Bush outlines energy plan

US President George Bush has offered businesses incentives to achieve an estimated 4.5% voluntary reduction in greenhouse gas emissions over 10 years.

He also outlined plans to reduce power plant emissions by the "largest amount" in US history.

The president's plan is dramatically lower than the estimated 33% reduction sought by the Kyoto agreement for the United States, the world's largest producer of greenhouse gas emissions.

The Kyoto agreement, which called for the U.S. to reduce greenhouse gas emissions 7% below 1990 levels, required mandatory reductions, whereas the Bush plan would be voluntary.

The president's plan links the reduction of greenhouse gas emissions to economic output, calling for an 18% reduction in greenhouse gas intensity over 10 years. Greenhouse gas intensity is the ratio of greenhouse gas emissions and economic output.

"This new approach is based on the common sense idea that sustainable economic growth is the key to environmental progress -- because it is growth that provides the resources for investment in clean technologies," said Bush in an address at the National Oceanic and Atmospheric Administration in Silver Spring, Maryland.

The president's plan will prevent at least 500 million metric tons of greenhouse gases from being emitted, or the equivalent of 70 million cars being taken off the road, roughly the same projections for the Kyoto agreement.

Bush rejected the Kyoto agreement, which 178 other nations accepted last year, because it exempted developing nations and large polluters such as India. Bush also charged it would harm the US economy -- the White House says Kyoto would ultimately result in the loss of $400bn to the US economy and a loss of 4.9 million jobs.

The president faced tremendous criticism from environmental groups and US allies, including Japan, for rejecting Kyoto.

Bush's plan would cap power plant emissions of nitrogen oxides, sulfur dioxide and mercury at an unspecified level, and allow businesses which fall below the caps to sell credits to larger businesses so those businesses could meet the new guidelines.

The plan also includes $4.5bn in his next year's budget for global climate change programs, a $700m increase over this year's budget, according to the White House.

This money includes the first year of funding for a five year, $4.6bn program for tax credits for businesses pursuing renewable energy sources, the White House said.