By Alister Doyle
    Reuters

    Tuesday 28 August 2007

    Vienna - Energy efficiency for power plants, cars or homes is the easiest way to slow global warming in a long-term investment shift that will cost hundreds of billions of dollars, the United Nations said on Tuesday.

    A U.N. report about climate investments, outlined to a meeting in Vienna of 1,000 delegates from 158 nations, also said emissions of greenhouse gases could be curbed more cheaply in developing nations than in rich states in coming decades.

    The cash needed to return rising emissions, mainly from burning fossil fuels, to current levels by 2030 would amount to 0.3 to 0.5 percent of projected gross domestic product (GDP), or 1.1 to 1.7 percent of global investment flows, in 2030, it said.

    "Energy efficiency is the most promising means to reduce greenhouse gases in the short term," said Yvo de Boer, the head of the U.N. Climate Change Secretariat, presenting the report to the August 27-31 meeting.

    That could mean tougher standards for cars, factories, coal-fired power plants or buildings in using fossil fuels.

    And government policies could encourage people to pick energy efficient light bulbs, for instance, or discourage them from wasting energy by heating empty outdoor terraces.

    The 216-page report was published online last week.

    De Boer said the study could help guide governments, meeting in Austria to discuss a longer-term strategy against global warming beyond the U.N.'s Kyoto Protocol. The protocol binds 35 rich nations to cap emissions of greenhouse gases by 2008-12.

    The report estimates that "global additional investment and financial flows of $200 billion-$210 billion will be necessary in 2030 to return greenhouse gas emissions to current levels," including measures for energy supply, forestry and transport.

    The study foresees a shift to renewable energies such as solar and hydropower, and some nuclear power. Environmentalists say that the report lacks ambition and that emissions need to be below current levels by 2030.

    Carbon Markets Expanded

    The report also estimates that investments in helping nations adapt to the impact of climate change would run to tens of billions of dollars in 2030, such as treating more cases of malaria or building dykes to protect beaches from rising seas.

    It said carbon markets would have to be "significantly expanded to address needs for additional investments and financial flows." Companies are now responsible for about 60 percent of global investments.

    Harlan Watson, the chief U.S. climate negotiator, said it was unclear how governments could mobilize such vast investments by the private sector. "That's a key question," he said.

    The report fills in some gaps in a wider picture given by previous studies such as one by former World Bank chief economist Nicholas Stern saying it would be cheaper to confront climate change now than wait to combat the consequences.

    U.N. reports this year have also projected that warming will bring more heat waves, droughts, disease and rising seas.

    De Boer said investments to developing nations should rise.

    "The bulk of cost-effective opportunities are in developing countries," he said, adding that did not mean that rich nations should seek only to invest abroad rather than at home.

    "More than half the energy investment needed is in developing countries," he said. China is opening coal-fired power plants at a rate of two per week to feed its growing economy and cleaner technology would help the climate.