There has been little progress in Copenhagen on the difficult issue of how to deal with around 10 billion excess Kyoto credits (AAUs) that are legally allowed to be carried over, or banked, into any second commitment period under the Kyoto protocol.
This "hot air" could crash global carbon prices if it was ever released in bulk. This is in no one's interests, especially not those of potential sellers such as Russia – which holds the biggest quantity by far – because it would render the credits effectively worthless.
Someone has yet to come up with an idea of what else to do with them. There have been various proposals at EU level, including a Polish proposal to restrict sales to other countries. But environment ministers could not agree a position when they met in November.
According to Tomas Wyns, an emissions trading expert at campaign group CAN-Europe, this vacuum in the EU's negotiating position is partly responsible for the lack of progress on the AAUs issue in Copenhagen.
Observers have feared a fudge coming for some time and that is exactly what appears in the latest draft negotiating text, Mr Wyns says. This invites the UNFCCC's Subsidiary Body for Scientific and Technological Advice (SBSTA) to look into the issue after Copenhagen.
Environment commissioner Stavros Dimas stressed the danger lurking in Copenhagen: "If we have this 10.7bn of unused AAUs banked in the second commitment period, no matter what ambition level we shall agree here in Copenhagen or how much the EU will reduce, it will not be enough".
There is an alternative scenario to the fudge. Russia has suggested it may give up its AAUs. But it is unclear what it is seeking in return. Russia could demand a single new climate treaty rather than a second commitment period under the Kyoto protocol.
This would add Russia to a growing list of states pushing for a single new legal framework to replace Kyoto: the US, the EU, Canada, Australia, and Japan. But Mr Wyns believes that the G77 and China would walk out of the talks if such a proposal was made.Follow Up: