UN Climate Change Talks: Fossil Fuel is 'High Risk Investment'

Dec 02, 2014 08:34 AM EST | Matt Mercuro

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A drop in oil prices shows the "high risk" of fossil fuel investments compared with renewable energies, the U.N.'s climate chief said on Monday at the beginning of 190-nation talks on a deal to slow global warming.

The Dec. 1-12 meeting in Lima opened with hopes that a U.N. deal to slow climate change is a possibility for 2015, thanks to goals set by China, the United States and the European Union to cut greenhouse emissions, according to Reuters.

Christiana Figueres, head of the U.N.'s Climate Change Secretariat, nixed the idea that a drop in the price of oil to a five-year low on Dec. 1 could brake hopes for a shift to renewable energies as a basis of the climate deal.

Oil price unpredictability "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 made, Figueres said during a news conference, according to Reuters.

"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, adding that a decision by Germany's top utility E.ON to spin off power plants to focus on renewable energy and power grids would be a good thing.

Other experts believe that the oil price fall could slow some investments in renewables and may make fossil fuel exporters, like Russia and Saudi Arabia, unwilling to make concessions at the climate meetings.

"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, according to Reuters.

Delegates in Lima are set to figure out elements of a deal due to be agreed at a U.N. summit in Paris in 2015 as part of a U.N. goal to limit average world temperature rises to 2 degrees above pre-industrial times.

Temperatures have already increased by around 0.9 C (1.5F) and a U.N. panel of climate scientists says there are risks of irreversible impacts that would raise sea levels.

"The window for action is rapidly closing," Rajendra Pachauri, head of the U.N.'s Intergovernmental Panel on Climate Change said during the meeting, warning of worsening disruptions to food and water supplies, according to Reuters.

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