I think I heard the quiet tinkling sound of an unacknowledged breakthrough last week: a statement that could make the difference between success and failure at December's crucial climate talks in Copenhagen.

One of the issues that could sink the talks is the question of "outsourced emissions". This refers to greenhouse gases produced in one nation on behalf of another. The UK, for example, is comfortably meeting its commitments under the Kyoto protocol only because much of our manufacturing industry has moved to China. Under Kyoto rules, the pollution produced by Chinese factories making goods for the UK belongs to China. The protocol counts only the production, not the consumption, of greenhouse gases.

China says this is unfair. Around half the recent increase in its emissions arises from the manufacture of goods for western markets.

This pollution should, it says, belong to the consumer nations, not the producers. A successor to the Kyoto protocol which did not recognise this would punish China for our consumption.

The rich nations have been furiously resisting this idea. That's not surprising: a study by the Stockholm Environment Institute for the British government suggests that carbon dioxide emissions caused by the UK's consumption increased by 18% between 1992 and 2004, even as our production emissions fell. Had the Kyoto agreement measured consumption, not production, the UK would be missing its targets by a very long way.

I'm with China. Greenhouse gas emissions are rising because consumption is rising. Unless we address this, we cannot prevent climate breakdown. It doesn't matter where production takes place: the problem is that we are consuming too much.

During the panel discussion that followed a screening of the eco film Age of Stupid last week, I asked Lord Stern about this. His answer surprised and delighted me: it represents a dramatic departure from the policy of the government with which he has worked so closely. Here's what he said:

It is a point that the Chinese authorities make very clearly and strongly and I think that it's a very sound one. My own view is that we need a combination of the two things. If you move to a different kind of division of labour where another country, in this case China, starts to make things that we might have made, and therefore has that production process in the emissions occurring there, rather than their own country, then we're jointly responsible for that and both parties gain from the division of labour. That's what trade is all about and that's why trade can help development. So my own view is that we probably need something like an average of the two, or a combination of the two. But the logical point China makes is that there is a definite responsibility with the consumer and not just with the producer is a sound one.

When Stern talks about these matters, governments listen. If he is prepared to pursue this proposal - that outsourced emissions should be shared between producers and consumers - there's a good chance that it could be adopted at Copenhagen. It is surely the most realistic way to break the deadlock.

Monbiot.com