Insider : High Noon in Houston? White House Fears Confrontation : Summit allies may force showdown with President Bush over global environment.

The world economy usually leads the agenda when the leaders of the world’s seven largest industrial nations hold their annual summit. But when President Bush and his six counterparts gather in Houston on July 9, U.S. strategists are worried that the others will gang up on him over another issue--the global environment.

Leaders of Western European countries, Japan and Canada already have served notice that they consider the environment the summit’s most important topic and plan to press for international initiatives on a host of issues, from global warming to ocean pollution.

But the White House is firmly resisting any dramatic new moves, arguing that there is still not enough evidence that these problems are genuine or that they merit the massive spending that would be required to deal with them seriously.

The rigid U.S. stance comes on orders from White House Chief of Staff John H. Sununu and Budget Director Richard G. Darman, who have drawn a similar line in response to demands by domestic environmentalists that the Administration move more aggressively on these issues.

The White House position has upset several other top Administration policy-makers, who worry that Bush could be isolated at Houston and dealt an embarrassing setback--particularly on efforts to reduce carbon dioxide emissions, which are thought to contribute to global warming.

Indeed, the President may have lost his last ally last week, when British Prime Minister Margaret Thatcher broke with the Administration’s go-slow policies on carbon dioxide emissions and agreed to join in global efforts to stabilize them by 2005.

“The Europeans have been very specific on what they’d like to see the summit accomplish,” said one high-ranking U.S. official. “This isn’t something that it will be easy for the U.S. to brush aside. These folks regard the issue as important, and they’re unlikely to back off.”

Besides Bush, the summit leaders are Britain’s Thatcher, West German Chancellor Helmut Kohl, Japanese Prime Minister Toshiki Kaifu, French President Francois Mitterrand, Italian Premier Giulio Andreotti and Canadian Prime Minister Brian Mulroney.

In addition to tackling environmental issues, the summiteers are also expected to intensify the pressure to complete the current global trade-liberalization talks and to consider new moves to help the Soviet Union and the emerging democracies in Eastern Europe.

But strategists concede that the biggest potential for a U.S. rift with its allies is over the environment. “If the summit is to have any credibility on this issue, then there has to be something more responsive than what Washington is willing to back,” a foreign official said.

If the Bush Administration is isolated at the Houston summit, it would mark the first time in recent memory that the other industrial countries have dealt a major setback to the United States on an initiative that U.S. leaders vigorously opposed.

The summit leaders will take no votes and adopt no resolutions. But they can mobilize the pressure of world opinion on the United States if they can show that Bush alone resisted the sort of worldwide cooperation that is thought necessary to combat some of the globe’s environmental woes.

Highest on the European leaders’ environmental priority list is a declaration of support for the effort to head off global climate change by cracking down on carbon-dioxide emissions, in preparation for signing an international protocol in 1992.

Summit participants also hope to gain support for a new World Bank plan that would set up a special lending pool to help poor countries tackle their environmental problems.

And they want Washington to back the creation of an international fund designed to help less-developed countries pay for altering their factories and equipment so that they can phase out the use of chlorofluorocarbons (CFCs), which deplete the atmosphere’s protective ozone layer.

But the Bush Administration has expressed opposition to each of these proposals.

The President singled out the plan for immediate action to cope with global climate change at a White House-sponsored international conference earlier this year, saying the need had not yet been proved beyond doubt. The Treasury Department recently refused to back the World Bank plan. And U.S. negotiators, at a meeting in Geneva in mid-May, declined to join a new multilateral fund for helping developing countries rid themselves of CFCs. Washington’s share would have been $25 million.

The Europeans will not be the only ones pressuring the Administration. U.S. environmental groups have set up a summit-nations accountability project designed to spotlight the Houston meeting and keep up the pressure for more-sweeping change.