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US offers plan to break deadlock in climate talks (Plus other stories on UN Climate conference),

US offers plan to break deadlock in climate talks (Plus other stories on UN Climate conference)

By Matt Daily

THE HAGUE, Nov 21 (Reuters) - With three days to go before Friday's deadline for a U.N. deal on reducing "greenhouse gases" believed to cause global warming, the United States has come up with proposals to break a deadlock with the European Union.

But high-level political delegations still face a daunting task in reaching a consensus among the 185 participating nations.

Current forecasts estimate that the Earth's temperature will rise by as much as six degrees centigrade (11 degrees Fahrenheit) by 2100, lifting ocean levels by nearly a metre (three feet).

Such a dramatic temperature rise would also lead to a higher number of devastating storms, such as the type that have hit Europe, Asia and Africa in recent months, displacing thousands and causing billions of dollars in damage.

Industrialised nations agreed to cut their emissions under a plan agreed in Kyoto in 1997, but pollution has continued to rise and none of those countries have yet legally bound themselves to the targets.

The Hague talks, which aim to set clear rules on how countries can meet their targets, have stalled largely because of massive differences between the Unites States and the European Union.

BID TO RESTART HORSE-TRADING

In an attempt to restart horse-trading, the U.S. negotiators unveiled the fine print of their controversial plan to count their forests and farmland as "sinks" which suck up carbon dioxide from the atmosphere, offsetting that gas uptake from their emissions reduction target.

Frank Loy, U.S. Under-Secretary of State for Global Affairs and head of the U.S. negotiating team, said that under the plan the United States would reduce the amount of carbon absorbed by those areas it would be able to claim, to address EU fears that the whole amount would be too easy an option.

"The new plan takes in a smaller part (of carbon) than is actually being sequestered in our forests," Loy said. "It's one of the most important issues of this protocol and I hope that it's closer to resolution than before."

The plan would mean green areas in the United States would take it about 20 percent of the way toward meeting its Kyoto targets, the U.S. delegation said.

But the EU negotiators reacted coolly to the plan, which would allow the United States to avoid costly reductions in its fossil fuel usage. An EU source said the Europeans were still studying the details but its first reaction was negative.

The two blocs, which clashed last week over the same issue, were due to engage in technical talks over the proposal before moving onto more major political discussions some time later on Tuesday, the sources said.

U.S. AND FRANCE CLASH

On Monday, the United States and France clashed as the French President Jacques Chirac accusing the world's biggest polluter of ducking its responsibility to cut greenhouse gas emissions.

"Each American emits three times more greenhouse gases than a Frenchman," Chirac told the conference in the Hague.

"It is in the Americans, in the first place, that we place our hopes of effectively limiting greenhouse gas emissions on a global scale," he said. "No country can elude its share of the collective effort."

Republican Senator Chuck Hagel of Nebraska reacted sharply to the jab, saying, "I don't believe President Chirac's statement today was particularly helpful for the success of this conference."

"To single out the United States, as he did rather directly, does not facilitate a cooperative spirit."

The EU and the United States remain at loggerheads over the U.S. desire for unlimited "flexible mechanisms" it says were implicit in the Kyoto pact.

The EU wants those nations required to make emissions cuts to make at least half of them at home, limiting use of emissions trading or other flexible mechanisms.

18:09 11-20-00

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Oil consumers concede OPEC's $25 barrel is fair

By Richard Mably and Tom Ashby

RIYADH, Nov 19 (Reuters) - Leading oil consumer nations on Sunday conceded that OPEC's $25 a barrel target was reasonable but failed to obtain assurances of extra supplies to relieve high fuel costs this winter.

In two days of talks in the Saudi Arabian capital, petroleum importers and exporters said they wanted stable prices and homed in on a $25 "fair price" for crude -- but they stopped short of putting it in writing and disagreed over how to get oil down from heights now of more $32 a barrel.

U.S. Energy Secretary Bill Richardson said he wanted more supply from the Organisation of the Petroleum Exporting Countries, but cartel kingpin Saudi said it had done enough for the time being.

"They have not made a commitment to increase production at the next OPEC meeting (in January)," Richardson told Reuters in an interview after the forum gathering 56 nations and intergovermental agencies.

Saudi Oil Minister Ali al-Naimi said consumer nations would have to wait. "It is only reasonable to await the impact of at least the last two increments," Naimi said of this year's previous OPEC supply increases.

"Saudi Arabia has always said and continues to say we are ready to produce what it takes to bring market stability," he added.

At least the West received guarantees that Middle East producers will not consider another 1970s-style embargo and retaliate for Israeli killings of Palestianian by denying supplies.

"In the discussions this morning, there was a general view that oil would not be used as a weapon. We were encouraged by those statements. We see no evidence of any linkages between the Middle East situation and oil supplies," said Richardson.

25 SEEN AS FAIR PRICE

Saudi's Naimi said there was now "no big difference"

between the two sides on what constitutes a fair price for oil. OPEC has targeted a range of $22-$28.

"Generally I would say that $20-$25 is attracting both producers' and consumers' strong support," said Richardson.

That marked a change of tack for the United States which at previous such gatherings has refused to discuss prices to avoid allegations of market interference and price fixing.

"There's no danger of inflation with an oil price of $25," said French Industry Minister Christian Pierret.

Little headway though was made on how to smooth the wild price swings that over the past two years first stunted investment in producers' supply capacity and then slowed economic growth in the West and Asia.

Oil prices, set by dealers on futures markets in London and New York, have stayed stubbornly strong in recent months as a result of low inventories and fears over heating oil shortages in the West this winter.

Prices since the 1990-1991 Gulf War have averaged nearer $18, well below OPEC's new target range.

Suspicions remain among importers over OPEC's intentions for prices.

"We've heard about (OPEC's target) and we know it doesn't work," said Dutch Economics Minister Annemarie Jorritsma. "Can we really fix the price and do we really want to? All we can really agree is that the market doesn't fluctuate between $10 and $35," she told reporters at a briefing.

Delegates said that while there was common ground between the world's biggest importer, the United States and Saudi Arabia, the largest supplier, there was a larger divide between smaller nations.

"Let's face it, countries like India need import prices as low as possible while smaller producers with no extra capacity want to squeeze out every penny possible," said a delegate from one major consumer nation.

FUEL DEMAND CLIMBING, INVESTMENT NEEDED

While formal agreement on price and production remained elusive, the two sides agreed that huge investment was needed to fuel unrelenting world growth in demand for oil, particularly transport fuels.

The International Energy Agency's Executive Director Robert Priddle said petroleum was expected to maintain its 40 percent share of the overall energy market to 2020, generating demand for more than a doubling of exports from Middle East OPEC nations.

Formal discussions on data transparency masked distrust over how far producers are likely to go in supplying statistics for the timely calculation of vital industry inventory levels.

"If Saudi Arabia and the others come up with supply data that will help a lot but there's a long way to go before that happens," said an official with one intergovernment agency.

Saudi has proposed a permanent secretariat in Riyadh to maintain dialogue.

Japan will host the eighth producer-consumer forum in 2002.

11:20 11-19-00

U.S. says Chirac pollution attack unhelpful

By Robin Pomeroy

THE HAGUE, Nov 20 (Reuters) - U.S. lawmakers reacted sharply on Monday to criticism from French President Jacques Chirac that the United States was ducking its responsibility to cut greenhouse gas emissions implicated in global warming.

Chirac opened a crucial second week of U.N.-backed climate change talks with a direct call to the United States, the world's biggest polluter, to take a lead in cutting pollution that scientists warn could have catastrophic consequences on global weather patterns.

"Each American emits three times more greenhouse gases than a Frenchman," Chirac told the conference in the Hague.

U.S. senators attending the Hague talks, called to put flesh on the bones of an accord signed in the Japanese city of Kyoto three years ago, responded angrily, saying the French leader's comments were "unproductive."

Republican Senator Chuck Hagel of Nebraska said: "I don't believe President Chirac's statement today was particularly helpful for the success of this conference.

"To single out the United States, as he did rather directly, does not facilitate a cooperative spirit."

Fellow Republican Senator Larry Craig of Idaho admitted the United States was guilty of wasting energy, but said this had brought benefits in science, technology and medicine.

Defending his own state's large agricultural output, Craig said two thirds of U.S. farm production was exported to feed people around the world.

"Are (our farmers) large consumers of energy? Yes. Are they large producers? Yes. They're proud of it. The president's speech was very unproductive," Craig said.

LEADERS SEEK TO BREAK IMPASSE

Political leaders arrived in The Hague to try and break a deadlock between the world's wealthier countries over who should pay to cut pollution.

While Europe has urged the industrialised world to take tough action by cutting emissions of carbon dioxide, the main culprit in raising global temperatures, the U.S. and others prefer market-based measures such as buying the right to pollute elsewhere.

They could do this by trading emissions credits -- buying pollution quotas from nations who easily meet their Kyoto emission reduction targets.

This would allow the United States to avoid unpopular steps at home, such as higher energy taxes on industry and consumers.

Both Hagel and Craig are wary of the Kyoto deal's potential threat to the U.S. economy and sovereignty, key to the U.S. Senate's opposition to the accord.

U.S. Vice-President Al Gore, a Democrat locked in a bitter struggle for the next presidency with Republican George W. Bush, was deeply involved in the Kyoto agreement.

Both senators said they wanted the United States to remain a part of the global process to tackle climate change and would not want to see the Senate rush to throw out any agreement.

"If you are asking whether bringing it to the Senate for a slam-dunk 'no' vote would solve the problem, I don't think it would. I think we should remain engaged," Craig said.

The Kyoto pact requires the United States to cut carbon emissions by seven percent from 1990 levels by 2008-2014.

CHIRAC CALLS FOR REVOLUTION IN THINKING

The EU wants those nations required to make emissions cuts to make at least half of them at home, limiting use of emissions trading or other flexible mechanisms foreseen under Kyoto.

Chirac said society needed to undergo a "revolution in our way of thinking" and change the way economies consume natural resources.

"Cutting down on our consumption of raw materials, diversifying our sources of supply, recycling waste, (using) new materials, energy efficiency and developing renewable energies: these are the choices that ought to inspire us in our policy making," he said.

However, the French leader, who currently also holds the presidency of the 15-nation EU, made one conciliatory gesture towards the United States.

He appeared to offer some support, over the long term, to a U.S. idea of using new and existing forests and farmland to soak up pollution, so-called carbon "sinks."

"If it were to be (scientifically) confirmed that reforestation, the fight against desertification and the fight against global warming can be mutually reinforcing, then we would be wrong to rule out this course."

The EU has so far opposed the carbon "sink" idea, put forward by the United States, Japan and Canada as a way to offset some of their emissions reduction targets.

Scientists say the Earth's temperature could rise by up to six degrees Centigrade (10.8 degrees Fahrenheit) by 2100, with devastating consequences on the environment and human life.

14:42 11-20-00

Tue Nov 21