Investors would be hard-pressed to find more of a hot-button issue than climate change and carbon-dioxide emissions. The staff at Portfolio 2020 prefers to view the world in green and gold rather than black and white; we’re more concerned with identifying profitable investment ideas and remain skeptical of partisan rhetoric and ideology.

For investors, that’s the overarching lesson of the United Nations’ recent Climate Change Conference in Copenhagen.

In certain quarters, hopes were high that the summit would yield a legally-binding agreement with specific targets for carbon-dioxide emissions and provide for monitoring to ensure that countries meet their obligations.

Not only were US President Obama and Chinese Premier Wen Jiabao slated to attend the conference, but the two nations–the world’s largest carbon emitters–had also announced reduction targets for carbon-dioxide emissions. The US commitment to cut emissions 17 percent from 2005 levels by 2020 aligned with legislation under consideration in Congress, while President Hu Jintao set the goal of reducing China’s carbon emissions relative to its gross domestic product by 40 to 45 percent over the same period.

Ultimately, hopes for a legally-binding set of targets for emissions reductions were dashed by the same problems that have afflicted the UN’s 17-year effort to address climate change on a global level: Producing a consensus at a conference attended by 193 nations was always a tall order. In reality, a commitment to limit the rise in global temperatures to two degrees Celsius and raise 100 billion US dollars annually by 2020 to help developing countries fight climate change was a reasonable outcome.

Although the scope and high profile of the latest UN-organized climate summit inherently makes it a focal point for media coverage and analysis, the Copenhagen Accord was far from a watershed moment in the effort to limit greenhouse gases–if anything, the tepid statement serves as a reminder that the political will to reduce carbon emissions is broadly intact, though the political and economic complexities make any sort of global agreement unlikely.

Some investors and reporters may be disappointed that the much-hyped conference failed to produce a clear set of standards, but such clarity is, paradoxically, the enemy of investors and journalists alike. Whereas a muddy outlook provides ample fodder for reporters to generate stories and speculate about outcomes, savvy investors can identify key secular trends before a clear buy signal is broadcast to the herd.

The huge run up in share prices of renewable energy names after the Obama administration and ushered its stimulus bill through Congress is a case in point, as my colleague Elliott Gue pointed out in the most recent issue of The Energy Strategist.

Investors regarded these developments as a sure-fire catalyst for alternative energy stocks, pushing share prices to rich valuations. Of course, this investment hasn’t turned out to be the near-term slam dunk that many had anticipated; alternative energy sources are a part of the domestic and global solution, but require significant upgrades to older power grids. And two of the most popular alternatives, solar power and wind power, don’t generate consistent enough output to serve as base-load power sources.

How, then, will governments around the world meet existing and forthcoming targets for carbon emissions reductions? In 2007 the European Union set a goal of lowering greenhouse gas emissions 20 percent by 2020, while China and India have also established ambitious plans to reduce their carbon emissions as their economies grow.

Long maligned, nuclear power is now regarded as the transitional fuel that will put these targets within reach. Some would even argue that we stand at the dawn of a new nuclear age. Britain, for example, is fast-tracking the construction of 10 new nuclear power plants to take the place of coal-fired plants. The investment also protects the nation’s energy independence as reserves of natural gas in the North Sea continue to dwindle.

And throughout the EU nations that long asserted they would never build new nuclear power facilities are changing course. Sweden recently junked plans to end nuclear power generation by 2010, passing legislation that allows for existing reactors to be replaced. Italy has also mothballed plans to phase out nuclear power and announced that nuclear power will generate 25 percent of its electricity by 2030.

Further east, China’s carbon reduction strategy depends heavily on an aggressive build-out of new nuclear power plants. Although China currently generates only 2 percent of its electricity from 11 nuclear reactors, the government plans to construct the equivalent of 100 new reactors by 2030. And as one of the first customers to purchase Westinghouse’s third-generation AP1000 reactor, the Middle Kingdom is on the cutting edge of nuclear technology. Construction is already underway on the first four of these reactors and firm plans exist for three more.

All in all, it appears that nuclear power has a glowing future.