Fossil fuels, such as oil and natural gas make development possible but they also release carbon dioxide into the atmosphere. Surfing the Internet, driving a car or heating or cooling a building all require the burning of energy. Without energy, industrial societies could never succeed.

As the developing world is seeking to become part of the global economy, they want to be able to burn whatever fuel they need to in order to raise the standard of living for their citizens. But many scientists believe that man-made emissions are harming the earth’s atmosphere. Climate changes could lead to many environmental problems, such as shifting seasons, higher sea levels and desertification. There is no international consensus on how to deal with this problem without incurring huge financial costs. 

The issue of global warming currently comes under the jurisdiction of two major international agreements: 1992 Framework Convention on Climate Change and its offspring, the Kyoto Protocols. (The ratified the former, but not the latter.) In 2012, many of the provisions of the Kyoto Protocols will expire, so the United Nations Framework Convention for Climate Change organized the Montreal Climate Change Conference to try to negotiate the next steps. Held from November 28^th–December 9, 2005, close to 200 countries attended the conference. While a comprehensive agreement on how to move forward was not achieved, progress was made.  

During the conference, the rulebook of the 1997 Kyoto Protocols was adopted. The rule book spells out how emissions will be reported and verified. It also establishes a clean development mechanism, giving credit to developed countries for helping developing countries produce clean energy by investing in sustainable development projects. This mechanism will be funded by developed countries, who committed more than $13 million for 2006-2007.

An example of this mechanism is a Honduran sewage-treatment plant funded by Canada.[1] Montreal also produced an agreement on emissions trading, in which countries who produce too much greenhouse gases can buy credits from countries that are under their limit. So if Russia meets its targets for reduction, but Canada has not, Russia can sell credits to Canada and be rewarded for its success.

Another major achievement of the Conference was the commitment of the United States to join non –binding talks about a climate change agreement to replace Kyoto after 2012.  

Some believe that instead of a comprehensive agreement on climate change, smaller regional efforts or initiatives coming from industry may be the best way to move forward. Paralleling the UN Conference in Montreal, close to 200 U.S. mayors met and signed the “Mayors Climate Protection Agreement,” pledging to meet or exceed the Kyoto emissions reductions.

Several U.S. states in the northeast have been working on a joint agreement to limit carbon dioxide emissions from power stations. California has also created its own program to reduce greenhouse gases.

While in June 2005, the U.S. Senate rejected a measure calling for mandatory limits on emissions linked to global warming, it did pass a non-binding resolution to start mandatory greenhouse gas reductions that would not also harm the U.S. economy.  While no specific policy recommendations were offered in the non-binding resolution, it did signal the entrance of global warming into the debate about energy. The U.S. House of Representatives did not pass any similar legislation.

The Bush administration has already committed to provide $5 billion to research climate change.[2]  This figure includes $3 billion for the Climate Change Technology Program, which is a multi-agency effort to develop technologies that would decrease greenhouse gases, such as a hydrogen fuel initiative, Coal-Fired, Zero-Emissions Electricity Generation and research projects on fusion energy. Nearly $2 billion has been set aside for the Climate Change Science Program and $200 million for climate-change-related international assistance programs.[3]   

In June 2005, before the G-8 meeting in Scotland, a group of 24 companies, including BT, HP, Toyota , Siemens and Volkswagon proposed a global emissions trading scheme that would set limits on how much greenhouse gas countries could emit and would define "emissions rights". Companies are seeking these types of limits because they are interested in more certainty for long-term investments and a more level playing field.[4]  
 

The Bush Administration has been pushing the Asia-Pacific Partnership (a partnership among the United States, Australia, Japan, China, South Korea and India) for clean development as an alternative mechanism to deal with global warming and climate control. This would be a voluntary partnership that would not focus on mandatory emission reductions, but instead would address environmental issues through economic growth and technology. The United States, as well as Australia, did not sign the Kyoto Agreements because developing countries did not have to curb emissions and they believed the economic hardships would be great. The Bush administration estimated that it would cost $400 billion to the U.S. economy and that 5 million jobs would be lost.[5]  
 

China’s assertion that the Kyoto process is the main forum for solving green-house gas emissions will make it difficult for the Bush administration to promote the Asia Pacific Partnership.[6] As the 2^nd largest greenhouse gas emitter, China’s commitment to any climate agreement is crucial to its success. Given the pace of its development and the increase in the number of coal-fired power plants, China may surpass the Unites States as the biggest greenhouse gas producer in the next twenty years.[7] The United States agreed at Montreal to join the non-binding discussions about a climate change agreement to replace Kyoto after 2012 in an effort to try to bring developing countries, such as China and India into the process.