Tim Yeo: Remember Neville Chamberlain. And don't forget Kyoto

Tony Blair and Angela Merkel put a brave face on the G8 summit, but the truth is that the world is more likely to experience dangerous climate change than it was a week ago. Even rose-tinted spectacles cannot conceal the fact that the outcome falls woefully short of what is needed. Far from being a breakthrough, President George Bush's belated acceptance that the United States must be involved in discussions about the post-Kyoto framework was the least he could do. The American Congress, much of the business community, and many US states are now far ahead of the President in recognising the urgency of the climate change threat and the commercial opportunities that its solutions offer.

Although Bush's plan for US-sponsored meetings to advance the agenda for 2012 and beyond has been junked, the G8's failure to agree targets for a maximum rise in temperature and a halving of carbon emissions by 2050 (let alone the action needed to reach them), represents a failure of leadership. It is the world's poorest citizens who will pay dearly for this.

Merkel's intentions were good, but that is what the road to hell, or to a frazzled planet, is paved with. Since Bush will soon be history, it might have been better if the other G8 countries had made commitments that recognised how much the science has moved on in the two years since Gleneagles. This would have exposed his isolation and intensified the domestic pressure on him. The G8 leaders apparently saw Bush's long-overdue concession as a triumph, but instead of patting themselves on the back they should have ridiculed his morally bankrupt and commercially unwise insistence that America won't act until countries like China do.

When you're the richest person around and someone comes to you raising money for a good cause, it isn't either smart or ethical to refuse to give unless poorer people give first. It wouldn't have been smart for Britain to argue that in 1938 the costs involved should stop us rearming in response to Hitler unless other countries agreed to share the burden of doing so first. As it happens, China is already acting. Its regulations relating to motor vehicles are in some respects now more demanding than America's. It means that some vehicles which are legally permitted in America are too dirty for China.

It's unlikely that in 19 months the next US President will be as intransigent as the present one. If he or she turns out to be, then with any luck Britain's new Prime Minister, Gordon Brown, won't be as afraid as Tony Blair seems to have been to speak up. But, either way, the uncomfortable truth is that G8 countries have per capita carbon emissions vastly greater than those of China and India. American per capita emissions are a hundred times greater than those of some African countries. Against this background, it's up to the West to give the world a lead.

Of course, action by the G8 countries alone won't avert climate change. But it's almost certainly a prerequisite for getting other countries to join in the solution. Engaging China, with its rapidly expanding economy and determination to use its coal, is essential. The best way to do this would have been for the G8 to have accepted that contraction and convergence, the process through which per capita emissions in all countries around the world converge on a level consistent with climate stability, is the right long-term goal. It should have mandated the negotiators of the replacement for the Kyoto Treaty to keep this in mind.

Accepting that climate change needs a global solution, and that the fairest basis for that solution involves sharing the burden between the world's nations, would ensure all countries approach the negotiations in a positive spirit. But delaying the actions needed to tackle climate change is bad economics as well as bad politics. The International Energy Agency published a report last month projecting how much carbon emissions will rise on present trends over the next few decades. It emphasises the unreality of an important international gathering whose conclusion is that merely acknowledging there is a problem is a reason for self-congratulation. It's as though someone driving at 50mph suddenly sees a concrete wall ahead and congratulates themselves on recognising that this is not the moment to accelerate to 70.

Even stabilising emissions at present levels won't prevent climate change affecting the world this century. The unprecedented level of international migration this could produce would almost certainly cause serious international conflict. The reality will soon be clear even to the modern equivalent of the flat earthers. Climate change is happening. The action required to avert it will have to be more dramatic than anything yet seen. And as the economist Nick Stern pointed out, the longer that action is delayed the more expensive and disruptive of lifestyles it will be.

Part of the solution will be global emissions trading. Here Europe has an advantage because it has the first international system up and running, albeit not very effectively. It would have been helpful if the G8 had explicitly recognised that a cap and trade system covering emissions from sectors such as power generation, heavy industry, shipping and aviation is needed.

It's also clear that, as the success of the Toyota Prius and other products show, first-mover advantage in the commercial sector is considerable. Countries that incentivise (through the tax system and in other ways) investment in low-carbon technology will reap a big economic advantage. If the health of the planet is not a sufficient spur for the self-interested, there is also a more naked economic one. The components that make homes and other buildings carbon neutral will enjoy widespread demand. The technology that captures carbon from a coal-fired electricity generating station and stores it safely will have a worldwide application.

China, whose economy will soon be the largest in the world, sees this more clearly than many in the West. If the world's biggest economy turns out to be the one leading the way on products that address climate change, the rest of us will be at a disadvantage. Time is not on our side. The build-up of greenhouse gas concentration in the atmosphere, the direct trigger for climate change, will continue even if emissions are cut significantly at once.

The epitaph on the 2007 G8 summit may say that on climate change they agreed cutting carbon emissions was necessary. This generation of world leaders may soon be seen as modern- equivalents to Neville Chamberlain. They can redeem themselves by bringing to the talks this year about the post-Kyoto framework an urgency and determination to show leadership hitherto absent. If they don't succeed, we will all suffer.

Tim Yeo, Conservative MP for South Suffolk, is chairman of the all-party Environmental Audit Committee

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