INDONESIA: December 11, 2007


JIMBARAN, Indonesia - Forty nations held unprecedented talks about ways to slow global warming without derailing world economic growth on the margins of UN climate talks in Bali on Monday.


Deputy finance ministers met on the fringes of Dec. 3-14 UN climate talks where more than 10,000 delegates are trying to lay the groundwork for a broader treaty to succeed the Kyoto Protocol global warming pact beyond 2012.

"Having this meeting...having the finance ministers meeting..itself is a breakthrough," Indonesian Finance Minister Sri Mulyani Indrawati said. The meeting will prepare for talks by about 20 finance ministers in Bali on Tuesday.

Trade ministers also met at the weekend, the first time the annual UN climate talks have expanded beyond environment ministers in a sign that combating climate change will require big economic shifts in coming decades.

The trade ministers failed to ease splits between Brazil and the United States over "green" exports.

David McCormick, US Under Secretary for International Affairs, said the talks were a crucial first step.

"The very start of this conversation among finance ministers is a real step forward and as we think about the agenda for our treasury in the coming years, we think that this issue, the environment, will be a central issue."

Gabriel Kuhne, deputy director of Germany's Finance Ministry said the talks did not aim to decide anything. He said he was told the main purpose was to convince sceptical finance officials of the need to act swiftly to tackle global warming.

"It is a huge problem. We have to take action immediately, not in 20 years. The window of opportunity will close in about 10 years, and so we are convinced that action has to be taken."

The UN Climate Panel, which will collect the Nobel Peace Prize on Monday in Oslo along former US Vice President Al Gore, has said that the strictest measures to offset warming will slow annual world growth by 0.12 percentage point at most.

"The role of the finance ministers is to lead this discussion so that we have wider policy options," Indrawati said, referring to taxes or incentives for green technologies such as wind, solar power or "clean coal".


ENERGY

Karim Alloui, a vice president of the Islamic Development Bank, said issues raised in the meeting would have broad implications for lenders because they cut across many industrial sectors such as mining, energy and forestry.

A UN study projected that net annual investments of US$200-$210 billion by 2030 were needed in cleaner areas, such as renewable energies, in a gigantic shift from dirtier fossil fuels.

Funding is expected to come from government budgets and multilateral organisations but a substantial amount would come from the private sector.

Building protective barriers against sea level rise around 50 of the coral islands making up the Maldives in the Indian Ocean alone could cost US$1.5 billion, according to Angus Friday, head of a group representing small island states.

The 190-nation climate talks are seeking to agree on the ground rules for launching two years of negotiations on a broader climate change pact involving all nations to succeed or replace the Kyoto Protocol from Jan. 1, 2013.

-- For Reuters latest environment blogs click on:

http://blogs.reuters.com/environment/ (With extra reporting by Emma Graham-Harrison and Rob Taylor in Canberra; editing by David Fogarty and Alister Doyle)


Story by Gde Anugrah Arka


REUTERS NEWS SERVICE