Merkel G8 drive under threat before key summit

German Chancellor Angela Merkel had hoped to unite the international community behind the common goal of combating climate change at a Group of Eight (G8) summit she will host on the Baltic coast next month.

But with less than three weeks to go before leaders converge on the resort of Heiligendamm, her drive for an ambitious deal on global warming is faltering in the face of US resistance and tensions with Russia.

The showcase meeting risks turning into a pageant of diplomatic discord.

One senior German official told Reuters that Ms Merkel faced an uncomfortably "high degree of political risk" as the clock ticks down on the annual summit of industrialised nations, which will also discuss African poverty and global economic cooperation.

"We are in a really difficult situation right now and to be perfectly honest that is not going to change much," the official said, requesting anonymity.

Envoys from G8 countries are due to hold final pre-summit talks in Heiligendamm this week to try to iron out differences on climate change, but the prospects look bleak.

The Germans have laid out ambitious targets in a draft G8 communique that was sent to partners last month.

In a copy seen by Reuters, Berlin is pushing for a G8 commitment to limit global warming to two degrees Celsius this century and cut world greenhouse gas emissions by 50 percent below 1990 levels by 2050.

The Germans want the G8 to endorse carbon trading as a means of curbing climate change and are pressing partners for pledges on energy efficiency - an area where they hope Washington may have room to compromise.

Ms Merkel wants the June 6-8 summit to lay the groundwork for an extension and strengthening of the Kyoto Protocol ahead of a key United Nations conference in Bali, Indonesia in December.

"It is absolutely necessary that in at least one of these areas a quantitative goal is agreed by the G8 states," said Hans-Joachim Schellnhuber, head of the Potsdam Institute for Climate Impact Research and an adviser to Ms Merkel.

Despite active lobbying from Merkel and British Prime Minister Tony Blair, however, US President George W. Bush has given no indications he will sign up to any of the German aims in Heiligendamm, officials involved in summit preparations say.

The EU favours the cap and trade approach and says by penalising carbon emissions it can promote potentially lucrative clean energy technologies. Washington, which refused to ratify Kyoto citing a risk to jobs, prefers to promote such technologies through public spending and incentives. Chief US climate negotiator Harlan Watson summed up the US stance last week.

"We don't believe targets and timetables are important, or a global cap and trade system," Watson told Reuters in Bonn. "It's important not to jeopardise economic growth."

As a result, German officials are reducing their hopes for what the summit can deliver and focusing on how best to "package" a sub-par result.

Experts advising the German government are urging Ms Merkel to hold firm and arguing against issuing another watered-down statement on global warming like the one unveiled two years ago in Gleneagles, Scotland.

As an example of how Ms Merkelcould proceed, they point to the EU's refusal earlier this month to back a vaguely worded consensus document on climate change at a meeting of the UN Commission on Sustainable Development in New York.

"Ms Merkel must know where the dividing line is between a deal that is acceptable and one that is irresponsible because it would be a step backwards," said Hermann Ott, Berlin director of the Wuppertal Institute, a climate research think tank.

"The failure at the UN conference in New York was surely meant as a warning in the run-up to Heiligendamm."

It is questionable, however, whether the consensus-oriented Ms Merkelwill want to risk a row on climate at a summit where other diplomatic tensions may run high.

German government officials are particularly worried about differences with Russia tarnishing the carefully managed meeting of G8 leaders at the elegant seaside Hotel Kempinski.

Ms Merkeland President Vladimir Putin clashed last week at a frosty EU-Russia summit which underscored the deterioration of relations between Moscow and Western powers on issues ranging from the independence of breakaway Serbian province Kosovo to US plans to put parts of a missile shield in central Europe.

"We should not underestimate the seriousness of these issues," a senior German diplomat said.