Merkel, Blair call for EU strategy on climate change

German Chancellor Angela Merkel says Europe needs to take the lead on tackling climate change and develop a unified strategy for when the Kyoto Protocol expires.

Ms Merkel, in London for talks and a private dinner with British Prime Minister Tony Blair, said it was also vital to any new agreement to involve the United States, which did not ratify the 1997 accord to cut greenhouse gas emissions.

"Europe needs a strategy for the time once the Kyoto Protocol has elapsed in 2012," Ms Merkel said.

"We have to do everything in order to issue a wake-up call to all nations - climate change is one of the great challenges of the 21st century."

Mr Blair said it was important to create the right framework for international agreement and there was a "real opportunity" to make progress in the coming year when Germany takes over the European Union (EU) presidency.

He also said there was a "sense of hope" that the United States could be part of any new agreement, particularly with a growing, cross-party consensus in many US states about the need for clean energy.

Mr Blair is keen to push the issues further up the agenda after his Government published a major report on Monday, which said global warming could cost the world's economies up to 20 per cent of their gross domestic product (GDP).

Former World Bank chief economist Sir Nicholas Stern's climate change report says combating global warming will cost about 1 per cent of GDP, 20 times less than the potential cost of doing nothing.

The report recommends a huge expansion of carbon-emissions trading networks, such as that set-up by the 25-nation EU bloc, which aims to limit pollution by allowing industries to buy and sell their emission rights.

Ms Merkel said Germany was interested in the contents of the Stern report but highlighted that there was "no real compatibility" with German efforts to tackle climate change and some existing EU rules.

- AFP