"Green" energy sought as fix for economy and planet

By Nichola Groom and Ben Hirschler

DAVOS, Switzerland (Reuters) - Investments and policies to combat climate change will put the world economy on the road to recovery and help cool the planet in the process, delegates at the World Economic Forum said on Wednesday.

Although the meeting is dominated by the global recession, climate change is a central issue for policymakers and business leaders who want to reduce reliance on dirty and imported fossil fuels and support growing industries capable of creating jobs.

"Climate change in some ways is more in the center," said Frances Beinecke, president of U.S. environmental group the Natural Resources Defense Council. "Designing a new energy future is much more central to the conversation than it was in the past, where it was considered sort of an add-on."

If there is any optimism around the potential for aggressive new environmental policies and big investments in renewables to create "green collar jobs," U.S. President Barack Obama could be given much of the credit.

Money for solar and wind power projects, which flowed at a booming rate for most of the last two years, dried up at the end of last year because of the credit crunch and a fall in the price of oil that dampened investor interest in green energy.

Obama, however, has committed to making clean energy and efficiency part of his $825 billion economic stimulus package.

"The bad news for us is the very low oil prices that we see right now, but... we are very encouraged by what we hear Obama say," said Steen Riisgaard, chief executive of Denmark's Novozymes, a maker of enzymes for ethanol production.

The International Energy Agency said all governments should also seek to green their stimulus plans.