do this will have to be substantial.

It has hardly dawned on the general public just how big are the sums of cash that the developing world is seeking, and that the rich world will have to go some way towards providing, if the vital pathway to keeping global temperature rises below C is to be mapped out.

But they are truly colossal, and the gap between the potential donor countries and the recipients may be unbridgeable; it is finance, rather than the setting of emissions targets, which is more likely to be the deal-breaker in Copenhagen.

Ever since the first UN global warming treaty was signed in 1992, the rich nations have accepted that they have a special responsibility over climate, as we caused the problem in the first place – most of the CO2 that has gone into atmosphere has been put there by 200 years of western industrialisation.

Now we are asking China and its colleagues in the G77 group of poorer nations to grow – and so bring their people out of poverty – in a different low-carbon way from the way in which we grew, which is difficult and expensive; do as we say, not do as we did. And it is accepted on all sides that if they are to do this, we must help them.

They need help for two essential tasks, which in the jargon are mitigation and adaptation. Mitigation means cutting back on carbon emissions, by substituting renewable energy projects, say, for coal-burning power stations; adaptation means coping with climate change which is now unavoidable, such as building enhanced flood relief schemes to deal with the threat of climate-change-induced sea-level rise. It is obvious that all of this will be costly.

Just how costly the developing world thought it would be became clear at the end of August, when the G77-plus-China, as the nations are collectively known, put forward a formal proposal for financing a new climate agreement. Their "enhanced financial mechanism" suggested that the rich countries should pay between 0.5 and 1 per cent of their gross national product every year. For the European Union, this would be between $90bn (£55bn) and $180bn annually; for the US, between $70bn and $140bn; for Britain alone, between $13bn and $26bn. The full total would be between $200bn and $400bn, a range from nearly double to nearly four times the amount of all current overseas aid flows. Moreover, it would have to be on top of existing aid, the developing countries said – it must be "new and additional", above all current overseas development assistance.

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