Senior Fellow  Kevin A. Hassett

Imagine that after years of dating, you finally decide to ask your girlfriend the big question. You purchase a pricey engagement ring and find the perfect romantic spot. Down on one knee you ask her to marry you. She responds, "I will seriously consider it."

Would you celebrate?

Judging from their actions at the G-8 summit, a European would. President George W. Bush just agreed to "consider seriously" cutting greenhouse-gas emissions in half by 2050. A cynic might view this maneuver as one more diplomatic ploy by the U.S. to kick the can down the road and avoid a real commitment to do anything about global warming.

But the Europeans are celebrating. Indeed, the agreement is being hailed as an enormous victory for German Chancellor Angela Merkel, a physicist who has made progress on climate change her signature issue. The influential German magazine "Der Spiegel" ran stories with headlines, "Merkel crowned 'Miss World' after climate deal," and "Queen of the summit: Merkel revels in G-8 climate breakthrough."

Was the beer flowing perhaps a little too heavily in Heiligendamm, or has something virtually unprecedented occurred? Has a Group of Eight summit produced a useful agreement?

Something Big Happened

A careful reading of the 37-page summit declaration suggests that something of historic importance did occur. A dramatic shift in the international approach to climate change is hidden between the lines. Big risky pre-commitments are out. Collective baby steps are in.

Three features of the document stand out, and provide a fascinating hint about the likely future course of global warming policy.

First, the G-8 countries registered with startling specificity their concern about the gravity of the global warming problem, citing reports by the United Nations Intergovernmental Panel on Climate Change forecasting harmful changes in the atmosphere. This means future negotiations will begin with a unanimous agreement that the world faces a serious threat. This increases the pressure to act in a significant way, especially on the U.S.

India, China

Second, rather than committing to a specific target, the agreement cites a laundry list of recommended actions that, if taken together, may dramatically reduce greenhouse-gas emissions.

From energy efficiency to previously taboo nuclear power, the G-8 countries recognize that numerous complementary steps can help reduce emissions, even in the absence of specific goals. This suggests a refreshing realism regarding the proper approach to greenhouse-gas reduction. If you are serious about global warming, you need to rely more on nuclear power.

Finally, the agreement concedes that one of the U.S.'s main hang-ups is a legitimate gripe: Real progress on global warming can only be made if developing countries such as China and India participate in the effort.

If the major developed countries decide, for example, to eliminate the use of coal, this will lower the demand and price for the material and only increase its consumption in less- developed countries. Progress made in one part of the world will largely be offset across the ocean.

The G-8 concession suggests that developing countries will have little luck dividing the developed nations in future negotiation rounds.

Carbon Tax

So the richest nations have basically agreed that each country individually needs to demonstrate to the others that they take global warming seriously. This suggests a promising path for future climate change policy. The G-8 nations will independently fulfill this commitment by adopting policies that encourage conservation and the production of clean energy and by taking steps to reduce carbon emissions.

The U.S. might adopt a carbon tax and say to the world, "See, we said we would be serious, and our actions prove it." When it does, then our G-8 partners will be pressured to show they, too, are serious and also adopt such a tax.

After everyone has taken that step, perhaps with a tax that is much smaller than would ultimately be required to halve emissions, the G-8 will collectively look at the developing world and ask them to adopt carbon taxes as well.

If the developing world does that, then the carbon taxes in the developed world can be increased. If the developing world balks, then collective action from the G-8 may be necessary to force the developing world's hand.

Kyoto Accord

This is a promising approach. Rather than forcing countries, as the Kyoto Protocol did, to make an enormous and risky commitment up front, and then bickering endlessly about whose fault it is that progress is nonexistent, it commits countries to a gradual and friendly competition to reduce greenhouse-gas emissions.

Along the way, nations will learn from each other. Successful conservation measures and innovations can be shared to collectively reduce the economic harm that carbon-emission reduction could cause.

And the risks to individual countries are low. The U.S. can take a small step in the right direction, wait for other countries to catch up, and then take another small step.

Small steps may disappoint radical environmentalists, but they are better than no steps at all. The G-8 agreement sets the stage for real progress. Merkel deserves the title of Miss World.

Kevin A. Hassett is a senior fellow and director of economic policy studies at AEI.