LONDON  - China and the United States, key to tackling the climate crisis, are both acting on global warming and must start giving each other credit for it, former World Bank chief economist Nicholas Stern said on Tuesday.

Stern, who produced a seminal report last October on the economics of climate change, said the two countries -- one the world's biggest polluter and the other fast rising up the scale -- had to open their eyes and start talking to each other.

Climate change economist Nicholas Stern (L) and Canadian environmentalist David Suzuki share a laugh while discussing the economic costs of action and inaction in the fight against climate change during a news conference at the Toronto Stock Exchange in Toronto, February 19, 2007. [Reuters]

"The United States is moving," Stern told an audience of bankers, politicians and business people at a Reuters Newsmaker event. "And China is moving."

"If the United States will recognize that China is moving and if China will recognize that the United States is moving ... then you can have that kind of discussion," he said, urging more speed from both sides.

The United States rejected the Kyoto Protocol -- the only global action plan to combat global warming -- saying it would be economic suicide. China, which is building one coal-fired power plant a week, is not bound by it.

Intensive diplomatic discussions are under way to try to find a successor to Kyoto, which expires in 2012, and to extend its scope and membership.

But US President George W. Bush refuses to have any part in a new treaty that does not include the major developing nations. They, in turn, refuse to commit to serious greenhouse gas emission cuts unless the U.S. does likewise.

RESENTMENT

"We shouldn't underestimate the resentment that India and China and the other developing countries feel on this issue," Stern said. "They say 'you guys stuck it all up there ... and now you are asking us to solve your problems."'

Stern, who has worked extensively in both China and India and who has just returned from the United States, noted that U.S. cities, states and businesses were already taking action regardless of the view from the White House.

He noted seven or eight states were setting up a system to cap carbon emissions and trade emission permits, and many cities and businesses had committed themselves to strong greenhouse gas emission reductions.

Likewise, China was reforesting, had set tough targets on energy efficiency and was taxing gas guzzling vehicles.

"In India and China I spend a lot of time pointing out that the United States ... is actually doing quite a lot," he said.

"When I am in the United States I try to point out what China is doing."

Leading scientists predict average world temperatures will rise by 1.8 to 4.0 degrees Celsius this century due mainly to carbon gases from burning fossil fuels for power and transport.

Stern said the world was already on course for a rise of two degrees Celsius and would pass through three degrees with massive loss of life unless urgent action was taken.