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At climate talks, UN calls fossil fuels 'high risk' investment

Falling oil prices show the “high risk” of fossil fuel investments compared with renewable energies, the UN’s climate chief said on Monday at the start of 190-nation talks on a deal to slow global warming.

The Dec 1-12 meeting in Lima opened with hopes that a UN deal to slow climate change is in reach for 2015, helped by goals set by China, the United States and the European Union to cut greenhouse emissions, mainly from burning fossil fuels.

Christiana Figueres, head of the UN’s Climate Change Secretariat, dismissed suggestions that a tumble in the price of oil to a five-year low on Monday could brake hopes for a shift to renewable energies as a cornerstone of the climate deal.

Oil price volatility “is exactly one of the main reasons why we must move to renewable energy which has a completely predictable cost of zero for fuel” once wind turbines or solar panels were built, she told a news conference.

“We are seeing more and more the realization that investment in fossil fuel is actually a high risk, is getting more and more risky,” she said, welcoming a decision by Germany’s top utility E.ON to spin off power plants to focus on renewable energy and power grids.

Still, other experts said the oil price fall could slow some investments in renewables and may make fossil fuel exporters such as Russia and Saudi Arabia reluctant to make concessions at the climate talks, fearing they could undermine their earnings.

“It’s hard to tell what the total net impact will be here,” Alden Meyer, of the Union of Concerned Scientists, said after Brent crude fell as low as $67.53 a barrel, its lowest level since October 2009, before rebounding to settle at $72.54.

Delegates in Lima are due to work out elements of a deal due to be agreed at a UN summit in Paris next year as part of a UN goal to limit average world temperature rises to 2 degrees (3.6 Fahrenheit) above pre-industrial times. 

Coral reefs

Temperatures have already risen by about 0.9 C (1.5F) and a UN panel of climate scientists says there are risks of irreversible impacts, ranging from damage to coral reefs to a meltdown of Greenland’s ice that would raise sea levels.

“The window for action is rapidly closing,” Rajendra Pachauri, head of the UN’s Intergovernmental Panel on Climate Change, told delegates, warning of worsening disruptions to food and water supplies.

His panel says it is 95 percent probable that man-made emissions are the main cause of warming. And 2014 may eclipse 2010 as the warmest year on record.

The talks have been boosted after the United States last month agreed to cut emissions by 26 to 28 per cent below 2005 levels and China agreed to set a cap on its soaring emissions by around 2030.

The European Union also aims to cut emissions by 40 per cent below 1990 levels. That means that nations accounting for more than half of world emissions have set already goals.

“There is probably more of an opportunity here than there has been in a very long time,” US Climate Envoy Todd Stern told a briefing in Washington.

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