Merkel says U.N. must lead climate change efforts

BERLIN (Reuters) - German Chancellor Angela Merkel said it was "non-negotiable" that the United Nations should take the lead in global efforts to combat climate change, two days after U.S. President George W. Bush laid out his own strategy.

Merkel, who hosts a summit of Group of Eight leaders on June 6-8, denied Bush's plans were an affront to Germany, whose ambitions for a breakthrough on fighting climate change during its G8 presidency this year look doomed.

Bush's climate strategy rejects the European approach, which favors mandatory emissions caps and carbon trading. He also looked beyond the G8 summit of rich nations by setting a deadline of the end of 2008 for a deal between top emitters.

Merkel insisted that the United Nations, not individual nations or groups of nations, should be the key player.

"In a process led by the United Nations, we must create a successor to the Kyoto agreement which ends in 2012," she told Der Spiegel, adding that some additional initiatives from other countries could be useful.

"But it is important that they flow from the United Nations. For me, that is non-negotiable."

Merkel wants next week's G8 summit to lay the groundwork for an extension and strengthening of the Kyoto Protocol before a U.N. conference in Bali, Indonesia, in December.

Bush has shunned U.N. efforts so far and his call for a deal on cuts among 15 top emitters led by the United States, China, Russia and India angered critics who said he was seeking to bypass the world body.

Bush has long been at loggerheads with Europe over climate change and he refused to implement the Kyoto Protocol, which is backed by 35 nations, saying it would cost U.S. jobs and excluded developing countries.

The Protocol obliges an average cut in emissions of five percent below 1990 levels by 2008-2012.

Even before Bush announced his new strategy, the United States had blocked key parts of Germany's draft agreement.

Merkel wanted leaders to commit to curb the rise in average temperatures to two degrees Celsius this century and cut global emissions by 50 percent below 1990 levels by 2050 but last week U.S. officials scribbled objections in red ink over the draft.

The U.S. comments described "fundamental opposition to the German position".

Merkel vowed to make no compromises that disregarded scientific evidence at the Heiligendamm summit, even if it meant the conclusions ended up being thinner than planned.

"I will not go for a 'lazy compromise' ... I will not get involved in diluting definite scientific findings like those of the U.N.'s Intergovernmental panel on climate change," she said, noting she did not expect to achieve the two degrees Celsius goal.

"Some things will be in the final document, others will not. You will see that there are differing opinions from the fact that some things might not be in the final document."

Merkel was also downbeat about hedge fund reform, another subject leaders will discuss at Heiligendamm.

"I would have liked to see much more transparency and greater ambition for self-regulation to limit the risks for the global financial system," Merkel told Der Spiegel.

Germany wants G8 nations to tighten supervision of hedge funds but has hit objections from the United States and Britain.

Merkel said Germany would keep the matter on the agenda but she did not expect a change of heart from opponents, notably Gordon Brown who is expected to become British prime minister later this month.