America the key as delegates arrive for Bali conference

Thousands of delegates have arrived on the Indonesian island of Bali today for the largest-ever conference on climate change but the shadow of the world's biggest polluter, the US, hangs over any hopes of an effective deal emerging from the marathon talks.

The negotiations will attempt to draw the "road map" to a replacement for the Kyoto Protocol, which was critically undermined by the refusal of the world's largest economy to ratify the agreement.

A similar refusal to participate in its replacement would render any new deal pointless, Yvo Boer, the UN's climate chief, said yesterday. "To design a long-term response to climate change that does not include the world's largest emitter and the world's largest economy just would not make any sense," he said.

The crucial climate talks come during the twilight of George Bush's presidency, and while the US claims that it is eager to launch negotiations, the White House has campaigned hard against the mandatory emissions cuts that scientists agree will be necessary to prevent catastrophic climate change.

Only 36 industrial nations signed up to emissions caps under Kyoto. Most nations agree on a need for more action but disagree about how to share out the burden.

RICH versus POOR

The industrialised countries of the north have created the build-up of heat-trapping gases in the atmosphere as they built the carbon economies which made them rich. They will therefore have to shoulder the burden of CO2 reductions either by capping their own industries or paying developing countries to do it for them. This at least is the argument of much of the southern hemisphere and the basis for Kyoto. Now the developed world says China and India must cut their emissions.

CARBON MARKETS

If industrial emissions can be capped and then traded the markets will put a price on CO2 emissions and the faltering steps to a low carbon economy could become a sprint to salvation. Bali may see carbon markets opened to credits based on cutting emissions from non-industrial sources such as deforestation. Concerns remain that rich countries might try to buy their way out of painful reductions.

RESEARCH and TECHNOLOGY

The one area of the Bali talks where the US will lead the way will be investment in new technologies. Developed countries are eyeing a potentially lucrative future industry as cash flows into everything from advanced bio-fuels and next-generation power stations to deep-sea carbon storage. There are serious concerns that industrialised governments' faith in so-called science fiction solutions to climate change is blinding them to the need to control unsustainable consumption.