The United Nation's effort to craft a climate pact to succeed the Kyoto Protocol continued Monday with political leaders wrestling over how to tackle global warming while rescuing the falling global economy.

The debate could have a broad impact on the growth of the worldwide greentech industry, which has grown largely as a result of government policies.

Those policies, some of which provide big tax breaks and other lucrative subsidies, have caused a boom in buildingsolarand wind power plants and developing biofuels (see Lawmakers Approve Energy Tax Credits, Bailout, Spain Approves 500MW for Solar and Japan Promotes Carbon Trading, Hybrids). The big question for the future is whether U.N. members will see green subsidies as a way to build their domestic economies, or be a drain on it.

Delegates from 187 nations are meeting in Poznan, Poland over the next two weeks to pave the way for an adoption of a new climate change treaty after the current emissions-cutting targets sunset at the end of 2012. The delegates first met in Bali, Indonesia last year. Poznan will narrow the discussions from Bali. Delegates hope to come up with a definitive agreement in Copenhagen, Denmark at the end of 2009.

Thirty-seven industrialized countries ratified Kyoto, which sets goals for cutting greenhouse gas emissions to an average of 5 percent below the 1990 levels by 2012.

Although Kyoto was considered groundbreaking, its ultimate success in reducing emissions remains a subject of debate (see Japan Proposes $4B to Cut Emissions). Last week, the World Meteorological Organization said the emission of carbon dioxide, one of the greenhouse gases, reached a record high in 2007. 

Whether fighting global warming will incur high financial costs also has been a hot debate topic. Some political leaders are worried about mandates that would require industries and countries to spend millions or even billions to meet at a time of ailing global financial health.

Others have argued that climate change initiatives will lead to new jobs as businesses embrace new technologies to generate greener energy and curb greenhouse gas emissions.

"Poznan really marks the moment in which serious negotiations can begin – to narrow down all of those ideas into what then needs to become an agreement in Copenhagen," Yvo de Boer, the U.N. climate chief, told The Associated Press. "Finance is very much at the heart of the solution in Copenhagen."

The United States didn't agree to Kyoto because President Bush said he believes the treaty would harm the economy. He also criticized it for being ineffective because developing countries, some of the worst polluters in the world, are not bound by it.

The United States is expected to participate more actively in the U.N. effort with the incoming administration. President-elect Barack Obama is a strong supporter of renewable energy and policies to fight climate change (see Analysts Call Obama Election a Win for Greentech and Presidential Picks Cast Solar Ballots).

Over the next two weeks, U.N. delegates will discuss and try to resolve a myriad of issues, including setting new emissions goals for industrial countries, providing incentives to reduce deforestation and promoting technology transfers to developing countries to help curb emissions.

The economic impact has also led to numerous rounds of negotiations within the European Union, which is working on a climate change pact to reduce emissions to 20 percent below the 1990 levels by 2020. The U.E. leaders hope to agree to the pact when they meet on Dec. 11 and 12.

EU members such as Poland have lobbied for measures to protect their coal-fired power plant producers. Among the concessions sought by Poland include free emissions credits for power plant producers, who otherwise would have to pay for them under a proposal to revise EU's carbon emissions cap-and-trade system, reported Reuters.

The cap-and-trade system currently issues emissions credits free to countries and businesses. Those who pollute above limits then have to buy credits from those who emits less than the cap.