Bali meet must spur investment

By Gerard Wynn and Adhityani Arga

BALI (Reuters) - Climate talks launched in Bali on Monday must assure investors of future government backing for climate-friendly energy and building projects, said the host of the meeting, Indonesia's Environment Minister Rachmat Witoelar.

The talks in Bali, attended by some 190 countries, will try and lay the foundations for a new climate change deal in time to replace or extend the Kyoto Protocol from 2013.

A key challenge will be to entice business to invest in cuts in greenhouse gas emissions and prepare for climate change.

Investment is needed, for example, to re-direct the world's energy supply away from high carbon-emitting fossil fuels to cleaner sources. But that requires a new policy regime of carrots and sticks.

"The market is a key part of our effort against climate change," Witoelar told the opening session of the two-week conference.

"The market demands the certainty and predictability we need to offer them. We need to enhance our investments in technology. There are clean technologies available. There's lots of best practice."

Governments hope the Bali talks will set the platform for future agreement by 2009 on specific climate targets or policies, country by country, to succeed existing Kyoto Protocol commitments, which are considered too weak.

For example Kyoto has created a carbon market that last year directed $5 billion investment into cutting greenhouse gas emissions in developing countries.