THE INTERNATIONAL Energy Agency (IEA) will this week revise its estimate of carbon dioxide emissions over the next 25 years — and predict an even more dramatic acceleration because of increased reliance on coal to produce electricity.

The IEA's warning, expected in World Energy Outlook, its comprehensive annual snapshot of international trends, comes only a week after the Stern report painted a grim picture of global environmental and economic damage, unless action was taken to reduce emissions.

The IEA makes clear that, without government intervention, emissions will rise radically as developing economies continue to rely on fossil fuels.

It has revised its predictions over the past year as gas prices have remained high and coal has become more attractive as an energy source. However, the IEA believes governments can mitigate the increase in emissions by increasing efficiency, reducing demand for fossil fuels, and introducing policies to increase the use of alternative forms of power.

The IEA believes that savings from measures to encourage clean energy production will eventually far exceed the initial investment costs of switching from fossil fuels.

Pressure for companies to adhere to climate change guidelines emerged last week from Institutional Shareholder Services, the world's largest shareholder activist group, whose members comprise investment funds with more than £1 trillion under management.

ISS research director Doug Cogan said the organisation was working on a new code of best practice and was prepared to "name and shame" firms that flagrantly disregarded its recommendations. The ISS recently hit out at a decision by U.S. firm Texas Utilities to invest in coal-fired power stations. Mr. Cogan described the decision as "unacceptable" and said it represented financial risk for investors as many U.S. States are introducing schemes that aim to curb carbon emissions. —

© Guardian Newspapers Limited 2006