CLIMATE CHANGE: A casual observer of the issue of global warming and climate change could be forgiven a degree of pessimism.

Emissions of carbon are increasing. Global population numbers rise by almost 10,000 every hour and demand for energy worldwide is growing by about 2 per cent a year. For the foreseeable future that growth will be supplied by hydrocarbons and in particular by oil and gas. At some future date alternative and renewable forms of energy will become commercial propositions but that date is still a long time away and for the moment photovoltaics, hydrogen and the other non-hydrocarbon fuels are still at the experimental stage.

The Kyoto agreement is unratified and there is no immediate sign of a consensus on international action.

At the same time, the evidence of climate change mounts. The science is provisional but few can doubt the need for precautionary action now. Despite all this, public and political attention is focused elsewhere - on issues of national and international security.

It would be a mistake, though, to be pessimistic.

The debate on climate change over the past 10 years has stimulated much action from individual governments and from the corporate sector. While there is no obvious single solution there are many productive strands that together offer a real chance of averting the risks of global warming. Emissions can be reduced using innovation and new technology, through better management of plant and equipment and through the simple step of stopping leaks. In BP's US natural gas business, for instance, better technology succeeded in reducing methane leaks by 50,000 tonnes a year - the equivalent of 1 million tonnes of carbon dioxide.

The lesson in this is not that individual private companies can solve the problem - they cannot. But they do have an important role.People expect big companies to act and to use their skills and access to technology to provide answers and better choices - not to dismiss a real challenge as someone's else problem, or to wait until the science is certain, by which time the risks may have become all too real.

Companies have a direct commercial interest in taking action. Our purpose is to create shareholder value - and as long-term businesses, with investments designed to deliver returns over a period of decades, we should understand that the maximisation of value depends on ensuring a company's actions and behaviour are aligned with society's needs.

A reduction in emissions to below the 1990 level was seen at Kyoto as the necessary first step leading to stabilisation - to ensure that the concentration of greenhouse gases in the atmosphere stays below the level of risk.

It is becoming clear that stabilisation may be an achievable goal. Continued improvements in efficiency, coupled with steps to raise the productivity of energy and to reduce the carbon content of the fuels consumed, could together cap net emissions at current levels.

Co-operation between oil companies and the motor industry to combine new fuels, lubricants and engine technologies offers the prospect of a cut in emissions from internal combustion engines amounting to 400 million tonnes over the next decade.

A framework that put a value on emissions, crediting innovation to displace carbon and incentivising the trading of carbon credits, would allow the problem to be solved at the lowest possible cost.

Such a point has not yet been reached but the sheer diversity of the present response to the challenge of climate change should be a source for cautious optimism rather than despair.

China has recently launched a nationwide programme to protect its natural environment and has begun to substitute natural gas for coal. Britain has adopted a creative and valuable emissions trading system, while the US has focused on what it does best: the development of technology, based on world-leading science.

Given the will, climate change is a manageable problem. There need be no trade-off between growth and environmental security. The energy business can be reinvented and the risks to our common future can be averted.

- Lord Browne is chief executive of BP.