Global warming talks just hot air?

Solar panel facility run by the Western Massachusetts Electric Company in Pittsfield, Massachusets Investment in green technologies appears to be slowing

"Hot weather always gives a good result," muses one veteran of countless United Nations climate conferences.

"Cold weather, like in Copenhagen, that is the problem."

It would be worrying if it were true, but world leaders will be forgiven for hoping so.

Last year, in the bitter cold at the Danish capital, they promised £100bn a year to tackle climate change and its effects by 2020 - mostly from the private sector.

Now, as the 2010 UN Climate Change Conference continues in Cancun, Mexico, even that limited pledge is looking optimistic.

Money dries up

The Kyoto treaty put a cost on carbon emitted in some western countries, and allowed polluters to pay for projects to reduce emissions in the developing world.

Start Quote

We've been through a very significant financial crisis, and environmental projects are clearly affected”

End Quote David Peniket ICE Futures Europe

But that treaty expires next year.

The latest World Bank report for 2009 showed investment in new projects down by more than half.

"Pretty much as expected we see a further stepping back on all sides [in 2010]," warns Neeraj Prasad, the World Banks' carbon specialist.

The broader picture is little better.

VB Research's "Clean energy pipeline" monitors money coming from venture capital and private equity funds to promising new clean tech companies.

Far from rising, global investment actually fell in the last few months. In Europe venture capital funding is at its lowest level for two years.

Total global investment in clean energy has changed little since the start of 2009, in the midst of the recession, according to Bloomberg New Energy Finance.

Corporate spending?

Harder to track is the money companies are using to tackle their own emissions.

Wind turbines in northern France Some analysts suggest lower emissions caps would spur investment in renewable energy

Firms such as Pepsi, Tescos and Nike have joined partnerships to monitor and, ideally, reduce their emissions.

Walking through one of its British supermarkets, Tesco's director of corporate and legal affairs, Lucy Neville-Rolfe, showed me around the products where they've cut emissions - such as milk, and flowers from Africa.

Sometimes a special Carbon Trust "footprint" verifies the achievement.

Doing this often saves companies like Tesco money - so they're keen to do more.

But they accept they can't do it all.

"Obviously having the right framework for long term investment in renewable technology would make a big difference," says Ms Neville-Rolfe.

Disappearing funds

Some of that investment should come from European Climate Exchange - where European companies buy and sell their permits to release carbon dioxide within the EU's trading system.

Cancun Will the hot weather in Cancun focus the minds of the delegates?

Based in the City of London it's a fast growing market - but the recession has meant companies no longer needed all their permits, and prices have fallen.

"We've been through a very significant financial crisis, and environmental projects are clearly affected," says David Peniket from ICE Futures Europe.

If you want more investment, he suggests, you lower emissions caps, meaning fewer permits, higher prices and a better reward for those who avoid polluting.

But it's frequent changes in the rules that worry many investors.

Special subsidies for renewable energy in Spain and Germany have been unexpectedly lowered.

The EU says it's looking at changing the rules on what types of projects in developing countries can get money from its carbon market.

"I don't mean to be hyperbolic, but it's a little bit like watching someone you're close to self harm," says James Cameron founder of Climate Change Capital, and an advisor to the British Government.

There is real frustration amongst those who believe investment can flow if only the rules would be set - and then stay the same.

They may not be right though.

Bjorn Lomborg, a Danish economist who is skeptical of the UN process, argues pricing carbon is itself just too un-reliable. "Fundamentally a trading system is very inefficient," he says.

Deal? What deal?

Because of the malaise, few think we'll see a global deal this year.

The US didn't sign Kyoto and many there think it hasn't worked.

"We've been negotiating the wrong deal," says Bill Moomaw, professor of environmental policy at the Fletcher School in Boston. "Who wants to come home and say, 'I've agreed to share some burden'," he jokes.

He'd like to see the focus be on development and specific incentives.

Some go further; saying a global deal on measuring emissions, for example, would be enough to spur national and regional measures.

"The reason the private sector isn't doing as much as they need to is because the national incentives aren't in place for them to do that," says Michael Levi an energy economist at the US Council on Foreign Relations. Cancun, he implies, simply isn't that important.

To Mr Lomborg - touring the world to argue against the current process - governments need to invest their own money in new technology for the future, and give up on costly subsidies and inefficient markets.

With expectations so low many investors haven't gone to Cancun this year.

Those who do will be hoping the hot weather inspires leaders to find a way of delivering on their promises.

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