Forty nations held unprecedented talks about ways to slow global warming without derailing world economic growth on the margins of U.N. climate talks in Bali on Monday.
Deputy finance ministers met on the margins of Dec. 3-14 U.N. climate talks where more than 10,000 delegates are trying to lay the groundwork for a broader treaty to succeed the Kyoto Protocol global warming pact beyond to 2012.
"Having this meeting ... having the finance ministers meeting ... itself is a breakthrough," Indonesian Finance Minister Sri Mulyani Indrawati said. The meeting will prepare for talks by about 20 finance ministers in Bali on Tuesday.
Trade ministers also met at the weekend, the first time the annual U.N. climate talks have expanded beyond environment ministers. The trade ministers failed to ease splits between Brazil and the United States over green exports.
"The role of the finance ministers is to lead this discussion so that we have wider policy options," Indrawati said, referring to taxes or incentives for green technologies such as wind, solar power or "clean coal".
The U.N. Climate Panel, which will collect the Nobel Peace Prize on Monday in Oslo along former U.S. Vice President Al Gore, has said that the strictest measures to offset warming will slow annual world growth by 0.12 percentage point at most.
The panel says the impacts of climate change, such as more storms, droughts, mudslides and rising seas, could be far more damaging unless nations make deep emissions cuts to stabilizes the amount of carbon dioxide and other greenhouse gases in the air.
"We'll talk about the theoretical basis but I don't think we will decide on measures during this finance ministers' meeting," Gabriel Kuehne, deputy director of the German Finance Ministry, said of the two-day talks ending on Tuesday.
A U.N. study projected that net annual investments of $200-$210 billion by 2030 were needed in cleaner areas, such as renewable energies, in a gigantic shift from dirtier fossil fuels.
The 190-nation climate talks are seeking to agree on the ground rules for launching two years of negotiations on a broader climate change pact involving all nations to succeed or replace the Kyoto Protocol from Jan. 1, 2013.
Kyoto only binds 36 industrialized countries to emissions curbs between 2008-2012. But outsider the United States has no binding goals under Kyoto nor do developing nations led by China and India. The talks will also try to set a timetable for an accord by the end of 2009.
"This is the week the world has been waiting for," said Jennifer Morgan of the London-based climate E3G think-tank.
In return for committing to slowing the growth of emissions, developing nations want aid to help them adapt to the rising impacts of climate change.
Building protective barriers against sea level rise around 50 of the coral islands making up the Maldives in the Indian Ocean alone could cost $1.5 billion, according to Angus Friday, head of a group representing small island states.
In one promise of help, Norway said it would provide up to 3 billion crowns ($540 million) a year to slow deforestation in tropical nations.
The economist shaping climate policy for Australia's new Labor government said Prime Minister Kevin Rudd would not be expected to commit to any interim 2020 greenhouse gas reduction target in Bali. Rudd arrives on Tuesday.
"That's there for consideration, but no-one expects this meeting in Bali to reach agreement on anything like that," Professor Ross Garnaut said, describing a U.N. draft demand for emissions cuts of 25 to 40 per cent by 2020 as a guide.