"They are abandoning what President (Bill) Clinton has called the outdated idea of the industrial revolution-that more economic growth means more pollution," the US under secretary of state for Global Affairs said, adding, "We need to build on these successes and look for market-oriented strategies that will reap rewards for developing countries that voluntarily reduce their emissions."

Loy congratulated Argentina for its announcement in Bonn of a voluntary target to reduce its greenhouse gas emissionsgrowth rate. Argentina became the first developing country to announce such a target when it said it would reduce its emissions by 2-10 per cent below a business-as-usual level during the period from 2008 to 2012. Loy called for a new, constructive dialogue with developing countries based on their desire to address climate change and pursue a path of developing their economies in cleaner, less polluting ways. The market mechanisms were the key to doing that.

"We need to explore at a high level, in an appropriate forum, the progress that has been made and how developed and developing countries can cooperate to broaden and strengthen the enormous progress by developing countries," Loy told delegates.

Loy also emphasised, however, that developing countries-which are not required to take on emissions targets under the Kyoto Protocol-must "in some appropriate fashion" meaningfully participate in the effort to control emissions, especially key developing countries like China and India. Loy said this wasnecessary both for the environment-pointing out that developing countries will produce about half of all greenhouse gas emissions by 2020-and because other countries, including the United States, need to "have a sense that, in some way, the effort is shared and not borne unequally."

Loy said he believed the Kyoto Protocol could be ratified by the US if it is cost-effective, includes sound rules for the market mechanisms and compliance, avoids "artificial limits so that nations can meet their commitments at a reasonable and predictable cost" and requires more meaningful participation by key developing countries.

"If we fail to meet these conditions, the treaty will not be ratified," he said. "If we do meet these conditions, we believe it will be."

The US Senate has said it will not ratify the protocol unless the treaty permits unrestricted use of the market mechanisms and there is meaningful developing country participation. The protocol will only enter into force and become legally binding when it isratified by at least 55 countries, including developed nations accounting for at least 55 per cent of developed country emissions. So far only 14 countries-all from the developing world-have ratified the protocol.