Climate change will add to food, utility bills

By Gerard Wynn - Analysis

BONN, Germany (Reuters) - Climate change presents a tough choice for governments determined both to fight global warming and tackle the rising cost of living.

Climate measures inflate energy costs by putting a price on burning fossil fuels and also stoke food bills by using farmland and crops to produce renewable fuels.

Now near-record oil and food prices coupled with a global economic slowdown have triggered unrest in several countries and demands to ease taxes on fuels and free up farmland for food.

"This important part of the global economy, food and energy, has been grossly distorted due to under-pricing of water and (carbon-free) air," Nobel Laureate economist Joseph Stiglitz told Reuters.

The fight against climate change made higher food prices inevitable, he said. "People will have to adjust."

Officials from more than 170 countries this week tried to forge a new climate pact in U.N. talks in Germany that included steps such as emissions trading and taxes to brake emissions of planet-warming carbon dioxide, which will increase energy costs.

A summit in Rome tried on Thursday to unlock aid for the world's starving and many there blamed record food prices on climate policies which supported using vast quantities of the world's crops for biofuels.

Cutting U.S. and European farm and biofuel subsidies would reduce food bills, but there was no alternative to taxes on fossil fuels like oil to cut greenhouse gases, Stiglitz says.