Environment: Kyoto gets off to an icy start

An agreement on measures to save the world from global warming appeared further away than ever last night with the European Union accusing the United States of trying to find loopholes. Richard Lloyd Parry reports from the first day of the Kyoto climate summit.

Icy exchanges between European and American officials and few signs of feasible compromise signalled an unpromising first day of the Kyoto summit.

The only hope for the conference - known as COP3 or the Third Conference of the Parties to the UN Framework Convention on Climate Change, to give it its full name - appears to lie in a last-minute agreement by ministers, including the deputy prime minister, John Prescott, who will arrive in Kyoto for high-level negotiations at the weekend.

Despite months of intensive preparation, wide differences still exist between the participants at the conference which is taking place in this ancient Japanese city and which aims to reach a world-wide agreement on reducing greenhouse gases.

The Europeans, along with small island states who feel especially threatened by rising sea levels, are pressing for the most radical measures: the EU wants a 15 per cent reduction in 1990 levels of greenhouse gas emissions by 2010.

The US, the world's biggest producer of ozone-depleting gases, has much more conservative goals - the stabilisation of gas emissions at 1990 levels, as late as 2012. Australia, as a big exporter of coal with rising domestic fuel consumption, wants to increase its own emissions; the conference's host, Japan, takes a conciliatory middle line, although it has moved closer to the US.

The points of disagreement are many and technical, ranging from the number of gases to be included in the final deal, to the role played by forests in absorbing carbon dioxide. But controversy yesterday focused on what is known as the EU "bubble", whereby European pollution is considered collectively rather than on the basis of individual countries.

Under the EU's proposal less advanced members such as Greece and Portugal could increase their output of pollutants, while countries such as Britain and Germany compensate with more drastic improvements. The Americans and Australians insist that this is unfair, and that if the European states can adopt different targets this option should be available to other countries.

For the first time yesterday, the US incorporated into its official position the concept of "differentiation" - in other words, different targets for different countries, rather than a single percentage reduction adopted by everyone. Japanese officials welcomed this as a sign of "flexibility", but a European spokesman denounced it as a ploy which would dilute the drive for comprehensive action, and result in a smaller overall reduction of pollutants.

"We've detected flexibility, but it's in the wrong direction," said Pierre Gramegna, Luxembourg's ambassador in Japan, and whose country holds the EU presidency. "Our impression is that the game is to find ever more loopholes, and that is a bad omen. The beginning of the conference is not very encouraging."

Even the Japanese spokesman, Toshiaki Tanabe, said that he was no more than "cautiously optimistic with regard to the outcome of the conference". He said: "Japan is trying to force the US to increase its reduction margin, but also we have to be realistic. I don't think they'll increase until the very end."

Hopes now rest with the meeting of ministers which begins next Monday, and on a round of telephone diplomacy between heads of government. Mr Prescott has made two intercontinental journeys drumming up support for an idea which officials refer to as the "window of credibility". This refers to the lag between an agreement in Kyoto next week, and its ratification by legislatures before which it will have no legal force.

If Congress becomes less dominated by Republicans, it may become easier for the US to take a softer line. In the meantime, developing nations will have the opportunity to propose their own cuts - another US demand. Presented in such a way, all sides could claim an agreement as a victory - while the Europeans emphasised numerical targets, the US would not feel itself immediately bound by their terms.