What the G-8 summit will do

The G-8 nations, which make global decisions on macro-economic issues, are to meet June 6-8 in Heilegendamm, the Baltic seaside resort in Germany. The G-8 are the US, Japan, Germany, the UK, France, Italy, Canada and Russia.

China, India and Brazil are invited as observers for a section of the conference.

This year Germany will preside over the summit and the agenda includes climate change, efforts to stop uranium enrichment by Iran, aid to Africa, currency exchange rates and global growth. German Chancellor Angela Merkel and her European colleagues are very keen on paving the way for an agreement on an action plan on climate change.

The European countries are planning to prepare for a new round of international climate treaty negotiations in Bali in Indonesia in December to ready a successor document to the Kyoto Protocol of 1997, which committed developed countries to cut greenhouse gases emissions by 5 per cent from the 1990 levels. The US originally signed the Kyoto Protocol and subsequently refused to implement it.

The Kyoto Protocol's emphasis was on energy efficiency, energy conservation and carbon trading. The US's approach focused on generation of nuclear power, bio-fuels and on R&D for clean energy.

President Bush recently proposed that major countries that are responsible for generation of high quantities of greenhouse gases should meet and set an overall reduction goal and leave it to individual countries to decide how to meet it.

Merkel, British Prime Minister Tony Blair, UN Secretary General Ban Ki Moon and European Union Energy Commissioner Andris Piebalgs have welcomed President Bush's recent proposals announced on March 17 in his address to the National Oceanic and Atmospheric Administration.

However, some German commentators, including Chancellor Merkel's chief G-8 negotiator Bemd Pffanbach, have indicated that the German chancellor would resist attempts to reject the United Nations as the main forum for climate talks or distort the state of scientific knowledge. Dr Merkel is a physicist.

President Bush's proposal limits climate change negotiations to the US, the European Union, India, China, Brazil, Russia, Canada, Japan, Australia and South Korea -- the major emitters of greenhouse gases. Perhaps a few more may be added to the list.

The European complaint is the Bush proposal is not likely to work and they cite that while the European countries have reduced greenhouse gas emissions by 1.5 per cent by 2005 under the 1990 level in the US it has gone up by 16 per cent during the same period.

In spite of such strong criticism of the US, in Europe there is optimism that Chancellor Merkel's friendly relationship with President Bush would contribute to bridge the divide between Europe and the US during the forthcoming summit.

There is a basic difference in approach between the US and Europe. The latter wants to deal with the issue in the UN forum. The US wants the issue to be considered by the major greenhouse gas emitters -- namely the industrialised countries and rapidly industrialising nations like China, India, Brazil etc. The US is confident that the problem could be addressed by research and development and is therefore keen to associate major US industrial firms.

While in Europe there is still a strong objection to reviving nuclear energy the US is keen on utilising nuclear energy as one of the major sources of clean energy. The US sees in the R&D path for generation of clean energy an opportunity to maintain its global technological and industrial leadership and increase the dependency of the rest of the world on itself.

The US understands that newly industrialising countries like China, India, Brazil and others cannot afford to sacrifice their economic growth at the altar of cutting back greenhouse gas emissions. Consequently, the future is in clean energy generation.

The US has proposed a Global Nuclear Energy Plan and is advocating the development of proliferation resistant reactors and supply of reactor fuel by international centres. The US's energy strategy is intended to sustain its leadership of the world even while catering to the energy needs of fast-growing countries which have sizeable proportion of global population.

The US's nuclear energy strategy, including their offers of civil nuclear energy to China and India, appears to be inspired by their realisation that addressing the energy problems of China and India is not only in their interest, it will serve to integrate these countries with the international system led by the US but will also ensure the US's global leadership. Unfortunately, many people still living in the Cold War era do not see this and continue to harp upon outdated Cold War logic and proliferation theology.

If the climate change issue becomes one for solution by the UN there are less chances of research-based solutions and a higher probability of appeal for cut-back on high consumption levels of industrialised nations. That, in turn, will lead to demands for stoppage of further increase in emission of greenhouse gases by large developing countries like China, India and Brazil.

It is very unlikely that China and India will get in future the type of exemptions they got in the Kyoto Protocol.

In Europe, Germany leads in clean coal technology, solar energy and other forms of renewable energy. Most of the European countries do not face the possibility of rapid population growth, problems of poverty alleviation and raising the standard of living of large populations and consequently rapidly expanding energy demands. Therefore, the European approach is conservative, gradual and risk-averse.

The US is unlikely to give up its option to generate more energy to meet the demands of a growing population and forego the opportunity to ensure its own economic growth and technological leadership based on supply of clean energy technology to the world.

Neither the US nor the rest of the world can afford to fail to reach a compromise.

The other issues, such as efforts to halt Iranian uranium enrichment and aid to Africa are not likely to generate too much controversy but the issue of currency rates may result in some heat. There is a widespread feeling that the Chinese yuan is kept deliberately undervalued. The recent fall in the dollar is also bound to come up for discussion.

It is possible that Russia may raise the issue of US plans to erect missile defence in Eastern Europe. In turn, President Putin's strident criticism of US politics last week may also attract attention of the conference participants. Under the agenda item global growth, the recent negotiations on energy supply from Russia to Europe and the US-Russian competition on oil pipelines from Central Asia may also be discussed.

The discussion on global warming is bound to generate a lot of heat within the conference chamber.