Leading article: The heat is on, but where is the global leadership?

It is now official. The Met Office confirmed yesterday that last month was the hottest July since records began. And the scientific community is convinced there is only one explanation for these unusually high temperatures: the mankind-induced heating of Earth's climate. It appears that even those of us who live in temperate regions, such as Britain, are beginning to feel the effects of global warming.

Yet while the rest of us swelter, the response from our leaders remains complacent. Our Prime Minister, on a trip to the west coast of America, joined with the unlikely figure of Arnold Schwarzenegger, the Governor of California, yesterday to announce a transatlantic market in carbon-dioxide emissions. The scheme, which will reward businesses that find a profitable way to minimise their emissions, has its merits. It is only right that those who pollute more should pay more. This also creates crucial financial incentive for cutting emissions that must be welcomed.

Of course, Arnold Schwarzenegger hardly has a spotless environmental record, as his fleet of petrol-guzzling "hummers" attests. But in fairness to the Republican mayor, he has been more progressive than his President in recognising need for action on climate change. So too have many of America's mayors. In recent years, 224 of them, representing almost 44 million Americans, have signed up to emissions restrictions. Yet without national, mandatory emissions reduction targets, such schemes will always be peripheral. And it is here that Mr Blair has failed to provide global leadership on this issue. He has failed to pressure President Bush to sign up to Kyoto, or any successor treaty. And in the past year Mr Blair has admitted he has "changed his thinking" on the need for such targets. He is now, apparently, seeking a technological solution. On this question, as in so much else, Mr Blair seems unable to take a line that may prove disagreeable to the White House.

The Prime Minister is strangely selective about what technological solutions he will countenance. His government has shown scant interest in renewable energy. The retailer Currys today becomes the first high-street chain to sell solar panels. But government grants for such projects are in confusion after the scrapping of the "Clear Skies" programme. For a while it was unclear if grants would continue at all. Its eventual replacement, the Low Carbon Buildings Programme, has been poorly publicised. This reflects a more profound Government malaise on energy microgeneration. We are lagging behind the rest of Europe. Berlin is offering grants and tax incentives for home-energy improvements worth more than €1.3bn a year. Our own low-carbon buildings programme runs at just £10m a year. Despite Currys' move (which shows there is burgeoning consumer demand for such technology), a departure of solar panel installers and technicians overseas is a real prospect.

Instead, Mr Blair focuses on promoting nuclear power. Last month's Government energy review justified a new generation of nuclear power, partly on the grounds that it produces no carbon emissions. Yesterday, experts from the Committee on Radioactive Waste Management called for the urgent deep disposal of nuclear waste. This is, presumably, the sort of cue the Government is waiting for to push ahead with its nuclear plans.

But even if nuclear waste can be safely stored - something that is not certain - the new generation of power stations the Government plans to build will not begin feeding into the national grid until the end of the next decade - at the earliest. As this summer is making clear, climate change is a more urgent problem than that. Mr Blair may give the impression he is taking the problem seriously, but he is merely fiddling while the world burns.