James Cameron: The green revolution has started

In the past few days there have been some momentous stories about climate change, not only from scientists but also from business people and politicians. The Tyndall Centre for Climate Change Research called for a 90 per cent reduction in greenhouse gases by 2050. Richard Branson said he'll invest billions in green fuels. Eddie Stobart started taking lorries off the road and transporting freight to Scotland on his company's own trains. And my company - if I may blow our trumpet - announced that it had raised a near-billion-dollar carbon fund, dedicated to investment in clean energy and reducing greenhouse gas emissions.

In the interests of balance, we have allowed a handful of naysayers to have a disproportionate voice in the debate, but the green revolution has started. Politicians now boast about their green cred, unthinkable only two years ago. Businesses, and their investors, have understood that the argument is over. Climate change is happening.

There is no need for businesses or individuals to despair if we take urgent action. The problem is not insurmountable. The costs of the necessary radical action are perfectly bearable. As Adair Turner (now Lord), the economist and former head of the CBI, says, we know that a 60 per cent reduction in carbon emissions by 2050, which is our policy commitment, will not cost the economy any meaningful loss. In fact, it is estimated that at most, it would equate to a minimum difference in GDP growth in the UK, meaning that what would have obtained by January of that year would be obtained by April or May.

Business is willing, as we saw last week. But it needs the help of politicians and governments. We need them to be courageous, to intervene to create a real, long-term value for carbon emission reductions. We have not got time to wait. To date, no single government, and I include Tony Blair's in this, has taken sufficient measures to address the issue. Despite impressive rhetoric - and good rhetoric does count, for example, Margaret Beckett's speech at the UN - there is still not enough action.

First, our government must use its power to negotiate the right global frameworks. It has to be global because this is a global problem. Mr Blair, and whoever follows him, must commit wholeheartedly and without reservation to extending our commitment internationally, both within the EU and beyond.

It can be an exasperating business. I know. I negotiated the Rio Agreement in 1992 and the Kyoto Protocol in 1997 on behalf of small island states around the world, those so obviously at risk from a rise in sea levels. There are some who criticise the Kyoto Protocol, saying it will achieve nothing. Certainly it can be improved, but it is the best we have got and is certainly better than nothing. Kyoto was set up to combat global climate change by reducing greenhouse gas emissions, and included a Clean Development Mechanism, which created a value for carbon. If you create a scarcity, and you do that by setting demanding targets, then companies and governments will have to cut their emissions or buy reductions achieved by someone else.

The longer we wait to reduce carbon emissions, the more expensive and difficult it becomes. There are businesses, including mine, that deal with these problems daily, in a constructive and positive manner. They invest in projects around the world that reduce carbon emissions, and it does not matter where that carbon is taken out of the atmosphere; a tonne of carbon is a tonne of carbon. Entrepreneurs everywhere could do the same, and many are starting to understand the importance of this market. What is most interesting about Richard Branson's decision to invest the profits from his travel companies in climate change is that other entrepreneurs will be intrigued by the opportunity as much as the call to action. This is not philanthropy. This is business with a purpose.

But it needs government to set aggressive targets. It must deny the demands of the business lobbyists, who argue about the impact on competitiveness. For too long, politicians have been credulous in the face of big-money lobbying. They must help find the economic rationale to act.

We need to invest in the technologies that already exist, such as wind power, solar energy, bio-fuels, greenhouse gas destruction methods, energy efficiency and carbon capture and storage. We can all do our bit in our own lives and it need not involve putting on a hair shirt. But show me how life gets worse if we have more energy-efficient houses and don't have fresh strawberries flown in from California.

The scale of the problem makes it imperative that governments protect the public interest, and not just in a narrow, political sense. Governments can play their part, even as consumers. The US government is the largest energy consumer in the world. Its decisions, for instance, on how it constructs and powers its buildings and its transport would have a huge influence on consumption. The same would happen here. Imagine if the state were to invest in solar panels for its buildings. Just the scale of production would bring down the price and make it more affordable for the rest of us. On a broader scale, there is no reason why groups of countries should not form a co-operative agreement, based on utilising a single technology such as clean coal.

Business needs government to set up the structures within which it can work. Today, there is substantial investment moving into the carbon emission reduction market; it is not only a necessity, but an economic opportunity. It is time for governments to seize this opportunity and enforce stricter allocations. We need to increase our efforts to align the creation of wealth with the protection of the life-support systems of the planet. We don't have much time. We are finding the will, and it can be done.

James Cameron is vice-chairman of Climate Change Capital, an investment banking group specialising in the low-carbon economy