Leading article: With a little bit of goodwill, we can still stop global warming

There are still 70 million households in China without electricity. That fact puts the Chinese economic miracle in some kind of context. The world's most populous nation may have pulled 250 million people out of poverty since the days of Chairman Mao, but it still has a long way to go. That's why China is insisting that the developed world should bear the brunt of cutting greenhouse gases and that - after the rich world has developed the technology to deal with the problem - it should pay for it to be transferred to poorer nations.

We have an incentive to do this. The economic growth of China and India is being powered by the world's dirtiest fuel, coal. China is building a new power station every 10 days - so the country that already produces seven times more carbon emissions than the UK will by 2010 will overtake the US as the world's biggest polluter.

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Dark greens claim that we are all doomed unless we cut our consumption - buying, using and travelling less in a way that is bound to hit the economy. The emerging economies are not going to do that. So it was good news yesterday to hear from the accountants PricewaterhouseCoopers that economic growth and a cut in emissions are not incompatible. A "green growth" strategy - increased energy efficiency, more renewable fuels and new carbon-capture technologies - could stabilise the atmosphere at acceptable levels. It would enable the rich world to cut its emission by half, allowing emerging nations to increase theirs by 30 per cent on current levels.

Green growth is not a dream. The UK has had it since 1997, in which time emissions have fallen by 7 per cent while the economy has grown by 25 per cent. Increases in landfill tax have cut the amount we dump by one-quarter in the same period. Our record is such that Arnold Schwarzenegger cited the UK as a model this week as he signed the law which committed California, the seventh largest economy in the world, to the Kyoto reduction targets. In doing so, he ushered in the prospect of a new global carbon-trading regime which would link California and others to the carbon trading system of the European Union.

That system is far from perfect. It covers only heavy industry, which is just 45 per cent of our economy. It has not been applied even-handedly, with the Germans and French dishing out more credits than they were allowed. But it is an important start in setting a framework which gives businesses the incentives, and confidence, to invest in clean tech knowing that in the longer term it will be cleaner. Green jobs have more than doubled here since 2001.

This is the kind of win-win situation which will make emerging nations sign up. They want to do so. Sixteen of the world's 20 most polluted cities are in China - claiming 300,000 lives a year. Pollution and ecological damage cost it between 7 and 20 per cent of GDP annually. Its soil and water systems are fragile: in 2004, drought and floods damaged more than 37 million hectares of arable crops, leaving more than four million of them barren. Climate change will likewise reduce India's water supply. Global warming will hit the poor world hard.

That's why China's latest Five-Year Plan announced an end to the old "grow first, clean up the mess later" approach. It wants 10 per cent off emissions, a 20 per cent cut in energy consumption and a 30 per cent drop in water use by 2011. It has even decreed that all Chinese cities must reinstate the bike lanes removed in recent years to make way for the car. With goodwill from all the world's leading nations, global warming can be stopped.