LOS ANGELES (Reuters) - A global financial crisis could distract the world's lawmakers and investors from supporting initiatives and technologies to reduce greenhouse gases, delaying what many see as critical efforts to combat climate change.
As the science of global warming becomes more conclusive and calls to address it more widespread, environmental policy experts and business leaders at the Reuters Global Environment Summit said they feared a more visible meltdown -- in the world's financial markets -- would divert attention from an issue that they say also requires immediate action.
"I hope the current market turmoil settles down because this is a distraction," Rajendra Pachauri, chairman of the United Nations Climate Panel, said at the Summit. "When we get to some sort of equilibrium (in the market) we can get on with what needs to be done."
With politicians from Iceland to Japan embroiled in propping up the world's faltering financial system, environmentalists fretted that measures needed to address global warming -- including caps on greenhouse gas emissions and funding for research into new alternative energy technologies -- would be pushed to the bottom of the pile.
"On many political agendas that will unfortunately be among the first things to go," said Monaco's Prince Albert, who has worked to make aggressive greenhouse gas reductions in his principality.
The Global Environment Facility, which uses billions of dollars in government money to tackle ecological problems, fears that the tough economic picture could choke funding.
"We're mindful that our money comes from treasuries around the world, public sector treasuries ... it's a gloomy time," said Robert Dixon, the fund's climate change chief, adding that the crisis reinforces the notion that the private sector, and not governments, should back clean energy technologies.
"It's the private sector that creates things, it's not governments," Dixon said.
That said, however, investors in renewable energy projects such as solar power plants and wind farms are certain to see the cost of funding those plans go up.
"There will be higher borrowing costs and higher returns required (by investors)," said Steven Chan, chief strategy officer of one of the world's top solar panel makers, China-based Suntech Power Holdings Co Ltd (STP.N: Quote, Profile, Research, Stock Buzz).
To help make sure projects get done, Chief Executive Mike Ahearn of First Solar Inc (FSLR.O: Quote, Profile, Research, Stock Buzz) said the U.S. solar company would consider financing them itself.
Less established companies could have the biggest difficulties, said one analyst.
"A lot of the smaller (solar) installers need construction finance and need project finance and the cost of money is really unclear at this point," said Colin Rusch, a renewable energy analyst with Broadpoint Securities. "That is the critical issue."
Silicon Valley entrepreneur Vinod Khosla said that though investors' returns would likely decline, he hoped the financial turmoil would stimulate a flight to what he called "real asset classes" such as energy projects and venture capital.
"I'm hoping we can come back to real things," he said. "That's the optimist in me." Continued...
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