Bali Boo Hoo Boys Win the Day - but what have they really won?

The delegates at Bali have eventually come up with a road map for progress on climate change. Whilst this is undoubtedly better than no deal at all, as economists we like to see numbers. It is the numbers that are conspicuous by their absence.

We will not comment at length in this blog as this is headline news and more to do with politics than economics.

However, the political wrangling was impressive and the pincer movement by India and the EU that isolated the US was an excellent example of orchestrated political maneuvering. I expect the US and George Bush are secretly or not so secretly livid.

The booing of the US delegate will be remembered for many years to come as a pivotal moment in the history of climate change action. Political drama at its best.

So where are we now:

The "Bali roadmap" initiates a two-year process of negotiations designed to agree a new set of emissions targets to replace those in the Kyoto Protocol.

So now we have 2 years of negotiations ahead on how to cut emissions. It all comes back to the stand-off between developing countries who have growth as a priority and the developed nations who want all countries to cut emissions proportionately even though the current climate change crisis was due primarily to Western and not LDC pollution.

There is no simple solution but one that involves a transfer of green and clean technologies (as requested by India) seems a logical way forward.

Climate deal sealed by US U-turn [BBC]

The final paragraph of the BBC report simply states:

"We need to find a new mechanism that values standing forests," said Andrew Mitchell, executive director of the Global Canopy Programme, an alliance of research institutions.

"Ultimately, if this does its job, [deforestation] goes down to nothing."

Mr Mitchell said the only feasible source of sufficient funds was a global carbon market.

But many economists believe mandatory emissions targets are needed to create a meaningful global market.