TOKYO, — Citing a deadly European heatwave and recent massive power failures in the United States, Scandinavia and Italy, the executive director of the U.N. Environment Program, Klaus Toepfer, said two of world's most pressing issues -- energy security and climate change -- will not be solved "by the mindset that created them."

"Instead of climate change we need to create the climate for change", Mr. Toepfer told more than 600 bankers, financiers and members of the financial sector in Tokyo for the UNEP Finance Initiative Global Roundtable. In line with this year's theme "Sustaining Value," Mr. Toepfer said this change must be towards sustainable forms of energy to power the global economy.

Noting that large centralized fossil-fueled power stations supported by large centralized distribution systems will continue to be vulnerable, Mr. Toepfer launched the UNEP Sustainable Energy Finance Initiative aimed at engaging the finance sector to invest in renewable energy and energy efficiency.

Although sustainable energy technologies such as solar cells and wind generators have advanced rapidly, Mr. Toepfer said the transaction costs and market uncertainty of many renewable energy projects has lead most financiers to adopt a "wait-and-see" attitude, which is compounded by an overall lack of information, experience and the tools needed to quantify, mitigate and hedge project and financial product risks.

With support from the United Nations Foundation, SEFI will help mainstream financiers overcome these barriers and consider renewable energy and energy efficiency as not just niche investments, but key components of secure energy systems based on truly sustainable forms of energy.

SEFI builds on previous efforts by UNEP's Energy Unit, which has been working with the finance sector since the late 1990s on new approaches to financing sustainable energy in developing countries. Through various programs, UNEP has implemented a variety of "financial catalysts" -- including seed financing and enterprise development, financing subsidies, guarantee facilities, and financier advisory support services.

In his launch of the new initiative, Mr. Toepfer cautioned that if the billions of dollars to be invested in new energy infrastructure in the next two decades follows the fossil fuel "business as usual" mindset, the resulting serious and irreparable environmental and social harm could dramatically affect the health of human societies and economies and the ecosystems on which they depend. Further, the economic losses for climate change, documented in a landmark 2002 UNEP Financial Initiatives study, were described by a group of major global financial corporations as "a major risk to the global economy" and noted that "worldwide economic losses due to natural disasters appear to be doubling every 10 years and, on current trends, annual losses will reach almost $150 billion in the next decade."

"For developing countries, in particular, the reliance on fossil fuels and centralized infrastructure will not serve the vast majority of people in rural areas where the economic benefits of a modern energy system are elusive, although the environmental costs from using low quality fuels such as dung, coal and kerosene are not", says Mr. Toepfer.

Nearly three billion people -- half of the world's population -- rely on these fuels for cooking and heating in simple devices producing large amounts of indoor and local air pollution, which is linked to between 4% and 5% of the global disease burden.

UNF president Tim Wirth said: "In many developing countries, the energy needed to drive development while protecting human and environmental health means providing technology and services that are accessible, affordable and clean. Renewable energy and energy efficiency are poised to meet this challenge."