"We can and must steer the trend toward energy policy and ecology, and we hold the key in our hand," Steinmeier said. Stressing that the US and Europe are among the most innovative economies in the world, he warned that the entire world faced catastrophic consequences if it fails to act.

"We will experience more flooding, more hurricanes, more heat-related deaths, more drought and ruined crops, more deserts, more refugees, more displacement and destitution," he said.

During talks with Californian Governor Arnold Schwarzenegger in Sacramento, the two leaders agreed that Germany and California should team up in the fight against global warming.

"Contact between German and US companies is an obvious option," said Steinmeier, pointing to the state's pioneering record on use of renewable energies.

California is the world's sixth largest economy and a trailblazer in the area of climate policy despite Washington's foot-dragging.

He'll be back

Schwarzenegger accepted an invitation to attend a climate conference sponsored by the Portuguese EU presidency in Lisbon on Oct. 29, Steinmeier said after the meeting.

Schwarzenegger also agreed to visit Germany, explaining that his state was keen to work with Germany because of its track record and "gigantic goals" in building alternative energy sources to protect the climate.

Steinmeier's visit is expected to provide an extra boost to Schwarzenegger's environmental agenda, as California prepares to introduce the European system of carbon unit trading -- a system so far rejected by President Bush.

Experts feel that Europe's experience with the system can provide California with a blueprint for possible pitfalls to avoid.

Two years ago, Schwarzenegger championed legislation to reduce the state's carbon emissions to 1990 levels by the year 2020. According to AFP news service, his Climate Action Team has identified 40 strategies to reduce global warming, including the carbon-trading program, a million-home solar energy initiative, and plans for a hydrogen highway stretching from British Columbia to Mexico.

He has ordered the state's electricity suppliers to produce 20 percent of their power from renewable sources by 2010 and signed environmental agreements with Britain, states in Australia, Canada and Mexico and with the US states of Arizona, Oregon, New Mexico, New York, Utah and Washington.

Thawing climate, thawing tensions

Steinmeier also took the opportunity to warn of the "creeping political alienation" between the US and Europe, and called for a profound renewal of their alliance.

"A long apparent mistrust within Europe towards the US is increasingly replaced by indifference and even skepticism," he said.

Mending this relationship was crucial, Steinmeier said in a speech Thursday night to the Commonwealth Club in San Francisco, the oldest and largest public affairs forum in the United States.

"In coming decades, in this era of globalization, Europe and the US will become more dependent on one another than ever," he said. "For this reason I hope we can revive old sympathies, define common issues for the future and rediscover one another."

Calling for "new way of thinking," he pointed to cooperation on environmental issues but also in business.

"A political regulation of capital and finance markets should also occur, so that stock market crises do not escalate into global economic disasters and speculators are not in a position to push people around the globe into poverty and desperation," he said.

He also called for a greater involvement of Russia in solving international issues.

"We need Russia if we are to secure global stability," he said. "We have failed to agree on security policies with Russia, and this has led to lasting frustration and hostility in Moscow."