Ministers rush out green initiatives ahead of Stern report

Ministers rushed out announcements of new initiatives to combat climate change yesterday, ahead of Monday's publication of a report that is expected to have a worldwide impact on the way business leaders think about the future of the planet.

The Treasury report on the economic impact of global warming, by Sir Nicholas Stern, will warn that doing nothing about climate change could be up to 20 times more expensive than taking remedial action, when the economic costs of droughts, floods, hurricanes and human migration are taken into account. Its publication, with the personal backing of Tony Blair and Gordon Brown, is expected to put the UK at the head of the international campaign to avert climate change.

Yesterday, a British minister announced a plan to allow US companies to take part in exchange agreements on cutting carbon emissions, circumventing the US government, which has argued that taking action on the environment will be bad for business.

The plan, announced in Beijing by the Climate Change minister, Ian Pearson, will allow companies from countries outside the Kyoto Agreement on climate change to join the UK's carbon trading scheme, which rewards firms that take action to protect the environment and penalises polluters.

"Under current rules, companies in places like California - the sixth largest economy in the world - don't have a way to participate in the global emissions market. The UK is filling that gap," Mr Pearson said.

And the Environment Secretary, David Miliband, was in Doncaster yesterday launching a government scheme to encourage community groups to help people take action on climate change. Mr Miliband was flanked by his brother, Ed, a Cabinet Office minister.

On Monday, ministers will be under pressure to legislate so that advertisements for new cars would have to carry a prominent notice like the health warning on cigarette packets. A potential buyer would be able to see at a glance whether the car is likely to harm the environment.

Colin Challen, a Labour MP and leading campaigner against climate change, wants a quarter of all promotional material for new cars to be taken up by information on how much fuel the car consumes, and how much carbon it emits.

The biggest cause of global warming is the increase in the amount of carbon in the atmosphere, and road transport is one of the biggest sources. But a report this week showed that three quarters of the major car manufacturers in Europe have failed to keep their side of a voluntary agreement to reduce the amount of carbon emitted by new models.

A new European league table shows that two manufacturers - Fiat and Citroen - have beaten the targets set as part of an EU-wide campaign to cut carbon emissions but all the others are behind, including Toyota, maker of the much praised environmentally-friendly Prius hybrid.

At the bottom of the table is the Japanese manufacturer Nissan, which blamed its poor showing partly on the changing preferences of its customers, who have pushed up sales of gas-guzzling 4x4s.

Volkswagen, Europe's biggest car brand in terms of sales, has improved fuel efficiency by less than half the required rate, whereas its main competitor, Renault, is bang on target, according to a report published yesterday by T&E, the European Federation for Transport and Environment.

The targets come from a promise which the European Automobile Manufacturers Association made in 1998, that its members would reduce the average carbon dioxide emissions in new cars to 140 grams per kilometre by 2008, a reduction of 25 per cent below 1995 levels. Japanese and Korean manufacturers agreed to make similar reductions by 2009.

Mr Challen, who chairs the All-Party Parliamentary Climate Change Group, will present a Bill amending the 2001 Passenger Car Regulations so that information that now has to be included in the small print of detailed promotional literature will instead have to be written in large type on all media outlets promoting new cars. The Bill will need government backing if it is to have a chance of becoming law.

Mr Challen said: "More and more consumers want to do their bit to combat climate change and so we need to enlarge the small print to be able to see precisely how our new car purchase impacts on the environment."