Downturn no reason to delay climate pact - expert

* Delay will raise cost of cutting greenhouse gases

* Climate talks hinge on developing countries

By Doug Palmer

WASHINGTON, March 4 (Reuters) - Countries will face an even harder job of cutting greenhouse gas emissions if they delay reaching a deal this year because of the global economic downturn, a British climate change expert said on Wednesday.

"Putting things off in this area is really costly," Nicholas Stern, a former British Treasury economist said in a speech at the Peterson Institute for International Economics.

Each year countries postpone an agreement, greenhouse gases will continue to rise, Stern said.

"If you wait for five years before you get going ... you're at a much more difficult starting point," Stern said. "We have to show people that high carbon growth within a few decades becomes a contradiction in terms. It kills itself."

Stern released a seminal report in 2006 that warned that inaction on emissions blamed for global warming could cause economic pain equal to the Great Depression of the 1930s.

But with many countries already in the midst of a tough recession, some question if now is the time for new climate change commitments that would raise business costs.

President Barack Obama has proposed creating a cap-and-trade system in the United States that would raise $646 billion over the next decade by auctioning off pollution permits to industries that generate greenhouse gases.

Success in talks aimed at reaching a new global climate deal in December in Copenhagen depends largely on whether developing countries agree to steps to help solve a problem they say rich countries created.

'GREEN PROTECTIONISM' A CONCERN

There is already broad consensus in those talks on a goal of rich countries cutting their greenhouse gas emissions by 80 percent by 2050 and the world as a whole cutting its emissions 50 percent over the same period, Stern said.

China could agree to cap its greenhouse gases sometime before 2020 and India sometime after that year, but there is "no way" developing countries are going to agree to quotas as early as 2010 or 2012, though the United States would have to begin making sizable cuts right away, he said.

Stern urged U.S. lawmakers to resist "green protectionism" in the form of tariffs on goods from countries they believe are not making comparable commitments to curb global warming.

Studies suggests countries that don't agree to cuts will have only a one or two percent overall cost advantage over those countries that do, he said.

However, in certain energy-intensive sectors such as cement, steel, aluminum and paper the cost advantage would be much bigger, Stern said.

"In those industries you could look for international understandings on standards, and already that kind of thing is being discussed in the steel industry," he said.

If rich countries go into the negotiation with the idea that "the only thing China understands is a threat, we're not going to do very well, Stern said.

A successful agreement will require that rich nations help poorer ones, including China, finance cuts in greenhouse gas emissions, he said.

That could come in a variety of forms, such as the United States contributing to Brazil's fund to stop deforestation of the Amazon, he said. (Reporting by Doug Palmer; Editing by Anthony Boadle)