By Andrew Stern

CHICAGO, Sept 19 (Reuters) - Moves by China, India and other developing countries to join the effort to cut greenhouse gas emissions have lifted a barrier to an expanded U.S. role in the process, the top U.N. climate official said on Wednesday.

President George W. Bush refused to approve the 1997 Kyoto Protocol that set targets for emissions reductions in part because developing countries were not included.

But the situation has changed over the past year, said Yvo de Boer, head of the U.N.'s Framework Convention on Climate Change.

Addressing two Chicago business groups, de Boer cited $25 billion worth of investments in developing countries that will ultimately qualify as emissions credits. Those credits can then be sold into the expanding but still decentralized carbon trading market.

"I think there is a growing sense that large developing countries like China, India, Brazil, Mexico, South Africa, are willing to engage further in the next (negotiating) round," he said in an interview at the Chicago Climate Exchange.

"I'm more and more confident about that. Part of the challenge is to differentiate a little bit more from the current black and white world -- some countries have binding targets and some don't -- towards a more varied approach that allows you to tailor different kinds of commitments," he said.

"Perhaps you could think of quantified targets for some, relative targets to others, bringing certain parts of the economy under cap and trade, a fourth might be an aspirational goal to, say, have 'X' percent renewables in place, so you have a more varied approach," he added.

Cap and trade is the market-based approach favored by the Chicago Climate Exchange, in which its members agree to gradually reduce their emissions and can either buy or sell credits as needed to meet their targets.

De Boer urged industrialized nations including the United States to take a leading role in upcoming climate talks in December in Bali, Indonesia.

"On the short road to Bali, I think we have a unique moment in time: the scientific message we've been given is clear, we know we have the tools at our disposal to address this problem in an affordable way, the only minor little detail we're lacking at the moment is political will. This is the time to show it," he said.

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