No industry is believed to have opened its wallet wider for the $13m spent by the Global Climate Coalition, a US industrial lobby group, than Detroit.

General Motors, Ford and Chrysler have revved faster than a V8 engine to alert the public to the risks of agreeing legal limits on greenhouse gas emissions at the Kyoto conference on climate change this week.

The "Big Three" carmakers have argued binding commitments would be tantamount to inviting recession and exporting jobs. Rather than selling US workers down the river, the carmakers say Washington should spend more on developing new technology.

Improvements to engines mean today's cars are less Polluting than the gas-guzzlers they replaced. Apart from better fuel consumption, reducing the amount of carbon dioxide emissions, modern cars emit-fewer toxic gases, such as carbon monoxide, nitrogen oxides, and, for diesels, particulates.

Detroit can point to promising results from its research. Just weeks before the conference, USCAR, the government-supported industry alliance working on cleaner vehicles, announced progress in developing a virtually "clean" car using a hydrogen-powered fuel cell.

For hardened environmentalists, the news was suspiciously timely. But less ardent greens grudgingly accept that products in the pipeline could significantly reduce, if not altogether eliminate, the car's dirty image.

Louis Schweitzer, chairman of Renault and president of the European Automobile Manufacturers' Association, reckons clean electric vehicles, with batteries offering "reasonable range", could be on sale by about 2005. Five years later, fuel cell vehicles -- which, at best, emit only water vapour -- will be widely available. 1.

Mr Schweitzer predicts the coming decade will also see hybrid cars, combining conventional internal combustion engines with electric motors. And there is even scope to cut pollution from current petrol and diesel engine technology significantly by 2005, he reckons.

Such confidence is not fanciful. This month sees the debut of Toyota's new Prius saloon in Japan. Driven by a fuel efficient and low emission 1.5 litre petrol engine combined with a 30KW electric motor, the world's first commercial hybrid car achieves ground-breaking fuel economy without compromising either performance or packaging

The problem is price. The Prius costs Y2.15m ($16,610) -- nearly twice as much as a similarly sized conventional car. To make it palatable to consumers, Toyota has subsidised even that price tag as the Prius costs appreciably more to build. The Company hopes costs will fall if demand pushes output beyond an initial 1,000 cars a month.

Yet the Prius sums up the dilemma for manufacturers and environmentalists alike in cutting emissions. While the political will and the technology to develop cleaner products exists, only When greener new cars can offer comparable performance to existing vehicles at competitive prices will people buy them.

That begs the question of what policymakers should do to stimulate change. Many of the vehicles being developed have been prompted by threatened or perceived new legislation to limit car use.

In Europe, Mercedes-Benz and Switzerland's SMH watches group, best known for the Swatch, have co-operated to produce the Smart.

The tiny two-seater, designed primarily for urban use, is intended as a response to possible restrictions on car use in congested cities. With unprecedented fuel economy and very low emissions from its 660cc petrol engine, the Smart's backers believe it corresponds with the more eco-sensitive mood of today.

Further ahead, the focus is on fuel cells. Mercedes-Benz has put its money where its mouth by buying 25 per cent of Ballard Power Systems, the Canadian company believed to be at the forefront of fuel cell technology.

Mercedes-Benz hopes to have a hydrogen-powered version of its A Class hatchback on sale before the end of the next decade.

In the US, the pace has usually been set by California's Air Resources Board. Faced with the threat of serious pollution in the state's big cities -- notably Los Angeles -- the CARB has for years wielded the big stick of legislation to push manufacturers into developing cleaner products.

The size and importance of the Californian market mean the CARBB's writ has loomed large. Honda, which should launch its own hybrid next year, has developed a prototype "zero level emissions vehicle" which can achieve one tenth" of the most draconian future emission targets being set by the state, says Nobuhiko Kawamoto, president,

But even John Dunlap, the CARB's soft-spoken head, has to reverse at times. Mr Dunlap, who made himself the scourge of the motor industry by demanding highly ambitious targets for non-polluting cars, was last year forced to backtrack after lobbying from Detroit prompted the board to postpone a deadline that a fixed proportion of future cars sold in California should be wholly non-polluting.

One reason for the second thoughts was the motor industry's argument that forcing new technology oil to the market before consumers were ready could be counter-productive.

The reason was that battery power, the most immediately available clean power source, has proved one of the industry's biggest disappointments. progress has been limited by the restricted capacity of traditional lead-acid batteries to store electric charge. Batteries made of other compounds can hold more, but are prohibitively expensive.  (norb: not so! check the Vanadium Battery!)

Such limitations explain the slow progress of GMs' EV1, the world's first battery-powered production car. Demand in Arizona and California, where the EV1 has been available for almost a year, has been more sluggish than the golf buggies to which the EV1 is sometimes unfairly compared.

The carmakers argued California's rules would have forced them to build thousands of electric cars, based on existing technology, which would have been unattractive to motorists and might have blighted the image of environmental cars for ever.

GM is about to fit new higher capacity nickel metal-hydride batteries to double the EVl's range. It might never have developed the car without the legistators' stick. But then again, its shareholders would have revolted at an estimated $1bn project without the carrot of potentially lucrative sales at the end of it.

This is the first of a series of articles on issues related to climate change negotiations at the Kyoto conference.

Financial Times 2dec97