Indeed, the second day of this year's G8 meeting in Italy, amid the symbolic but only half-repaired ruins of the earthquake that hit the small town of Aquila, will be a kind of G20 meeting as other countries have been invited to attend a special session.

But therein lies the problem, because it is becoming increasingly clear that the G20 will find it hugely difficult to forge the kind of consensus that the advanced industrial nations of the G7 -- all of them democracies and American allies -- used to be able to build.

In recent days, officials of the four biggest emerging economies, known as the BRICs (for Brazil, Russia, India and China) have all voiced complaints about the current role of the dollar as the world's reserve currency and as the keystone of global finance. Aides to Russian President Dmitry Medvedev said last week that at the G8 meeting Medvedev would repeat his proposal for a mix of regional currencies to replace the dollar.

"The major part of Indian reserves is in dollars -- that is something that's a problem for us," Suresh Tendulkar, chairman of India's Economic Advisory Council, said last week, adding to the chorus of criticism of the dollar's stewardship by successive American governments. India currently holds about $240 billion in its reserves, whereas China holds dollar securities worth eight times as much.

The People's Bank of China suggested last week that the International Monetary Fund should manage more of its members' currency reserves, and other Chinese officials have suggested the new reserve currency should be based on the IMF's Special Drawing Rights. Whereas most countries hold an average 65 percent of their reserves in dollars, with the rest in euros, pounds and yen, less than half of the basket of currencies in SDRs is made of dollars.

So if a shift to a system based on SDRs were to take place, the world's central banks would have to start selling dollars in order to match the mixed basket of currencies in the SDR. Unless carefully timed and managed, that could mean a dramatic sell-off of the U.S. currency and a sharp fall in its price -- which would mean a severe loss for all countries holding dollars. China and the other BRIC countries can hardly want that, so many financial analysts suspect that political rhetoric rather than real policy intent is driving the current criticism of U.S. financial policy.

Why would such political rhetoric be useful? The answer may lie in the other big international issue that is to be discussed at the G8 meeting, and is likely also to be a major issue for the next formal G20 summit in Pittsburgh later this year. That issue is climate change: specifically, what targets should be set internationally for a reduction in carbon dioxide and other greenhouse gas emissions.

Here again, the interests of the BRIC countries diverge significantly from those of the United States and its G7 partners. The G7 countries, whose years of breakneck growth and massive pollution are behind them, argue that everybody should set clear, firm and binding targets for CO2 reduction. China, India and the other developing countries argue, reasonably enough, that they were not responsible for the vast bulk of pollution in the 19th and 20th centuries, and so the G7 countries ought to do the majority of the cuts in emissions. And moreover, the G7 countries should donate to the emergent economies whatever energy saving and low emissions technology they have.

Environmentalists claim that the fate of the planet may hinge on the outcome of this argument between the developing countries and those already developed.

Sweden, which has just taken over the EU's chairmanship for the next six months, and thus will represent the world's biggest economic bloc at this December's climate-change negotiations, has just warned that there are few prospects of concluding a deal unless China, India and Brazil make significant cuts in carbon emissions. Lars-Erik Liljelund, special climate-change adviser to the Swedish government, warned last week that emissions cuts from the United States and European Union alone will not be sufficient to meet the U.N. goal of cutting at least 25 percent of emission from 1990 levels.

"The problem at the moment is that if you take the contributions made so far by the United States, the European Union and Japan then we don't come up to that minus 25 percent," Liljelund told reporters. He warned of "an environmental crisis" unless China, India, South Africa and Brazil join the cuts, although they were exempt under the 1997 Kyoto Protocol climate-change pact, which runs out in 2012.

To force the issue, the new emissions bill passed last month by the U.S. House of Representatives calls for tariffs on the exports of countries that do not cut their carbon emissions, to the outrage of emerging countries. The EU is weighing similar legislation.

"It has always been China's position that the international society should fight climate change together, but the proposal of some developed countries to slap a carbon tariff on some imported products violates the WTO's basic principles and is trade protectionism in the disguise of environmental protection," said Yao Jian, spokesman for China's Ministry of Commerce.

Last week, Jairam Ramesh, the Indian environment minister, described carbon tariffs as "pernicious" and flatly rejected the idea of negotiating climate change at the WTO.

In short, the battle lines are being drawn for a direct clash of interests between the G7 countries and the emergent economies of the G20.

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