An innocent observer could be forgiven for thinking that the United Nations climate talks, now hotting up in the Qatar capital of Doha, would be the focus of the international fight to combat global warming. But the innocent observer would be wrong. There is indeed a battle going on, one that will determine the planet's future, but it is not between the negotiators finding new ways to disagree over the implementation of decisions they have already made.

The battle is being waged in energy and finance ministries around the world, and in the boardrooms of energy companies and their bankers. It is the battle between a high-carbon and a low-carbon energy future. And the outcome is unclear.

On the one hand, global investment in renewable technologies, particularly wind and solar, has been racing ahead: for the past three years it has exceeded investment in generation from fossil fuels. Last year, fully 70% of all European power investment was in renewables.

Leading Europe's drive towards decarbonisation is Germany, whose national "energy transition" will reduce emissions by 40% by 2020 and by 80% by 2050 without use of nuclear power – using renewables and energy efficiency alone. Meanwhile, China has become the world's largest producer of both wind and solar power. In California, South Korea and Australia new emissions-trading schemes have recently put a price on carbon.

Yet at the same time the world is also going in the opposite direction. More coal – the dirtiest fossil fuel – was used to produce electricity last year than for 40 years. As the International Energy Agency warned this month, this is driving up global carbon emissions, which rose by an alarming 3% in 2011. Coal burning now represents almost a third of all power generation; it is rising even in Europe, as the economic slump slashes the carbon price. And there is more to come: the World Resources Institute reports that globally no fewer than 1,200 new coal plants are currently proposed, two-thirds of them in India and China. Meanwhile, Canada leads the countries exploiting highly carbon-polluting tar sands, and the oil majors eye up the Arctic for new oil.

The environmental movement has tried hard to explain climate change in terms of emission trends, targets and international treaties. But as the British thinktank Carbon Tracker has pointed out, it's really just simple maths. If the world is to limit global warming to 2C, it must keep greenhouse gases in the atmosphere to under 450 parts per million. We are currently at 392, and rising fast. To have a good (80%) chance of staying within the 2C limit, that means the world can emit only another 565 gigatonnes of carbon dioxide. But global fossil fuel reserves are much bigger than that, equivalent to 2,795 gigatonnes, or five times the safe amount.

In other words, we can only avoid devastating climate change if we keep most of the world's fossil fuels, including almost all of its coal, in the ground.

Is that possible? Can we deliberately forgo using our most precious resource – the fuels that have powered 200 years of industrialisation – for the sake of future generations?

It is absolutely possible. The stone age did not end because we ran out of stone. We know how to produce energy without carbon emissions – through renewables, geothermal and nuclear power and much greater energy efficiency. The variable supply of renewables needs to be overcome through interconnected smart grids that ensure that electricity can flow from wherever it is being generated to wherever it is needed, with demand adjusted to supply. Gas (the least emitting fossil fuel) can provide baseload capacity, as long as it is located where carbon capture and storage technology can in due course be applied.

Creating a decarbonised energy system of this kind will not be cheap. But there is no energy future that is cheap. Over the past few years the US has experienced a glut of shale gas that has reduced its price dramatically – and by displacing coal, cut US emissions. But in Europe it is unlikely that shale gas can be extracted cheaply; fierce competition as global demand rises will force its price up. As the Confederation of British Industry warned when George Osborne suggested that the UK should embark on a new "dash for gas", a fossil-dependent future would leave the economy highly vulnerable to volatile energy prices. The huge advantage of renewables is that, once built, they provide free energy not subject to geopolitical insecurities.

So the war that has been raging within the British cabinet over energy policy in recent weeks is not just some local political spat. It is an expression of a much larger global battle. The EU must choose whether to bolster its carbon price and commit to a 2030 renewables target, or see its green technology industries beaten in global markets. President Barack Obama can fulfil the promises he made on entering office to set America on a clean energy course, or give in to the powerful fossil fuel lobbies. Most of all, China – now the world's biggest carbon emitter – must decide whether to shift towards gas or to maintain its dependence on imported coal.

There are business forces lined up on both sides of this global battle. Counterposed to the fossil fuel industries are the environmental sectors that benefit from climate policy – now a $4tn industry that is sustaining a large number of jobs and growth. The CBI has come out in favour of a 2030 decarbonisation target, and this is a sure sign of shifting economic power.

For the UN negotiators in Qatar, this year's talks are just the skirmishes before the key date of 2015, when a new global agreement must be achieved. Between now and then we will know if the world's governments are committing to a low carbon future of tolerable safety, or condemning us to a high-carbon one, and to the catastrophic climate change it will bring.