The real story at the G20

The press coverage of the G20 summit over the weekend was, understandably, dominated by the row over a so-called Tobin tax on financial transactions. Understandable, I say, because it had a bit of everything: a punishment for nasty bankers, an embarrassment for Gordon Brown as what looks like a last-minute attempt to grab the headlines failed and a simple tax idea that most people understand.

But in reality the Tobin tax suggestion wasn’t discussed all that much behind the scenes. The ministers have now handed over that task to the International Monetary Fund, which will return in April and tell us what kind of model for an international financial tax would work best (there are other models, and the one most people are now focusing features in my news story in tomorrow’s paper).

The real subject of deep and heated discussion – upon which I hear the “sherpas” (political behind-the-scenes negotiators) in all camps were still debating at six in the morning on Saturday – was climate financing. Now, before you start to nod off (as I am inclined to whenever anyone uses combinations of words as unpromising as that) this is important, and interesting. The forthcoming Copenhagen Summit partly revolves around trying to work out who should be paying for forthcoming efforts to cut carbon emissions. This G20 debate was supposed to iron out some kinks ahead of Copenhagen. As it happens there was a nasty disagreement which could end up making Copenhagen a serious embarrassment.

In short, the rich nations went into the meeting expecting the emerging powerhouses such as Brazil, India and China to agree to pay at least something towards these future costs (which include everything from investing in more efficient plants and power stations to creating carbon trading platforms to paying for research to find new green technologies). The emerging nations flatly refused.

In some senses, you can see why. 75pc of histoic carbon emissions came from the developed world. So the climate crisis (as one is supposed to call it) should be seen as a legacy left by rich nations, from which they have benefited in the past, and for which they should pay for the clean-up. However, it’s not quite that simple. 90pc of future emissions will be generated by the developing and emerging world. The rich countries are insisting, as such, that they pay their part.

It was a nasty stand-off and the weekend ended without any agreement on it. This is really worrying for all kinds of reasons. It reminds me of the stalemates we saw in the dying days of the Doha Round of world trade talks, and we know where that ended (though the WTO is planning to exhume the talks in a summit at the end of the month). Anyway, the days are ticking down to Copenhagen, and it looks increasingly like one of those occasions where politicians will have to use grand gestures and statements to mask the fact that in truth they can’t find any common ground at all.