December 4, 2010 / 9:35 PM / 9 years ago

Business urge government action on energy efficiency

* Unclear policies, unfavorable taxes hinder investments

* Expected global temperature rise adds urgency

* Efficiency most cost-effective way to cut CO2 emissions

CANCUN, Mexico, Dec 4 (Reuters) - Governments are missing out on an easy opportunity to cut greenhouse gas emissions by not legislating clear energy-efficiency targets, corporate executives said on Saturday.

Reducing energy consumption through more efficient buildings, power plants and vehicles is still the most cost-effective way to reduce greenhouse gas emissions, but projects are often hampered by unclear policies from governments, said speakers at a business forum on the sidelines of the U.N. climate conference.

“Solar may be sexy but energy efficiency is the gift that keeps on giving,” said Adam Muellerweiss, commercial director of energy and climate change for Dow Chemical Co (DOW.N).

Energy efficiency advocates say that up to half the reduction in greenhouse gas emissions recommended by scientists to avoid a sharp increase in global average temperatures can be accomplished through efficiency measures.

Delegates from 194 countries are in Cancun trying to advance the global agenda to tackle climate change. But with many thorny issues expected to be left unresolved, efficiency advocates are urging individual governments to act.

“The building industry holds the greatest, least capital cost (greenhouse gas) abatement opportunity today,” said Jane Henley of the World Green Building Council.

Carbon emissions from buildings are projected nearly to double from their 1990 levels by 2020 without policy changes, according to the Intergovernmental Panel on Climate Change.

Clearer targets on efficiency would help businesses make decisions, said Clay Nessler, vice president of global energy for Johnson Controls (JCI.N).

He added that many managers were reluctant to invest in efficiency projects because of uncertainty over returns and a lack of capital.

The Milwaukee, Wisconsin-based company estimates that rising global temperatures in coming decades will boost cooling costs by 20 to 30 percent without spending to retrofit existing buildings, most of which will still be in use in 2030.

Opportunities for significant savings from efficiency are not only in the developed world. Africa and India together use 500 million barrels of oil a year for lighting, according to Dutch electronics group Philips (PHG.AS).

The United Nations called last week for a global phase-out of incandescent lightbulbs as part of broader efforts to fight climate change, saying that despite the higher upfront cost of high-efficiency lighting, the overall cost of modern lighting is cheaper. (Reporting by Robert Campbell; Editing by Peter Cooney)

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