MADRID, SPAIN - THE world can reach a significant new climate change pact by the end of 2009 if current talks keep up their momentum, the head of the United Nations climate panel said.

The United Nations began negotiations on a sweeping new pact in March after governments agreed last year to work out a treaty to succeed the Kyoto Protocol by the end of next year.

'If this momentum continues you will get an agreement that is not too full of compromises,' said Mr Rajendra Pachauri, head of the UN Intergovernmental Panel for Climate Change, during a seminar at the Asian Development Bank annual meeting in Madrid on Sunday.

The United Nations hopes to go beyond Kyoto by getting all countries to agree to curbs on emissions of greenhouse gases that fuel global warming.

Only 37 rich nations were bound to cut emissions under Kyoto. The United States, one of the world's biggest polluters, refused to join the agreement.

The next talks, to be held in Germany in June, will address funding technology to mitigate climate change - a key demand from developing countries who say rich countries should foot much of the bill.

Getting the private sector on board with a well regulated carbon emissions trading system is key to long-term financing, according to delegates at the ADB seminar.

'Investors need some certainty they will get some return,' said Mr Simon Brooks, vice-president at the European Investment Bank.

Prestige and politics
India's Pachauri said popular awareness of global warming had risen sharply over the last 12 months and put pressure on Washington and other governments for action.

He said he believed it would be very difficult for any country to remain outside a climate change pact.

'There's a question of national prestige involved,' said Mr Pachauri, head of the UN panel that last year shared the Nobel Peace Prize with former United States President Al Gore.

President George W. Bush pulled the United States out of Kyoto in 2001, saying the pact would hurt the economy and was unfair since it excluded big developing nations from committing to emissions cuts.

Key to a new agreement is Asia, notably China, said Mr Odin Knudsen, a managing director for JP Morgan & Chase.

'China is making tremendous progress,' said Mr Knudsen, a specialist in climate change. 'It's in China's interests and they want to be energy efficient.'

In the last 3 decades Asia's energy consumption has grown 230 per cent and the region has gone from producing one tenth of world greenhouse gas emissions, to a quarter, according to the Asian Development Bank.

The United Nations calculates global warming will cause a 30 per cent decline in crop yields in central and south Asia by 2050 and decrease freshwater availability for over a billion people.

Faced with such threats, China is switching over to renewable energy sources which are expected to provide more than 30 per cent of its power needs by 2050, according to the United Nations. -- REUTERS