British Prime Minister Tony Blair and California Gov. Arnold Schwarzenegger announced an agreement Monday to bypass the U.S. administration and work together to explore ways of fighting global warming.

They agreed to collaborate on research into cleaner-burning fuels and technologies, and look into the possibility of setting up a system whereby polluters could buy and sell the right to emit greenhouse gases. The idea is to use market forces and market incentives to curb pollution.

California Gov. Arnold Schwarzenegger, left, and British Prime Minister Tony Blair talk on stage at a news conference in Long Beach, Calif., Monday.
(Chris Pizzello/ Associated Press)

Environmental groups questioned the value of the agreement, calling it little more than a symbolic gesture.

California is looking to cut carbon dioxide, a byproduct of coal, oil and gasoline combustion, and other heat-trapping gases that scientists say are warming the planet. President George W. Bush has rejected the idea of ordering such cuts.

"This is an agreement to share ideas and information. It is not a treaty," said Schwarzenegger spokesman Adam Mendelsohn. "Right now, all we are doing is talking about sharing ideas."

"It will be markets, not governments, that will decide which technologies are chosen in the future. Governments can give clear, credible, long-term signals to the market which will enable companies to develop the technology that will result in cleaner technology, more energy efficient technology," said a Blair spokesman, speaking on condition of anonymity, in line with government policy.

Kristen Hellmer, a spokeswoman for the White House Council on Environmental Quality, said the agreement was "a wonderful amplification" of talks last year between the president and Blair.

"It's just another step forward," she said. "This is a way to share ideas, what works and what doesn't work."

For Schwarzenegger, a Republican who is running for a full term in November, the agreement comes at a time when he has been trying to distance himself from Bush in this mostly Democratic state.

His aides disputed the agreement was an attempt to sidestep the White House. In a conference call with reporters, state Environmental Secretary Linda Adams said the agency is in "constant contact" with federal regulators, but added that there was no discussion with Washington about Monday's agreement.

Craig Noble of the Natural Resources Defense Council, an environmental group, said the pact had symbolic value, but "the time for talk is over." He urged passage of a proposal, pending in the state legislature, that would make California the first state to cap greenhouse gas emissions from industrial sources.

"The bottom line is, voluntary is not enough," Noble said.

That was echoed by the group Environment California, which said that unless a mandatory and enforceable cap on greenhouse-gas pollution is established, "promises to do something about global warming are nothing more than a lot of hot air."

The world's only mandatory carbon dioxide trading program is in Europe. Created in conjunction with the Kyoto Protocol, the 1997 international treaty that took effect last year, it caps the amount of carbon dioxide that can be emitted from power plants and factories in more than two dozen countries.

Companies can trade rights to pollute directly with each other or through exchanges located around Europe. Canada, one of more than 160 countries that signed Kyoto, plans a similar program.

Although the United States is one of the few industrialized countries that has not signed the treaty, some Eastern states are developing a regional cap-and-trade program. And some U.S. companies have voluntarily agreed to cap their carbon dioxide pollution as part of a new Chicago-based market.

A main target of the agreement between Britain and California is the carbon dioxide from cars, trucks and other modes of transportation. Transportation accounts for an estimated 41 per cent of California's greenhouse gas emissions and 28 per cent of Britain's.

Schwarzenegger has called on California to cut its greenhouse gas emissions to 2000 levels by 2010. California was the 12th-largest source of greenhouse gases in the world last year, bigger than most countries.

Blair has called on Britain to reduce carbon dioxide emissions to 60 per cent of its 1990 levels by 2050. Britain also has been looking at imposing individual limits on carbon pollution. People who accumulate unused carbon allowances, for example, by driving less, or switching to less polluting vehicles, could sell them to people who exceed their allowances, for example by driving more.

Bush has resisted Blair's efforts to make carbon dioxide reduction a top international priority. After taking office, Bush reversed a 2000 campaign pledge to regulate carbon dioxide emissions, then withdrew U.S. support from the Kyoto treaty requiring industrialized countries to cut their greenhouse gases to below 1990 levels.

The United States is responsible for a quarter of the world's global warming pollution. Bush administration officials argue that requiring cuts in greenhouse gases would cost the U.S. economy five million jobs.

Instead, the administration has poured billions of dollars into research aimed at slowing the growth of most greenhouse gases while advocating a global cut on one of them, methane.