It looks like Europe's politicians are spoiling for a fight. Whether its US climate change negotiators or the global airline industry they don't seem too fussed. Lines are being drawn in the sand.

This week saw two clear warning shots fired from the European parliament. Proposals to pull airlines into the Europe's emissions trading scheme may represent a compromise and may have pulled off the unlikely feat of annoying both environmentalists and airline execs, but they are tougher than they could have been and mean that despite the aviation industry's vocal protestations flights should now be included within the scheme within four years.

Meanwhile, the resolution detailing Europe's position ahead of the UN's Bali climate change conference may have been a formality, but it again underscores how serious they are about getting a meaningful agreement in place. Given that US negotiators are reported to be again attempting to water down the IPCC's report on the risks and opportunities posed by climate change it looks like we are due for one almighty political scrap next month. The US is likely to be isolated with even its old ally Australia set to ratify Kyoto if next week's election goes as expected, but sadly that does not make agreement inevitable.

It is difficult to overstate the importance of the conference. The green business movement is now so entrenched that it will continue regardless, but its progress will become far easier with binding emission targets and a global price on carbon through an integrated cap-and-trade scheme.

With such measures in place suddenly many of the developments we have seen this week, such as urban wind turbines, Eurostar's extension of high speed rail links, Manchester's congestion charging plans, sneeze-free green offices, and even solar-powered mobile phones, could quickly become the norm.

Moreover, such an agreement would also limit the sizable business risk posed by a patchwork of national and regional environmental regulations; something already evident in the polarisation of US green policy, the otherwise admirable plans for a UK climate change bill and talk of a London ban on plastic bags.

Some businesses, like many in the aviation industry, will prefer to keep their heads stuck in the sand, but those who fully appreciate the long term risks and opportunities posed by climate change should be cheering on Europe's negotiators as they pack their rhetorical boxing gloves into their suitcases.

Have a good weekend,

James