Blair and Schwarzenegger enter climate change pact.

Tony Blair has made a pact with Californian governor Arnold Schwarzenegger that commits Britain to work with the US state to reduce greenhouse gases and develop energy efficient technologies.

The agreement between the prime minister and the governor follows a climate change meeting between the two men and leading businessmen in Long Beach yesterday as part of Mr Blair's tour of the US. Much more...The statement endorsed by both Mr Blair and Mr Schwarzenegger binds the UK and California to "urgent action to reduce greenhouse gas emissions and promote low carbon technologies".

"California and the UK recognise the links between climate change, energy security, human health and robust economic growth," the statement said.

"Working together, California and the UK commit to build upon current efforts, share experiences, find new solutions and work to educate the public on the need for aggressive action to address climate change and promote energy diversity."

A spokesman for Mr Blair said that both parties would consider whether they could co-operate on an emissions trading scheme, such as that recently adopted by the EU. He added that officials would even look at whether California could be included in the EU's own programme, under which companies trade the right to emit carbon dioxide using a permit system.

Commenting on the need to tackle global climate change, Mr Blair told business leaders, including BP chief Lord Browne and Virgin boss Richard Branson, that "the answers to this will come in the end by the development of the right science and technology".

"This is something that can't be done just by governments doing it," the prime minister added.

"We need a joint framework, we need it to incorporate all the main countries in the world and we need not just your commitment but also your expertise," he said

Mr Schwarzenegger, whose strong environmental agenda as Californian governor contrasts with that of US president George Bush, who refuses to sign the international Kyoto protocol on global warming, criticised the lack of leadership shown by the White House in tackling climate change.

"We see that there is not great leadership from the federal government when it comes to protecting the environment, so this is why we as a state move forward with it, because we want to show leadership," said Mr Schwarzenegger.

California has a population of 37 million, with a GDP comparable to leading world economies such as Italy and China.
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WASHINGTON -- Britain and California are preparing to sidestep the Bush administration and fight global warming together by creating a joint market for greenhouse gases.

British Prime Minister Tony Blair and California Gov. Arnold Schwarzenegger plan to lay the groundwork for a new trans-Atlantic market in carbon dioxide emissions, The Associated Press has learned. Such a move could help California cut carbon dioxide and other heat-trapping gases scientists blame for warming the planet. President Bush has rejected the idea of ordering such cuts.

Blair and Schwarzenegger were expected to announce their collaboration Monday afternoon in Los Angeles, according to documents provided by British government officials on condition of anonymity because the announcement was forthcoming.

The aim is to fix a price on carbon pollution, an unwanted byproduct of burning fossil fuels like coal, oil and gasoline. The idea is to set overall caps for carbon and reward businesses that find a profitable way to minimize their carbon emissions, thereby encouraging new, greener technologies.

Monday's meeting was being hosted by Steve Howard, CEO of The Climate Group, and Lord John Browne, chairman of British Petroleum. British and American business leaders planned to use it to also discuss other ways of accelerating use of low-carbon technologies.

In California, government officials disputed that the agreement was an attempt to sidestep the White House. In a conference call with reporters, state Environmental Protection Agency Secretary Linda Adams said the agency is in "constant contact" with federal regulators, but added that there was no discussion with Washington about Monday's agreement, which involves only voluntary actions.

"This is an agreement to share ideas and information. It is not a treaty," said Adam Mendelsohn, Schwarzenegger's communications director. "Right now, all we are doing is talking about sharing ideas."

The world's only mandatory carbon trading program is in Europe. Created in conjunction with the Kyoto Protocol, a 1997 international treaty that took effect last year, it caps the amount of carbon dioxide that can be emitted from power plants and factories in more than two dozen countries.

Companies can trade rights to pollute directly with each other or through exchanges located around Europe as long as the cap is met. Canada, one of more than 160 nations that signed Kyoto, plans a similar program.

Although the United States is one of the few industrialized nations that haven't signed the treaty, some Eastern states are developing a regional cap-and-trade program. And some U.S. companies have voluntarily agreed to cap their carbon pollution as part of a new Chicago-based market.

A main target of the agreement between Britain and California is the carbon from cars, trucks and other modes of transportation. Transportation accounts for an estimated 41 percent of California's greenhouse gas emissions and 28 percent of Britain's.

Schwarzenegger has called on California to cut its greenhouse gas emissions to 2000 levels by 2010. California was the 12th largest source of greenhouse gases in the world last year, bigger than most nations.

Blair has called on Britain to reduce carbon emissions to 60 percent of its 1990 levels by 2050. Britain also has been looking at imposing individual limits on carbon pollution. People who accumulate unused carbon allowances - for example, by driving less, or switching to less-polluting vehicles - could sell them to people who exceed their allowances - for example by driving more.

Bush has resisted Blair's efforts to make carbon reduction a top international priority. After taking office, Bush reversed a 2000 campaign pledge to regulate carbon dioxide emissions, then withdrew U.S. support from the Kyoto treaty requiring industrialized nations to cut their greenhouse gases to below 1990 levels.

The United States is responsible for a quarter of the world's global warming pollution. Bush administration officials argue that requiring cuts in greenhouse gases would cost the U.S. economy 5 million jobs. Instead, the administration has poured billions of dollars into research aimed at slowing the growth of most greenhouse gases while advocating a global cut on one of them, methane.

Craig Noble of the Natural Resources Defense Council, an environmental group, said the pact had symbolic value but "the time for talk is over." He urged passage of a proposal, pending in the state legislature, that would make California the first state in the nation to cap greenhouse gas emissions from industrial sources.

"The bottom line is, voluntary is not enough," Noble said
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Messrs. Blair and Schwarzenegger are scheduled to exchange views with the CEOs in a round-table discussion today in Long Beach, Calif., on how to work together to accelerate the deployment of clean-energy technologies. The CEOs include Lord John Browne of BP PLC, London, whose facilities in Long Beach are being used to host the event, as well as Charles Holliday of DuPont Co., Jim Rogers of Duke Energy Corp. and Richard Branson of Virgin Group Ltd. CEOs from Edison International, Goldman Sachs Group Inc., Swiss Reinsurance Co. and Timberland Co. also are scheduled to attend.

The event was organized by Climate Group, a nonprofit organization based in London. Most of the companies being represented, including BP and DuPont, have announced climate-change initiatives that include a commitment to reduce carbon emissions believed to cause global warming.

"This meeting just shows that climate change has moved to the top of the corporate agenda and the political agenda," said Steve Howard, CEO of Climate Group.

But President Bush's top environmental adviser, James Connaughton, won't attend, because of a scheduling conflict, said White House spokeswoman Kristen Hellmer.

Critics say Mr. Connaughton's absence follows an "obstructionist stance" by the White House on efforts to rein in emissions that many scientists say lead to global warming. The Bush administration pulled out of the 1997 Kyoto Protocol, an agreement signed by Britain and most other developed countries to cut greenhouse-gas emissions 5% below 1990 levels by 2012.

Administration officials and their supporters have argued that the Kyoto accord would have hurt the U.S. economically, in part because developing countries weren't part of the agreement, so would have enjoyed a cost advantage. Some policy analysts also question how dire global warming is, as well as the role of humans in causing it. President Bush has instead pushed a strategy of seeking voluntary cutbacks, more research on climate and a push for new energy sources, such as hydrogen.

For Mr. Blair, climate change has been a top priority. When Mr. Blair was chairman of the Group of Eight summit in Gleneagles, Scotland, last year, for example, he put the issue at the top of the agenda.

But Mr. Blair also is finding that cutting emissions isn't always easy. While he said the United Kingdom is on track to meet its Kyoto targets, he indicated earlier this year "we have work to do" to meet Britain's own goal of a 20% cut in emissions by 2010.

In California, Gov. Schwarzenegger is likely to face resistance from auto makers and other business interests to his goal to reduce the state's emissions 25% by 2020. The Republican governor has run into political hurdles. The Democrat-controlled legislature killed a measure in 2004 to put solar panels on a million homes, though the California Public Utilities Commission went on to approve the program on its own.