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Stung by the ferocity of the global reaction to its decision in March to ditch the binding Kyoto Protocol on climate change, the Bush administration has promised to show leadership on climate change and come up with an alternative plan.

Details remain sketchy, but it seems the main thrust will be more scientific research into the causes of climate change and a focus on technological solutions. Mandatory targets, the sting in the tail of the Kyoto Protocol - indeed any targets at all - will not be a feature.

The US proposal would effectively take the world back a decade to 1992 when developed nations made a commitment to voluntarily hold their emissions at 1990 levels under the parent treaty of the Kyoto Protocol, the United Nations Framework Convention on Climate Change.

The dismal failure of that arrangement to contain soaring emissions led to negotiations for the protocol to become a legally binding agreement enforcing mandatory, tougher reduction targets.

Not even US allies such as Japan, Australia and Canada have been impressed by the latest offer from the largest global polluter - with 4 per cent of global population, the US accounts for 25 per cent of global greenhouse emissions.

After so much pain to get international consensus on the protocol, there is reluctance to start the process all over again.

While next week's meeting in Bonn was, in theory, supposed to be about finalising the ground rules for implementing the Kyoto Protocol, in practice it will be a diplomatic salvage operation led largely by Australia and Japan. The hurdles in finding common ground between the US and Europe are formidable.

Despite President Bush initially promising European leaders he would not interfere with their efforts to bring the protocol into legal effect, the US has been lobbying hard (but so far unsuccessfully) to persuade countries such as Japan to also declare the protocol dead.

In climate talks in the Netherlands in late June, European Union officials accused the US delegation of staying in the process for the purpose only of obstructing progress by the rest of the world.

The EU, on the other hand, has been fighting a rearguard battle to persuade other developed nations to ignore the pressure from the Americans, stick with the protocol for the greater good of the planet and work to bring it into force as soon as possible.

With the major powers polarised, Japan, Australia and Canada are emerging as the pivotal countries that will determine the future character of international action on climate change. Their influence derives from the formula for bringing the protocol into legal effect.

This will occur once the agreement is signed by at least 55 countries, including developed nations whose 1990 emissions collectively represent 55 per cent of emissions from the industrialised world. The US accounted for 36.1 per cent of developed nations' emissions in 1990. The European Union, non-EU Europe and New Zealand together account for 49.91 per cent. It means the protocol lives or dies by whether Japan, or Canada and Australia, ratify it.

Both Japan and Australia have made it clear they want more time in the hope of persuading the United States to either rejoin the Kyoto process or come up with something better.

With that goal in mind, Environment Minister Robert Hill said earlier this week that the meeting in Bonn should not be judged a success or failure by whether the deal on Kyoto was struck.

The European Union has also softened its previously hardline stance after getting nowhere in last-minute lobbying last week in Australia and Japan.

The EU environment commissioner, Margot Wallstrom, said Bonn was no longer a firm deadline for agreement on the Kyoto pact. She envisaged, instead, agreement ``not on everything but on parts" of the protocol. ``You can imagine different scenarios for Bonn in order to still be able to say that it was a success."

Time indeed may be just what the US President needs to bring him around, according to Molly Harris Olson, the one-time head of former president Bill Clinton's Council on Sustainable Development and now the director of the Australian business systems consultancy EcoFutures.

Diplomatic progress on climate change might have stalled, but the business world was moving on and that might ultimately prove the circuit-breaker, Olson said. She has just returned from the United States where, she said, oil company Exxon was under enormous consumer pressure over its role in persuading President Bush to ditch Kyoto.

Olson said the talk in business circles was that Exxon would be knocking on the President's door begging him to return to the international fold if the public pressure kept up in the US and Europe.

Meanwhile, other multinationals wielding campaign finance and, therefore, influence over Congress were leading the way with tough internal company greenhouse reduction programs.

For example, the chemical giant DuPont, once a greenhouse sceptic, is now committed to reducing emissions to 65 per cent below 1990 levels by 2010. Similarly, Shell is committed to reducing emissions by 10 per cent by 2002, while BP is committed to 10 per cent reduction by 2010. Both oil companies are investing heavily in alternative energy.

The head of Ford motor company, Bill Ford junior, declared his intention last year to oversee the end of the internal combustion engine in transport.

``If companies who are not radical are doing this, then it can't be that difficult," said Olson of US and Australian Government claims that meeting the national Kyoto targets will be costly for business and economic growth. ``I think these companies would not be making a commitment like that if it was too costly or impossible in the long term ... the politicians will have to follow."

Alan Tate of the Ecos Corporation, which advises companies such as BHP, BP and Bovis Lend Lease on sustainable business practice, said attitudes were changing and there was no better illustration of this than the world's leading chief executive officers voting climate change as the biggest challenge of the coming century at the World Economic Summit in Davos last year.

Corporations were increasingly regarding action on climate not as a burden but a business opportunity, Tate said. Queensland's Stanwell Corporation, one of Australia's major coal-fired power companies, was diversifying its business mix to develop solar and wind so that it could grab the market advantage once consumers could choose their supplier later this year.

``This is a transition period, so even for companies and industries that are the most carbon liable (which would have to be coal-fired power stations), this might not spell disaster. It depends on how you look at it. It can be an enormous business opportunity," Tate said.

Clive Hamilton, of the Australia Institute, said it was nonetheless important that governments acted worldwide. ``Some companies are at the forefront and are anticipating that the world will change and they want to be ahead of the game rather than dragging at the rear," he said.

``So they are investing in alternatives while continuing their traditional activities. They are hedging their bets and getting the public-relations benefits, but the reality is they will only go so far and only be so competitive if governments don't act to bring the laggards on board."

In the meantime, the slow train of climate change just keeps getting closer and closer. There can be no delaying the inevitable and for that reason alone, Hamilton says, the momentum for global action will not diminish. In 1992, President George Bush senior signed on for voluntary emission reduction under the UN Framework Convention on Climate Change with the proviso that the American way of life was ``non-negotiable". Ten years later, his son might like to turn back to clock, but the times have changed.