In releasing its position paper on climate change, China has spelled out two national imperatives that appear to conflict. The nation's leaders recognise the urgent need to combat climate change and reverse environmental degradation caused by rapid industrialisation. But they have also vowed not to let such efforts impede the economic growth necessary to pull hundreds of millions of people out of poverty. The government has little choice. Climate change is already causing crop failure, drought and floods on the mainland. These disasters have a high economic cost, and that cost is set to mount in coming years. Inaction is not an option. The conundrum is not unique. Other developing nations also face the challenge of balancing economic growth with environmental protection. Climate change recognises no national boundaries. Their problems are everyone's problems. China, however, plays a pivotal role because, by many measures, it has exceeded the United States as the world's top emitter of greenhouse gases. Understandably, the rich nations want the poor countries - especially China and India - to clean up, and are exerting increasing pressure on them to do so. The wealthy economies have moved into a post-industrial phase; their most advanced technologies are environment-friendly and their citizens, by and large, live in much greener and cleaner places. The rich nations say this is the future towards which emerging economies must move. The question is how - and who will pay for it? Beijing is proposing a solution with which other emerging economies would no doubt concur. It argues that rich countries should devote between 0.7 per cent and 1 per cent of their gross domestic product to helping poorer nations cut their greenhouse gas emissions. This would amount to more than US$300 billion a year from the Group of Seven countries alone. Most of the money would be spent on technology transfers. This would certainly help combat climate change, but the rich nations are unlikely to accept such a high price tag; many believe it is not their responsibility. Moreover, western investors, companies and governments jealously guard their proprietary technology and will not so easily share it. China and other developing countries know this, so the issue is likely to be the most contentious as they enter intense international negotiations next year over a successor treaty to the Kyoto Protocol, which expires at the end of 2012. The protocol does not bind poor nations to achieve targets for cuts in emissions of greenhouse gases. The European Union and United States will insist the emerging economies accept emissions caps under the successor treaty. The timing of the release of China's latest position paper is no accident. Next month, Beijing will host a United Nations conference on climate change; it is working to buttress its international position. And its argument carries weight. Most of the greenhouse gases now trapped in the atmosphere, and causing climate change, were produced by the rich countries when they were industrialising. It is, therefore, both in their own interests and that of historical justice that they pay a substantial part of the cleanup costs. Beijing's proposal may turn out to be too much for rich countries to accept. Still, it establishes a starting point for negotiations. We live in one world. Nations rich and poor alike have a responsibility to preserve and protect it. All sides need to devise a fair successor to Kyoto which shares the costs and generates benefits for future generations.