Financial support for developing countries is a core issue under the United Nations Framework Convention on Climate Change (UNFCCC). Industrialised countries strongly emphasise the potential role of carbon markets in mobilising the required finance.

This report by Wolfgang Sterk, Christof Arens, Florian Mersmann, Hanna Wang-Helmreich and Timon Wehnert analyses the international climate negotiations at the UN climate conference in Durban in December 2011.

In this paper, six developing countries with possible domestic ETS are analysed: Brazil, China, India, Kazakhstan, Mexico, and South Korea. Brazil has set up a stock exchange for voluntary carbon units which may precede a domestic trading scheme. China has made concrete steps towards the creation of regional ETS in various cities and provinces.

This paper presents comprehensive proposals for the post-2012 climate regime: the scale of the challenge, emission targets for industrialised countries, increased actions by Southern countries, financing, technology, adaptation and deforestation. The proposals are based on ongoing research by the Wuppertal Institute.

The international climate negotiations have seen endless struggles between countries from South and North for almost 17 years, ever since the initiation of negotiations by the International Negotiation Committee for the UNFCCC.

This article concludes that the outcome of the Bali meeting is insufficient when compared to the nature of the challenge posed by climate change. However, it can nevertheless be considered a success in terms of 'realpolitik' in paving the way for the negotiations ahead, because some real changes have been discerned in the political landscape.