US leadership is key to reaching a deal to cut greenhouse gas emissions, it said, noting that all White House challengers are talking up the need to tackle the issue.

Americans go to the polls in November to elect a new president to succeed President George W. Bush, whose Republican administration has refused to ratify the Kyoto Protocol on climate change.

The investment bank said legislation to tackle climate change will be more likely under the new political set-up, allowing the US to play a bigger role in forging a global accord.

"The crucial point now in policy development... is whether the US decides to become active in this area because that in turn would put the heat on China, India and everybody else," said John Llewellyn, senior economic policy advisor at Lehman Brothers.

"I think everybody is waiting on the United States. The day after the US passes legislation, the pressure then for a global framework will become intense.

"Countries like China and India are not blind to this... they know that the pressure will come so it will be quick, extremely quick once the US enacts," he said at a news conference in Singapore.

The United States under Bush has refused to ratify Kyoto, the UN agreement mandating emissions reductions for industrialised nations through 2012, because it does not cover developing nations.

Wrangling between developed nations led by the United States and developing countries such as China threatens to hobble UN-led efforts to negotiate a successor treaty.

Washington wants developing states to make firm commitments on cutting gas emissions but they say they need to focus on economic growth to haul more people out of poverty.

Theodore Roosevelt IV, chairman of the council for climate change at Lehman Brothers, said there are five climate change bills in the US Senate and any one of them could result in a substantial cut in US emissions.

And new legislation would signal Washington's resolve to take the lead in reaching a global pact.

Roosevelt expects the US Congress to pass legislation by 2010.

He also said Republican presidential candidate John McCain and his Democratic rivals Barack Obama and Hillary Clinton have all indicated a different approach from Bush on climate change.

With any one of the three becoming president, "the United States will recommit to engage in (the) international forum, which has not been a hallmark of the current administration," Roosevelt said.

Parallels have been drawn with Australia, which had refused to ratify Kyoto under prime minister John Howard.

Howard's successor Kevin Rudd ratified the treaty in his first official act after being sworn in as leader.

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