Climate change battle could spell new disasters

By Gerard Wynn

LONDON (Reuters) - Rich countries meeting in Germany this week will agree that they need to confront climate change, but unpleasant tradeoffs are already emerging.

Unless properly managed, a rush to reshape the world's economy to arrest climate change could end up trampling the lifestyles of the rich, the livelihoods of the rural poor, and the earth's most vulnerable habitats.

A tequila shortage is perhaps one of the least-expected results of planting lucrative, "climate-friendly" biofuels -- as Mexican farmers set ablaze their fields of cactus-like agave to make way for corn, a feedstock for ethanol. Biofuels are also blamed for raising food prices and destroying forests.

The result of misguided climate policies could be to undermine public support for action and discourage businesses from buying in.

"Definitely there'll be tradeoffs between climate change and the local environment, and with energy security," said Fatih Birol, chief economist at the International Energy Agency (IEA), which advises rich countries.

"We are not in the luxury of being able to choose from hundreds of energy types."

Just how mankind plans to battle climate change is still sketchy, but one buzz word is "scaling up" -- for example by boosting research into and deployment of clean energy technologies like wind and nuclear power and biofuels.

Urgency has been spurred by a series of U.N. climate reports this year confirming threats like desertification, droughts and rising seas and calling for action now to cut the long-term cost.

But evidence is emerging of the repercussions. British charity Christian Aid says Colombian rebel groups are forcing poor people off their land to grow lucrative palm oil for biodiesel, likening it to diamonds financing African wars.

"You could have blood biofuels in the same way as blood diamonds. It's a classic case of exploiting natural resources behind the veil of conflict," said Christian Aid climate policy analyst Andrew Pendleton.

"Unscrupulous private sector operators, rebel groups, are keen to make a fast buck."

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Biofuels already occupy an area equal to all of the arable land in France, says the IEA, and they are blamed for raising the cost of corn, sugar and other foods they compete with for land.

But negative repercussions are hard to prove.

A hike in the price of tortillas, a Mexican staple, was blamed on biofuels and sparked riots, but may have more to do with the monopoly power of dominant tortilla producers, says Annie Dufey, research associate at Britain's International Institute for Environment and Development (IIED).