A worsening of the euro zone debt crisis could increase a climate funding gap to $45 billion (28 billion pounds) by 2015 as governments struggle to maintain levels of climate change investment due to austerity measures, Ernst & Young said on Thursday.
Even under current cost-cutting measures, it is likely a gap of $22.5 billion in investment in renewable energy, clean technology, pollution-cutting measures and subsidies will emerge by 2015 across 10 of the world's major economies, the accounting and consultancy firm said in a report.
Those countries are Germany, France, Britain, Spain, Italy, Japan, the United States, Australia, South Africa and South Korea.
The report comes ahead of a U.N. climate summit starting on November 28 in Durban, South Africa, where negotiators will work on a new global climate deal.
Expectations are low for a successor to the Kyoto Protocol, which limits greenhouse gas emissions in developed countries, to emerge in Durban. There are also concerns that governments will not be able to commit the full $100 billion a year pledged to help the most vulnerable countries tackle climate change.
The enormous projected funding gap revealed by this report suggests continuing economic uncertainty is pushing a low carbon economy further out of reach, said Juan Costa Climent, the firm's global climate change and sustainability services leader.
The turmoil in the euro zone has led to falling global stocks over the past few months.
Nervous markets are showing concern about whether Italy's Mario Monti and new Greek leader Lucas Papademos can impose tough austerity measures and economic reforms, and fears are growing that France, the euro zone's second biggest economy, is being sucked into the debt crisis.
If the euro zone crisis worsens and leads to a new banking crisis, Germany would face the largest funding gap in absolute terms of $8.3 billion, Ernst & Young said.
Spain, Japan and the United States could face a gap of more than $6 billion, while Britain and France could see a gap of more than $5 billion.
Under current austerity measures, the climate funding gap will be the worst in Spain, Britain and France by 2015.
Spain -- where the centre-right opposition party is expected to win the November 20 parliamentary election -- is forecast to spend $5.1 billion less on climate change, Britain $4.2 billion less and France $2.9 billion less, the report said.
Ernst & Young said only 18 percent of 300 business leaders from large multinational companies in more than 50 countries think a climate deal is likely to emerge, but 83 percent believe a multilateral agreement is needed to tackle climate change.
The conditions under which the Durban meeting will take place could not be more challenging, said Climent.
Without a global agreement, rather than working out how to live in a carbon-constrained economy, the emphasis will be on living in a climate-constrained world, he said.
(Reporting by Nina Chestney; Editing by Janet Lawrence)