Changing Climates, the Role of Renewable Energy in a Carbon-Constrained World cites an "emerging consensus" in both the scientific and political communities that a global warming limit of 2 degrees Centigrade above pre-industrial levels can avoid the most serious climate change threats.

But, the report adds, this level can only be reached with major long-term emission reductions from many different and combined options, including larger renewable energy markets, efficiency improvements, and fossil fuels that are much cleaner than those on which the world's US$60 trillion economy currently depends.

The report's lead author, John Christensen from the UNEP Risoe Centre on Climate, Energy and Sustainable Development, says that many renewable energy technologies have "moved from being a passion for the dedicated few to a major economic sector attracting large industrial companies and financial institutions."

However, basic policy questions remain, including the need to ensure technical progress, overcome implementation barriers, and accelerate the shift to renewable energy. "Although there are many good political, economic and social reasons for stimulating a more rapid development of renewable energy -- not the least of which is climate change -- the sector is hampered by a number of market distortions and institutional, financial, and economic barriers," says Christensen.

"Using economic policy instruments, such as renewable energy targets and tax incentives, can be an effective strategy to stimulate change and reduce greenhouse gas emissions in energy markets that are increasingly deregulated and market orientated," Christensen says, citing the evolving experiences with carbon finance and emissions trading as promising longer-term incentives for developing renewable energy markets.

One of the report's conclusions is that specific policy tools need to fit local circumstances, but significant experience is already available in both developed and developing countries to guide the use of these policies. With the current and predicted cost competitiveness of many renewable energy technologies, however, it is not necessary to wait for strengthened global agreements before taking action at the national level.