Copenhagen turned out to be a damp squib – derided by the Prime Minister as "at best flawed, at worst chaotic". But the failure to reach a global deal also left UK electricity generators calling for the Government to guarantee the carbon price, or face missing its ambitious green targets.

Few dispute that the key to cutting Britain's emissions by 34 per cent by 2020, and 80 per cent by 2050, is to clean up electricity generation. But the economics are tricky at best. And with little substance from Copenhagen, generators are warning the Government must intervene soon or the nuclear power and carbon capture and storage (CCS) technology the UK needs will not get built.

The problem is the carbon price. Off-shore wind farms are part-subsidised by the Renewables Obligation mechanism, which raises money from within the market to help offset the massive upfront costs.

Plans for four trial CCS plants are to be paid for by a levy of two per cent on customers' bills. But nuclear and widespread use of CCS, retrofitted to coal-fired plants, will rely on the income from carbon permits sold through the European Union Emission Trading Scheme (the EU ETS).

New nuclear facilities are eye-wateringly expensive – as much as five times the cost of gas plants and taking twice as long to build. CCS is so new and untried that there are not even any easy comparisons. In both cases, the business case is difficult to make and the commercially sensible decision is to throw up gas plants instead.Carbon trading was supposed to be the answer.

As the EU ETS progresses, setting electricity producers ever-lower carbon emissions caps, the cost gap between clean and dirty generation should be narrowed. But Copenhagen has floored hopes of a global market that would push up the price, passing the buck back to the UK Government.

Paul Golby, the chief executive of E.ON UK, said: "We cannot simply leave things as they are. We need changes to the market that mean it makes sense to build and operate lower carbon forms of generation."There are two problems. One is the actual price.

Carbon has proved surprisingly buoyant this year, holding up at a decent €14 per tonne. But electricity producers say the figure must be nearer €50 to make the economics of nuclear energy stack up. The International Energy Agency says it must be €33 in 2020 and €73 by 2030 to make low-carbon technologies economic. The other problem is uncertainty.

The price does not need to be high now, but investors need the assurance that it will be. Instead, the signs are tending the other way. In the aftermath of Copenhagen, carbon dropped to a six-month low. And the implications for the UK are even worse.

While Britain races for 34 per cent reductions by 2020, Europe's target is only 20 per cent – leaving the price-setting EU ETS out of synch with what UK generators need. Europe had pledged to raise the bar to 30 per cent in the event of a global agreement at Copenhagen – thus narrowing the gap – but that promise is now void.

A Centrica spokesman said: "The EU ETS should remain central, but in the shorter term it may be necessary to underpin carbon prices in this country until EU prices catch up with our objectives."There are plenty of levers the Government can pull to put a floor under the carbon price.

Alternatives listed by the independent Committee on Climate Change include setting an auction reserve price, or using either a carbon tax or contracts for difference to set a minimum price. A favourite with some generators is a low-carbon obligation similar to that in the renewables sector.

Such a scheme would act as an incentive for both nuclear and CCS investment by requiring electricity providers to supply a certain percentage of energy from low-carbon sources, or buy a permit from clean generators.In the post-Copenhagen confusion, the Government is reticent – acknowledging the need for a credible carbon price, but with no detail about how it might be achieved.

There is little time. For EDF to turn on its first new nuclear plant in 2017 as planned, the investment decision must be made in 2011. And discussions with industry will need to address such thorny questions as what constitutes a reasonable return. Either way, doing nothing is no longer an option. "The Government does not really have a choice, it is just which level they decide to pull," Alistair Scrimgeour, a partner at Deloitte, said.

The city of Copenhagen 'is a crime scene tonight, with the guilty men and women fleeing to the airport'. So said John Sauven of Greenpeace UK after the climate summit broke up.

Is he right ?. Is this is the biggest robbery in history.

As they poured carbon over snow-covered Denmark from their gas-guzzling jets, world leaders were congratulating themselves on securing a deal which will make their backers and financiers a trillion pounds a year.

These riches will come from buying and selling permits, the so-called 'carbon credits' which allow industry and electricity generators in developed countries to emit carbon dioxide.Forget 'Big Oil' - this is 'Big Carbon' making the most of a 'business opportunity' that was created by the first climate treaty at Kyoto in 1997.

The frenzied negotiations we have just seen were never about 'saving the planet'. They were always about money. At stake was this new 'climate change industry' which last year ripped off £129billion from the global economy and is heading for that trillion-pound bonanza by 2020 - but only if the key parts of the Kyoto treaty could be renewed.

With the treaty due to expire by 2012, unless it was replaced, the money tree would fail. Hence, all the power and vested interests of big business were brought into play, stoking up the panic over climate change to create an atmosphere where the parties could keep the money flowing.

Carbon Trading is barely 13 years old yet the scale of the industry is astonishing. Overall control lies with an obscure  committee created by Kyoto, The Clean Development Mechanism Executive. It issues firms with the 'golden tickets' known as Certified Emission Reductions (CERs).

At Kyoto, Western governments set targets to cut emissions. In order to achieve this, they set 'caps' on the amount of CO2 a company can produce. However, if they go over these limits, they may buy permits from firms who have not used up their quotas.

The developing world is not subject to the same caps as the West so they can generate CERs which are then traded by banks. The actual emissions don't change, it's merely a matter of how much you have to pay for them. For example, in 2006, the NHS spent £6million on carbon permits to keep patients warm. This was the real business in Copenhagen last week.

The game was given away by the head of carbon markets for Merrill Lynch, Abyd Karmali - who is also president of the Carbon Markets and Investors Association.As campaigners worried about the prospect of the talks failing, Karmali was happily explaining that the envoys would probably decide to extend the 'Kyoto Protocol' even if they could not reach an agreement on emission cuts.

It is those  words which revealed what was really going on. The carbon permits come mainly from rich industrialists in the Third World and state enterprises in China, created out of mythical savings in carbon emissions.

This is precisely what is happening in the west-India state of Gujarat, where the giant Tata conglomerate - which is closing down the Corus steel works in Redcar - is building a giant new coal-fired power plant. It is four times the size of the proposed Kingsnorth power station in Kent, to which the Greens so violently objected.

Tata's new plant, which is the same design as Kingsnorth, will increase India's carbon emissions by 643million tons over its lifetime, and produce in a year CO2 equivalent to an eighth of the entire UK electricity industry.

Yet because it is more efficient than conventional plants, it is deemed to reduce the average carbon emissions of India's electricity generation system per unit of electricity supplied.

By this convoluted reasoning, not only does it qualify for cheap, green development loans from the World Bank and the Asian Development Bank, it will be given over £500million in free carbon credits by the UN to be sold, via brokers and financiers who all take their cuts.

They will be bought by the likes of British electricity generators. That is but one example of the insane system created by the Kyoto treaty, which was renewed in Copenhagen.