U.S. opposes cuts in energy subsidies ; Developed nations urged to take lead on summit plan.

JOHANNESBURG, 28 August 2002 - The United States last night was digging in its heels amid demands at the World Summit on Sustainable Development for a cut in the developed world's subsidies to companies producing fossil fuel and nuclear energy.

Separately, summit delegates are demanding that the United States commit to increasing the amount of renewable energy it uses. The United States is resisting the demand.

Behind closed doors at the intergovernmental negotiations, U.S. delegate Bob Harris had the backing of Canada, Australia and Japan in opposing a draft clause calling for developed countries to "lead the way" in policies leading to "timetables for progressively phasing out energy subsidies which inhibit sustainable development."

That would mean the United States cutting back on support for producers of gasoline, natural gas, coal, nuclear energy and some large-scale hydroelectricity.

The United States is known to be particularly irked at the onus being placed on the developed world, with the developing countries uncommitted to any subsidy cutbacks at least until the developed world's new actions receive a "satisfactory review" in 2007.

Nongovernmental groups last night attacked the U.S. position as contradicting the Bush administration's principled opposition to distorting the free market.

"It's completely hypocritical for the U.S. to be pushing for level playing fields and free markets while, in this case, supporting corporate welfare through these subsidies," said Gunnar Olesen of Denmark, coordinator of the International Sustainable Energy Network.

Business groups, including the International Chamber of Commerce, have said during the summit discussions that they favor the phasing out of what are termed "unsuitable subsidies."

Another debate developed amid demands that the United States support increasing the amount of renewable energy resources used worldwide.

The proportional increase being demanded is less than 2 percent during the next eight years, but the U.S. delegation has argued against setting any specific figure.

The only support for the U.S. position came from an Indian delegate, sources who listened to the closed debate said.

About 13 percent of the world's energy consumption comes from renewable energy sources, but the 2 percent proposed increase is larger than it appears. Firewood is running out in developing countries as forests become denuded, so these populations are increasingly burning more fossil fuel for cooking and heating their homes.

Caption: U.N. delegates Mehmet Arda (left) and Rodney Cooke attended talks on agriculture at the World Summit on Sustainable Development in Johannesburg yesterday. A summit proposal to increase the amount of renewable energy resources used worldwide has been resisted by developed nations, including the United States and Canada. [Photo by AP]; A woman burned cardboard boxes to keep warm at a squatter camp in Johannesburg yesterday. Almost 2 billion people worldwide do not have access to electricity and rely on natural energy sources, such as wood or fossil fuels, to cook and provide heat.