Investors seek clarity on climate

The call, in an open letter, comes as leaders of G8 most industrialised nations are to meet in Germany.

"Climate change brings significant opportunities and risks for us investors," say the 17 signatories, which hold 3 trillion euros in assets.

The only international climate change deal - the Kyoto protocol - expires in 2012. The US never ratified it.

Policy framework

Scientific evidence shows that temperatures will increase by 1.8 and 4 degrees Celsius this century, as a result of increased carbon emissions.

"To finance the solutions and manage the risks we need a strong policy framework that tackles carbon emissions effectively while providing transparency and stability for investment decision-making" said the Institutional Investors Group on Climate Change.

The G8 has a vital role to ensure this happens it added.

Different solutions

While there is agreement that climate change needs to be addressed, how exactly to do that has met with different views.

Germany - the country holding the G8 presidency - has wanted tougher emissions levels, while the US has stressed technological innovation as a key to tackle global warming.

Earlier this week, US President George Bush proposed uniting a group of big emitters who would set non-binding targets by the end of next year.

But some analysts say this has been interpreted as a way of undercutting other initiatives - for example by the G8 or United Nations.

The investor group said it wanted the G8 event to decide upon major aspects for a new Kyoto agreement, in advance of a UN meeting in Indonesia in December.

Getting developing nations on board, increasing energy efficiency and reducing deforestation were all issues that needed addressing said the group.

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