Climate fight hit by global slowdown

By Jeremy Lovell and Gerard Wynn - Analysis

LONDON (Reuters) - The fight against global warming is in danger of being downgraded on more urgent fears over energy security, heightened by a Russian war with Georgia, and a global economic slowdown.

Added to the mix -- politicians are faced with a rising clamor of complaints from voters over record fuel bills, and racing gas and oil prices have sparked new interest in high-carbon coal as well as cleaner alternatives.

"A few years ago it was all about climate change. Now energy security has come up too. The problems arise when the two come into conflict," said Michael Grubb, chief economist at the Carbon Trust think-tank.

Ensuring energy security can clash with the fight against climate change. In particular, the cheapest, most available energy source is coal, which also emits the most greenhouse gases when burned to generate electricity.

The sight two weeks ago of Russian tanks rolling into Georgia, a key energy transit route to Western Europe, has raised anxieties about Europe's dependence on Russia for a quarter of its natural gas and thrown a spotlight on alternatives such as coal, wind and nuclear.

Poland said last week that the Russia-Georgia dispute had made gas a less attractive source of electricity.

"The key issues are now defined by what are coherent responses to these twin concerns," said Grubb. "Where there are conflicts it would be dumb to do something which is entirely one at the expense of the other. But there are signs of a drift in that direction," he told Reuters.

That shift has alarmed environmentalists who have also accused European Union lawmakers of weakening emissions curbs from cars and planes.

"There is clear evidence of backsliding. It is our job to make sure they don't. This is no time for short-term expediency," said WWF's UK chief executive David Nussbaum.

Presidential nominee Barack Obama on Thursday promised to invest $150 billion over the next decade to develop affordable, renewable energy sources, touting that as a long-term energy solution rather than new offshore oil drilling.

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Climate policies add to the cost of producing electricity, through taxes or penalties on carbon emissions, and guaranteed higher prices for more expensive solar and wind power.

Utilities pass these costs on to consumers. Industry and household fuel bills are already at record levels as a result of racing oil prices.

The trick is to balance the three issues of climate change, energy security and fuel poverty, said Welsh socialist MEP Eluned Morgan, who is guiding legislation to liberalize EU power markets through the European Parliament.

"Until very recently, climate change has been top of the agenda, but with issues in Georgia and increasing energy prices due to increased global demand, security of supply will come more to the forefront," she said.