David Cameron, leader of the Conservative Party, identifies three things that should concentrate minds in 2007 and beyond

PA

We are now seven years into the 21st century and the peoples of the West must wake up to a new reality. We may be conditioned, historically and culturally, to regard ourselves as being at the epicentre of human progress, but what was true in the 18th, 19th and 20th centuries will not be true of this one—and ours is the generation that will have to deal with it.

Europe and America may not decline in absolute terms but will certainly do so relative to other continents. Sharing global leadership with India, China and other emerging powers is an inevitable consequence of a power shift driven by economic growth on an almost unimaginable scale. As the world’s centre of gravity moves from Europe and the Atlantic to the south and the east we need to define the key challenges.

The first great challenge we face is the urgent need to protect our planet. Without action on the environment, conflicts between nations and ideologies, however profound, are mere self-indulgence. The threat of climate change is real and the costs of failing to act are huge. Those costs are financial and social, as well as environmental—and, while they will fall on all countries, they will hurt poorer countries the most.

As climate change continues, it is widely predicted that extreme weather will only get worse. Rises in sea levels could displace millions of people and submerge vast amounts of prime agricultural land. As river basins dry up and temperatures increase, agricultural losses could be enormous.

In the past we have been able to negotiate environmental agreements that recognise the developed economies’ share of the responsibility for environmental problems. For example, in the successful Montreal protocol on ozone-depleting substances, India’s and China’s compliance was phased in. There was also provision for substantial technology transfer to help make necessary changes.

This should be a model of how to tackle the challenge of climate change today. The fact is that our planet simply could not withstand the prolonged shock of India and China showing the same reckless disregard for our environment that has been shown by the United States and Europe since the beginning of the industrial revolution. We need to champion green growth—economic growth that helps rather than harms the environment. We must find solutions to climate change that support rather than obstruct the aspirations of India and other countries for faster economic growth and rising prosperity.

Business will have a vital part to play in this process. Capitalism is the most powerful driver of change on the planet, and I believe that business can and must be an enormous force for good in our world. Responsible business leaders recognise that they have a duty towards the environment, and that they can play a major role in making the changes needed in order to ensure a more sustainable planet.

The second great challenge that we face is globalisation. There is nothing people hate more than being told “you have no choice”, but the ongoing integration of the world economy and the massive social, cultural and political changes that occur in its wake are a tidal wave unstoppable by human agency. Our task is to decide how best to ride the wave in the interests of humanity rather than allow ourselves to be swept away by it.

In the face of the complex economic and social challenge that globalisation represents, I don’t think it’s enough to praise the open economy and leave it at that. The only serious option is indeed an open economy in an open society, but it is also our responsibility to tell the whole truth—that globalisation has losers as well as winners, and that open economies must be matched by strong societies.

We must be honest and admit that the rising tide of the open economy does not always lift all boats. Social justice and economic empowerment involve fixing the broken rungs at the bottom of the ladder from poverty to wealth. A strong society is built on strong institutions—institutions with a social, not just a practical, role.

Globalisation leads to a more open climate for business and investment, which also means we need further measures to promote free and fair trade. We should remove non-tariff barriers to trade, and the barriers to entry for financial services. We must also try to restart the Doha round.

The populism of fools

The third great challenge that we face is international security. We need a sense of balance, proportion and wisdom in handling the complex and dangerous challenges of foreign and security policy in the 21st century. In particular, we require both implacable resolve and fine judgment in tackling the greatest threat to our security—terrorism. It is our duty to find and defeat those responsible for planning international terror, to do everything we can to stop further outrages and, in our broader response, to make the world safer for the future.

Of course, in responding to terrorism mistakes have been made and we should acknowledge, for example, that the conduct of the war in Iraq has caused problems. Nevertheless, in a post-September 11th world democratic nations should assert their common values and understand that anti-Americanism is the populism of fools.

These challenges and how we respond to them will define life for our children and grandchildren. Opting out is not an option—all of us need to be prepared.