Leading Article: Today we save energy, tomorrow we save the world

In a temple in Kyoto is the original wooden statue of the three monkeys who can hear no evil, see no evil and speak no evil: precisely the attitude of the vast majority of the world's population to the effect of their lifestyles on the earth's climate. Next week, world environment ministers gather in Kyoto to face one of the central political dilemmas of our time. How can political leaders secure consent for policies needed to sustain anything like the present numbers of people on this crowded planet?

Today, we report the latest evidence of the likely effect of human-made climate change on sea levels. The disappearance under the waves of several small island states in the Pacific is only one of the most dramatic consequences of societies' use of energy from burning coal, oil, gas and wood.

Politicians are, on the whole, slightly ahead of public opinion in understanding the science of climate change. One of Margaret Thatcher's least-remarked claims to a place in history is that she was the first national leader to take global warming seriously. She thus made the first Earth Summit in Rio de Janeiro possible five years ago. In this, at least, Tony Blair can be proud to have followed in his mistress's footsteps, suddenly converting to the glamourless cause of cutting carbon dioxide emissions at this summer's follow-up summit in New York.

These grand gatherings were important in getting all the nations of the world to agree that Something Must Be Done. Now the hard part. The governments of the world have pledged themselves to sign a legally binding agreement at Kyoto, but the trouble is that they still cannot agree on what they should be legally bound to do.

Whatever is agreed next week will be too little, too late. Global warming is already happening, and more is already "in the system", in that the extra carbon dioxide is already in the atmosphere and will go on trapping the sun's warmth. And the biggest contribution to global warming will probably come from fuels which have yet to be burnt - but which inevitably will be - by the world's growing and increasingly industrialised population. We are already halfway to hell in a handcart, and the ride is going to get much bumpier before the cart's headlong rush can be slowed down much.

President Clinton's willingness, then, to return the US's annual emissions of greenhouse gases to their 1990 level by 2010 is both hugely ambitious and not enough. Unless the US, the greediest gas-guzzler, shows willing, no deal can be expected to stick. But how on earth will the expanding American economy, built on cheap oil, burn less fuel in 12 years' time?

Welcome, too, is the British Deputy Prime Minister's green diplomacy of the past few weeks as he has travelled the world chivvying and preaching the bad news message. Not only that, but John Prescott has said that Britain will go it alone with more stringent targets than those agreed at Kyoto as an example to the world. That is fighting talk. But still the question is: How will energy use be cut? The energy-hungry juggernaut that is modern capitalism is not going to be stopped by a bunch of politicians signing a piece of paper in a Japanese city.

The main answer is green taxes. The only non-coercive way to reduce demand for energy is to raise its price. The trouble is that this is hardly popular politics. The German social democrats once thought they had found the post-capitalist holy grail with the slogan "Tax Pollution, Not Jobs", a plan to cut tax on something we have too little of, namely employment, and shift the burden to something we have too much of, namely pollution. But voters only saw the tax-raising, not the tax-cutting, side of the equation.

In Britain, we have moved sideways in the right direction. The Conservatives instituted by stealth a policy of annual tax rises on petrol of 5 per cent more than inflation. The "tough choice" for Labour is to reverse its opportunistic opposition to VAT on domestic gas and electricity. We need to raise taxes on gas and, above all, electricity generated from fossil fuels, while protecting the poor. The economic and ecological arguments are overwhelming: here is a tax base that is buoyant and non-distorting. But the political argument can only be won by bold income-tax cuts biased towards the bottom end of the scale.

A big shift in the tax burden needs to be backed up by regulation, setting tougher minimum energy standards for electrical appliances and for home insulation. And by research into solar, tide and wind energy. Then Mr Prescott and Mr Blair could really hold Britain up as an example of how energy use could be cut without economic damage. That would be the best way to persuade the peoples of the world to open their eyes and ears to the dangers, and to open up a dialogue about what can be done.