From a business point of view, the global goal will have the strongest signal effect for our investment programmes. Ambitious and specific global goals will give a clear sense of the direction and speed at which politicians will pursue the transition to a low-carbon society. Caps and committments are the most important policy elements.

In each market, caps and committments will effectively set a price (direct or indirect) on emissions and allow companies to create value by lowering their emissions. The strength and credibility of these caps and committments are mutually-reinforcing: if all countries have deemed the efforts of others to be acceptable, they will be under pressure to preserve and live up to their own promises.

The extent of geographical coverage is important; any major player opting out of the agreement will create the spectre of carbon leakage, a ’race to the bottom,’ and the future collapse of the agreement. If sectoral coverage is not sufficient – for example, if international transportation or agriculture are not impacted by the agreement – the fairness, effectiveness, and efficiency of the agreement will be called into question.

Financial transfer arrangements will have to be put in place to assist the developing world with both mitigation and adaptation. From a business perspective, a large offset market will allow for more effective allocation of capital to abatement opportunities and help keep costs for capped entities manageable. Additional public funds will help stimulate investment in more expensive technologies in the developing world and reduce ‘lock-in’ of emitting sources. Funding for adaptation will help support sustainable development and lower emerging market risks for businesses.

Transparent and credible measurement and monitoring of reductions will be essential to create trust in the caps and commitments mentioned above. Progress also needs to be made on the measurement and monitoring of reductions from forestry projects. If it does not appear that emissions from deforestation are being effectively handled, confidence that we will be able to meet overall targets will be undermined. The framework also needs to take up measurement and communication of emissions embedded in consumer products. Without informed consumers, the necessary changes will be much more difficult.

Emerging low-carbon technologies will not arrive on their own – and even a carbon price is unlikely to deliver them in time. There is much to be gained by concentrated international action to bring down the costs of emerging technologies and accelerate their route to market.

Regardless of how well the negotiations at COP 15 fare, some issues will require ongoing negotiation. This is particularly true of trade and competitiveness issues, as well as the possibilities to harmonize carbon markets and other national/regional rules and standards across borders. An effective agreement will create room for progress on those issues that will require ongoing negotiation.

A successful agreement in Copenhagen must meet other important, more general requirements: It must be sufficiently ambitious, it must be perceived as broadly fair by all participating parties, it must support economically efficient solutions to climate change, and it must be perceived as transparent and difficult to subvert. Should the agreement score very badly on any of these aspects, investors, managers and consumers may not trust that the climate regime will hold together. Here too, however, it is important to note that success and failure are not black and white. If, as appears likely, caps and committments in Copenhagen do not add up to the reductions recommended by the science, this does not mean that the level of ambition can not be raised over time. Likewise, many of the key arrangements are likely to be economically inefficient at the outset, but the regime may still allow space for improvement via ongoing collaboration and negotiation.

The elements tracked in this ’Scorecard’ are themselves fundamental to creating positive perceptions of the ambition, efficiency, fairness, and transparency of the climate regime, and because they are more concrete, they are more useful to track.