David Cameron’s focus on the environment is the lynchpin of his mission to establish a new personality for the Conservative party. Where then is Labour’s response?

The public has been consistently underwhelmed by Labour’s environmental record. The party polls third behind the Liberal Democrats and the Conservatives. They deserve much better. But rising carbon emissions are fatal to Labour’s credibility, particularly when set against strong international leadership.

A step change on the environment would, needless to say, be the right thing to do. And the political case is impeccable. It would enhance Labour’s reputation among important groups such as women, young people and those who have abandoned Labour for the Liberal Democrats. It is a classic test of whether Labour can achieve the much vaunted renewal in government.

There is public support for a greater green focus among many Labour heavyweights and rising stars. David Miliband has brought much new urgency and profile to Labour’s approach since he became secretary of state for the environment, while his predeccessor, Margaret Beckett, is doing her utmost to push the cause through the Foreign Office. Peter Hain focused on the environment in his declaration for the deputy leadership. It was one of five areas identified by Charles Clarke in the speech lost in his broadside against the chancellor. It was the central theme of Douglas Alexander’s conference speech.

But Labour’s direction, even now, depends above all on Gordon Brown. The chancellor already controls the essential levers of tax, spending and regulation, but has historically taken remarkably little interest. He has given this agenda greater attention over the past 18 months. But the recent Stern review on the economics of climate change could be a seminal moment. It provides the essential intellectual platform for the chancellor to initiate a profound shift in the government’s approach to the environment.

But will he make that shift? We may well know even before he moves house. The budget will need to provide a response to the Liberal Democrat (and David Miliband) challenge on environmental taxation, and the chancellor will need to deliver on the expectations raised when he made the environment one of five themes of the 2007 spending review. There is a compelling case for raising taxes on aviation, gas guzzlers and landfill, and for a significant increase in spending on waste and natural resources. Above all, as Stern argued, there is a need to tackle climate change at home and abroad.

But if the chancellor is to develop a new approach that can deliver for the environment and for him personally, he must learn the lessons of Labour’s experience since 1997. Why has Labour struggled?

First, Labour has lacked clear objectives set and driven from the top. Whitehall silo-thinking is a death knell for issue like the environment that cut across government. Labour lacks an overall environmental policy, and political clarity about its priorities and strategy. It needs a narrative that spans climate change, the natural world and the quality of the local environment.

Second, Labour has been too timid in its ambitions. With the exception of the long-term objective to reduce carbon emissions, there are no stirring goals to excite the public and engage the private sector in making Britain a world leader in environmental innovation and technology. Compliance with EU targets does not capture public imagination.

Third, Labour has assumed too often that environmental ambitions are tradeable against business support, and minimised short-term cost at the expense of long-term benefit. New business initiatives have finally eroded that assumption. But Labour should have been building links with progressive companies around ambitious goals from the outset. They should do so now.

Finally, and most importantly, Labour needs a vision of the role of the state that is commensurate with the size of the threat that all parties are now highlighting. Cameron is in the early stages of his personal and policy journey. But his story emphasises the limits of government action and the power of individuals and government. However, tackling the environmental imperative requires more active government, not less. Labour should have the courage to make that argument.

This is not an argument for big government for its own sake, or an avalanche of new regulation. It is an argument for ambitious objectives and a bold framework, set by the chancellor himself. Actions speak louder than words. Labour and its likely future leader need to change gear now, and to develop an ambitious and inspiring agenda for the remainder of this term and beyond. Cameron’s focus on the environment has set it up as a battleground at the next election. How will Labour respond?