However, just because the details are vague - and just because whatever is agreed will fall short of what was being touted 12 months ago - does not mean that Copenhagen will have failed. Most likely, a bad agreement to curb global emissions of greenhouse gases will be better than no agreement at all.
So what constitutes a bad agreement? Essentially the promise to do more of the same; to use familiar mechanisms to cut emissions; mechanisms that have not actually failed, but whose credibility is tenuous. To caricature, our political leaders will reject the tough option, which truly could put CO2 emissions on a downwards path, in favour of fluffier solutions, which somehow imply that the planet can be saved if consumers do nothing more onerous than use low-energy light bulbs.
The tough option is for governments to use taxation to curb emissions. Impose a levy on the CO2-equivalent that, say, a chemicals-processing plant churns out and there is a clear incentive for its owner to cut emissions. And, to the extent that the taxation is passed to customers via higher prices, the signal is sent down the chain of consumption.
It's nice and simple. The government sets the rate of levy, arranges for emissions to be monitored and verified, then sits back to wait for its signal to do its work. Yes, but in practice taxation is more complicated because special interests soon clog the works. So, for instance, before we know it, politicians are exempting plants in depressed regions or threatened industries. That said, if the political will were there, taxation would be the effective option. But it's not, so the preferred solutions - the fluffier ones - involve a combination of putting a price on CO2 emissions via a market place and using government revenues to subsidise so-called clean energy.
To date, using the market to price carbon has been fluffy because the market mechanism has not been allowed to work. That's not surprising. After all, markets - real markets - are every bit as tough as taxation. Yet there is no serious sign that either consumers in the developed world or their leaders are ready to accept the clamp on their behaviour that true carbon pricing would bring. So, stretching out to the end of the present global agreement on tackling climate change - the Kyoto Protocol - and most likely beyond we will have damage limitation by pretence. The cynical interpretation of this is that nations tacitly conspire in the fiction that they are making positive steps towards cutting greenhouse-gas emissions, even though emissions rise relentlessly year after year.
And the most imaginative part of this fiction lies in the so-called clean development mechanism and the concept of 'additionality'. Behind that ugly word is the idea that CO2 emitters in the developed world can compensate for any excess emissions if they buy carbon credits from newly-built plants that reduce emissions in the developing world. To the extent that it is cheaper to reduce emissions in a low-cost region than a high-cost one, that makes sense. However, additionality is a fuzzy concept, which may be why there is a substantial bureaucracy devoted to authenticating - and just occasionally rejecting - putative clean-development schemes.
Yet there is a case for asking, what's the point? If you are a critic of the clean-development mechanism, you think it's based on logic that has passed through the looking glass and is really a way to force the rich world to subsidise energy-generating schemes in the developing world, especially China. If you are sympathetic, you might ask, why restrict plausible schemes in the developing world by forcing them to climb the hurdle of additionality?
Either way, the clean-development mechanism - part of an elaborate fiction or not - looks set to remain a key tool to limit climate change. And that should be good news for a shareholding in the Bearbull Speculative Portfolio - indeed, one that I bought with the Copenhagen conference in mind. The company concerned is Trading Emissions, whose existence depends on the clean-development mechanism and which has a portfolio of 57m carbon credits, which it aims to sell at a profit.
I had hoped that Copenhagen would kick Trading Emissions' shares into life, though with their price at 94p (against net assets of 150p) there is little sign of that. Nor has the possibility of a merger with Leaf Clean Energy, which invests in clean-energy projects mostly in the US, shaken the price out of its lethargy. Then again, the logic for a merger between these two looks tenuous. They share the same fund manager and are substantially controlled by the same three institutional investors, who may have felt compelled to engineer a merger in the hope of closing the gap between the share price and book value of both companies. Beyond that, they seem to have so little in common that a merger could look like an acknowledgement that they don’t know what else to do. To which, in the case of Trading Emissions, the response would be: be patient; just wait for the fiction behind the carbon markets to turn the value of the portfolio into indisputable fact.
