Ahead of COP21 I was on the panel of a special Twitter chat (#susty7) organised by Thomson Reuters. The ten questions addressed during the chat covered crucial topics that will determine the success of COP21, ranging from questions about leadership and key players to the roles of the private sector and investors.

Q 1: What does leadership at Paris look like from your perspective?

Leaders have to finally take the necessary steps to introduce a fair and reliable carbon pricing system. A carbon price is a powerful economic signal that gives polluters an incentive to stop their polluting activities and reduce emissions. Carbon prices are also a much better way to support the shift to a low-carbon economy than subsidies for renewables.

How should carbon prices be established? Carbon taxes may be a more promising way of establishing a carbon price than emissions trading schemes, which tend to lower the price by issuing too many tradable pollution permits. Pioneers in the introduction of carbon taxes include Ireland in Europe, Chile in South America and Quebec in North America.

Q 2: Who should we be watching carefully?  Why?

Oil-rich Gulf countries haven't made up their mind yet whether to embrace the low-carbon transformation given that key sources of revenue from fossil fuels are at stake. The world's 14th largest polluter, Saudi Arabia, was the last G20 country to submit its emissions-reduction plan to the UN just three weeks ahead of COP21. The Climate Action Tracker (CAT), an independent scientific analysis, has judged the country's plans to be "inadequate" in contributing to the goal of keeping the global average temperature increase within 2°C over pre-industrial levels.

Q3: Who could make the biggest difference, either way?

The biggest polluting countries—US, China, Europe, Russia & India (which account for around two thirds of global emissions)—need to agree on a mechanism to review climate-change targets post-COP21. This is at least as important as actually coming up with ambitious emissions-reduction targets in the first place. Such a regular review mechanism should be made legally binding in a new global agreement.

Q4: Is the fossil fuel industry the problem or part of the solution?

Ten major global fossil-fuel companies recently called for an effective COP21 agreement. However, the pledge was relatively vague, and should be followed up with clear goals and actions. Understandably, non-fossil fuel companies have been more eager to pledge tough climate action, e.g. the American Business Act on Climate includes big companies from the technology, retail, clean energy, food and agriculture sectors.

Q5: Is new regulation likely to come out of this meeting soon enough to matter?

Regulatory changes are likely to happen, but COP21 is about strong political agreement. A robust agreement with plenty of legally binding measures would send strong signals to business and create more predictability. An ensuing virtuous cycle would then also include regulation.

Q6: What can we do in the short term to get emissions moving downward, if anything?

Focusing more on energy efficiency, the "invisible fuel", is a cheap and clean energy solution—and the potential for more efficiency is still vast. Better storage, distribution and finance systems to unlock this potential hold a lot of promise in combating climate change.

Q7: Will the real decisions be made in the private sector, with the rest of us looking on?

Addressing climate change is about collective action. The private sector will react to signals from policymakers, consumers and the wider public. The spotlight at COP21 is on policymakers, but the overall response has to be multi-sectoral, integrated and coordinated.

Q8: Can investors really matter on climate, beyond around the edges?

Investors matter—both through investments in low-carbon assets and through their support for tough climate action. Asset managers are increasingly concerned about the costs of inaction on climate change. A recent report by The Economist Intelligence Unit, The cost of inaction: Recognising the value at risk from climate change, states that climate change is expected, on average, to cause US$4.2trn of present value losses to current manageable assets by the year 2100. If global average temperatures rise by 5°C or 6°C the losses are projected to be much higher, at US$7.2trn or US$13.8trn respectively.

Investors can play a vital role by supporting low-carbon projects and new technologies, exemplified by a new global clean energy research project launched at COP21. The recent divestment trend matters too. To date, 430 institutions and 2,040 individuals across 43 countries, representing US$2.6trn in assets, have pledged to divest from fossil-fuel companies. Among the global players that have decided to divest from fossil fuels are Norway's sovereign wealth fund (the world's largest) and some of the world’s biggest pension funds.

Q9: Who will pay most for lack of real action in Paris?

The UN has highlighted in detail how economically, socially and/or politically marginalised groups are already disproportionately affected by the effects of climate change. Future generations, however, will suffer the most from inaction by leaders of this generation. For governments, the economic costs of inaction are staggering: in monetary terms, global warming by 6°C represents present value losses worth US$43trn, 30% of the entire stock of manageable assets.

Q10: What would be a good result from the talks?

As a recent EIU report highlights, based on countries' climate pledges so far, it is highly unlikely that a final agreement at COP21 will hold the global average temperature increase within the important 2°C threshold. However, COP21 can still become a milestone in global action on climate change if a strong political agreement emerges with a clear commitment to work towards carbon pricing and the implementation of an effective mechanism to review targets regularly post-COP21.