Climate Talks Push Ahead in Poland Amid Credit Crunch

By Alex Morales and Jeremy van Loon

Oct. 13 (Bloomberg) -- Environment ministers from 40 nations met today in Warsaw to lay the groundwork for new climate-change regulations that may raise costs for polluting industries such as power generation and transportation.

Attempts to reach an agreement on limits for carbon-dioxide emissions at United Nations-sponsored talks in December face their biggest hurdle in the credit crisis that's pushing the world economy toward recession, said Astrid Klug, Germany's deputy environment minister.

``We have to make sure that the financial crisis does not hinder climate-change efforts,'' Klug said today in an interview in Berlin. ``This is critical because it's the major threat'' to the negotiations, she added.

Governments in Europe and the U.S. have stepped in to bail out banks, trying to protect the global economy from the biggest financial turmoil since the Great Depression. Stock indexes in the U.S. last week slid the most since 1914.

Environmental ministers meeting through tomorrow in Warsaw will discuss progress made since the UN conference in Bali last December and priorities for one in Poznan, Poland, this December. Aiming to curb CO2 output that add to global warming, the negotiators are seeking to conclude an accord between 192 nations by a December 2009 UN conference planned in Copenhagen.

Countries must ``keep the momentum'' to forge new rules to slow global warming and adopt cleaner technologies that may create millions of jobs, Danish Climate and Energy Minister Connie Hedegaard said.


`Lower Carbon World'

``The financial crisis is not working against this agenda,'' Hedegaard said in an Oct. 10 interview from Luxembourg. ``On the contrary, to take the climate and energy challenges seriously will be one of the ways we can make this shift into a lower carbon world and that will benefit our situation.''

The European Union's 27 members currently are hammering out a climate and energy package that includes a target of cutting emissions of global-warming gases by 20 percent by 2020. Hedegaard said she expected countries to work through objections to the draft law, including opposition by Poland to provisions on auctioning emissions credits, or permits that allow companies such as utilities to emit specific amounts of greenhouse gases.

``It would be difficult for governments to say right now `We're just going to forget about climate change because we have a big financial crisis,''' said Trevor Sikorski, a carbon analyst at Barclays Capital in London. ``One crisis doesn't stop climate change from creating yet another global crisis we'd have to deal with.''

German Target

Germany aims to help reach an accord on the European carbon- trading system after 2012, said Michael Schroeren, a spokesman for the environment ministry.

In that year emissions limits expire for Germany and most other developing countries under the 1997 Kyoto treaty, leaving a void for addressing man-made greenhouse gases.

A United Nations panel said last year it would cost as much as 3 percent of economic output to keep the concentration of greenhouse gases in the atmosphere at current levels in 2030. Tools include investing in renewable energy, making buildings and vehicles more energy efficient and developing technology that captures polluting gases from plants and pumps them underground.

To contact the reporter on this story: Alex Morales in London at amorales2@bloomberg.netJeremy van Loon in Berlin at jvanloon@bloomberg.net