After three years of diplomatic fatigue, the United States put delegates from 170 countries out of their misery at the latest round of climate talks at The Hague in November by scuttling the negotiations and, in the process, thumbing its nose at nature as well as at the rest of the world. The good news is that the collapse of the global warming talks may set the stage for a truly transformative initiative to pacify the inflamed climate and, at the same time, dramatically expand the global economy.

The world’s glaciers are melting, the oceans are heating up, tropical diseases are migrating north and the weather is becoming increasingly destructive. All that is the result of a l-degree increase in temperature over the past century. By contrast, the world will warm by up to 11 degrees this century, according to the United Nations’ Intergovernmental Panel on Climate Change.

The United States killed the Hague negotiations by insisting on meeting its Kyoto goal (reductions of greenhouse gas emissions, primarily coal and oil, to 7 percent below 1990 levels) simply by planting trees and buying cheap emissions credits from poor countries. But the escalating pace of climate change makes it clear that a reliance on carbon-trading and tree-planting is nothing more than an expression of institutional denial of the magnitude of the problem. The EU, frustrated by US foot-dragging, refused to cave, demanding that Washington meet at least half its obligation through real domestic reductions in oil and coal burning. The result was a diplomatic meltdown.

Abandoning the minimalist goals of the Kyoto Protocol, many European nations are now taking their cues from science: The climate crisis requires 70 percent cuts in a very short time if civilization is to avoid the catastrophic effects of global warming. Britain, which in November suffered its worst flooding in centuries, will cut emissions 60 percent in the next fifty years. Holland, faced with a devastating sea-level rise, will cut emissions 80 percent over the next forty years. Germany is contemplating 50 percent cuts.

The US obstructionism also ignores a recent sea change in attitudes among Congressional Republicans, corporate leaders and multinational oil companies. Three years ago, Nebraska’s Senator Chuck Hagel co-sponsored a resolution not to ratify the Kyoto Protocol. Today Hagel concedes the science of global warming. Last year, Indiana’s Richard Lugar and James Woolsey, former head of the CIA, called for the United States to begin reducing coal and oil use by substituting energy from agricultural wastes.

Oil companies, with the exception of ExxonMobil, are similarly moving to confront the crisis. Shell has created a new, $500 million core company for renewable energy. Its director was recently appointed to head a new G-8 task force on clean energy. Texaco is putting serious resources into renewables. British Petroleum, with major solar investments, now advertises that BP stands for “Beyond Petroleum.” In the auto industry, William Clay Ford recently declared an end to “the 100-year reign of the internal combustion engine.” That declaration follows Ford’s participation in a $1 billion joint venture with Daimler-Chrysler and Mazda to bring fuel-cell-powered cars to market in three years. (These initiatives are partly “greenwashing,” aimed at pacifying environmentalists, but they also reflect preparations by oil and auto companies to maintain their role as prominent players in a new energy economy.) Most striking, at the World Economic Forum in Davos at the end of January, the CEOs of the 1,000 largest corporations voted climate change the most urgent issue facing humanity today.

What growing numbers of corporate leaders understand is that a global transition to clean energy would create millions of jobs, especially in poor countries. It would transform dependent, impoverished countries into robust trade partners, substantially expanding global markets. It would make the renewable industry a central engine of economic growth.

Ironically, the corporate powers behind the Bush administration may prove more alert to the wealth-creation potential of an energy transition than Gore. While Christie Whitman, expected to be the new EPA administrator, didn’t know the difference between ozone depletion and global warming (and questioned the science behind both), Paul O’Neill, the new Treasury Secretary, has expressed serious concerns about the climate–and even, at one point, pushed for a carbon tax on oil to reduce emissions.

In May, when the parties to the climate talks reconvene, they should consider three interactive strategies:

§ Subsidy switches. The United States currently spends around $20 billion a year in direct subsidies of fossil fuels. If that money were put into renewable technologies (as well as into retraining displaced coal miners) it would provide incentives for the big oil companies to aggressively develop and market fuel cells, wind farms and solar systems.

§ A progressive fossil fuel efficiency standard. The parties should scrap international “emissions trading” and instead adopt a standard under which every country would begin at its current baseline to improve its fossil fuel efficiency by a specified amount every year until the 70 percent reduction is attained. By drawing progressively more of their energy from noncarbon sources, countries would create mass markets that would make these sources as cheap as coal and oil.

§ Creation of a large technology-transfer fund. The nations of the world should consider a tax on international currency transactions to fund the transfer of clean energy to developing countries. A tax of a quarter-penny per dollar on those transactions–which total $1.5 trillion per day–would help stabilize capital flows as well as net about $300 billion a year for wind farms in India, fuel-cell factories in South Africa and solar assemblies in El Salvador.

These measures would be far easier to negotiate, monitor and enforce. More important, they would represent a scale of response appropriate to the magnitude of the climate crisis that threatens the continuity of our organized civilization.