$750 billion green investment urged by UN

OSLO, NORWAY - Investments of $750 billion could create a "Green New Deal" to revive the world economy and protect the environment, perhaps aided by a tax on oil, the head of the U.N. environment agency said.

Achim Steiner said spending should focus on five environmental sectors including improved energy efficiency for buildings and solar or wind power to create jobs, curb poverty and fight climate change.

"The opportunity must not be lost," Steiner, head of the U.N. Environment Program (UNEP), told Reuters of a UNEP study that will be put to world leaders meeting in London on April 2 to work out how to spur the ailing economy.

The UNEP report said investments of one percent of global gross domestic product, or about $750 billion, could bankroll a "Global Green New Deal" inspired by the "New Deal" of U.S. President Franklin D. Roosevelt that helped end the depression of the 1930s.

Investments should be split between more energy efficient buildings, renewable energies, better transport, improved agriculture and measures to safeguard nature — such as fresh water, forests or coral reefs, it said.

The study adds details of spending after UNEP called for a Green New Deal late last year.

Steiner also said that the world urgently needed funds to jump start a U.N. deal to fight global warming, due to be agreed in Copenhagen in December to succeed the U.N.'s Kyoto Protocol beyond 2012.

He floated the possibility of taxing oil in rich nations of the Organization for Economic Cooperation and Development (OECD) to help a new pact become the cornerstone of a greener economy.

"If, for argument's sake, you were to put a five-year levy in OECD countries of $5 a barrel, you would generate $100 billion per annum. It translates into roughly 3 cents per liter," he said.

"It would be almost, if not totally, unnoticed by the consumer," he said, especially since oil prices have fallen from more than $140 a barrel at mid-2008 peaks to about $40.

A barrel of oil contains 158 liters and OECD consumption is about 20 billion barrels a year, he said. "This is just one example, there may be many others," of funding, he said.

"I am concerned about the prospect of a meaningful deal in Copenhagen if there is not a significant financial package on the table," he said. Cash would encourage poor nations to step up actions to curb rising greenhouse gas emissions.

"The argument that we cannot afford this does not, on any serious analysis, hold much water — especially given the cost to the global economy of failure to act on climate change," he said.

Carbon markets, which could also be a source of funds to help fight climate change, were unlikely to contribute enough cash in early years of a new climate deal, he said.

Steiner said there were promising signs that economic stimulus packages by many nations, ranging from the United States to China, were being tailored to help a shift toward greener growth and away from dependence on fossil fuels.

The U.N. Climate Panel says that greenhouse gases from burning fossil fuels are a prime cause of warming that will cause more heatwaves, droughts, rising sea levels and more powerful storms.