Developed Nations Wanted to Play Pollution Poker

Key to the proposal by the European Union (EU) was the "bubble" -- a plan which would have required all industrialized countries to cut emissions of carbon dioxide (CO2), methane and nitrous oxide by 15 percent of 1990 levels by 2010.

But there was a catch with the EU position: it advocated a flat- rate cut in greenhouse gas across the developed world, yet plans the kind of flexibility and quota-swopping within its 15-nation membership that it wanted to deny the rest of the world.

At home within the 15 EU states, the bloc planned differentiated cuts that could allow some poorer nations like Portugal and Spain to actually increase emissions -- the balance being made up across the EU by countries like Britain and Germany that have the capacity to cut more than the EU would require.

These differentiated targets would help the EU as a whole to create a so-called "bubble" of emissions quota totals in which the total adds up to the required, even if the some of the individual nations are hiking their emissions.

Britain all but shut down its coal industry to silence powerful miners' unions in the 1980s, drawing instead from its plentiful gas reserves; Germany dealt with the problem of former East German heavy industry inherited after reunification by closing it down. The result was a substantial, statistical drop in CO2 emissions that have nothing to do with environment policy, but which are being used, years later, to balance emissions increases elsewhere in the EU.

The "bubble" was seized upon by other nations as the source of a loophole to circumvent the problems of emissions cuts, although groups like WWF argued in the first week of the Climate Summit that such an agreement was dangerous.

"Agreed reductions must not be offset by allowing loopholes which under the headline of flexibility are being considered as part of the final agreement," the WWF said.

"If utilized, these loopholes could effectively cause an increase in emissions from industrialized countries instead of reductions and thus undermine the entire protocol."

As with Germany, Russian emissions have fallen dramatically as the end of state subsidies closed factories across the Federation. Russia was said to be touting for U.S. partnership in a bubble that could allow the U.S. to emit already abated emissions from Russia for a given price.

"This is a type of 'hot air' emissions-trading. Russia would be selling emission reductions that had not resulted from efforts to protect the climate while the purchaser would avoid having to take actions at home," the WWF said.

Emissions-trading regime will most likely grant Russia a quota far in excess of what it needs, and trading would allow emissions to increase.

There was another dispute over EU policy, this time over negotiations on "sinks" -- any process, activity or mechanism which removes a harmful gas from the atmosphere. These include forests, which absorb CO2.

According to the WWF, confrontation mounted within the EU over what is called the "net approach," which refers to setting targets on greenhouse gas emissions minus the amount absorbed by "sinks." Leading scientists warn against using the net approach, saying sinks cannot be quantified accurately.

In terms of numbers, the EU's 15 member-states discharge less CO2 into the air than the United States. And, unlike the United States, their emissions are declining. In 1994, the EU discharged more than three million tons of CO2 -- marginally down from 1990 levels.

But at the same time, the U.S. produced growing levels of CO2 -- 5 million tons of CO2 in 1995, a five percent increase in five years. The discharge is expected to rise by 23 percent in 2010.