Aug. 1 (Bloomberg) -- The reduction of carbon emissions to combat climate change and the safeguarding of supplies of the region's growing energy needs will top the agenda at a meeting of Asia-Pacific finance ministers starting in Australia today.

The meeting of finance ministers from the 21-member Asia Pacific Economic Cooperation forum in Coolum, Queensland, including the world's two largest carbon dioxide emitters -- China and the U.S. -- will discuss market-based strategies for reducing so-called greenhouse gases blamed for global warming, according to Australia's Treasurer Peter Costello.

``We have to make sure that this huge energy demand that we will see emerging over decades to come is met within an international framework that reduces carbon emissions and the risk to climate change,'' Costello said today at a news briefing.

Energy demand in the APEC region is anticipated to increase at the rate of 2 percent a year to 2030, according to Australian government estimates. Scientists say global warming caused by man-made emissions of carbon dioxide is causing glaciers to melt, sea levels to rise and coral reefs to die out.

Australian Prime Minister John Howard last month said the nation will start a national carbon emissions trading system by 2012 and set a greenhouse gas reduction target next year to combat climate change.

APEC nations would follow the European Union, which set up the largest greenhouse-gas trading system in 2005. Factories in the EU were granted permits in the first phase of the program and can buy extra permits to emit more carbon dioxide. They can sell the surplus if they emit less, creating an incentive to lower emissions.

Emissions Trading

The value of global emissions-credit trading tripled last year to $30.1 billion, with 81 percent of that in the European Union, according to the World Bank. Voluntary trading occurs elsewhere, such as the Chicago Climate Exchange and Australian Climate Exchange.

China produced 6.2 billion metric tons of carbon dioxide from burning fossil fuels and producing cement last year, the Netherlands Environmental Assessment Agency said in June. That pushed it past the U.S. as the world's largest emitter.

China, like the U.S. and Australia, is not subject to targets under the only international treaty requiring emissions cuts, the Kyoto Protocol, whose provisions expire 2012. China is the world's largest user and producer of coal, a source of carbon when burnt, and its economy grew at the fastest pace in 12 years in the second quarter as it rapidly develops.

Australia and the U.S. refused to ratify the Kyoto Protocol, arguing it would harm economic growth. President Bush on May 31 proposed convening a new round of talks with the world's biggest economies to set emission targets.

`League of Nations'

``It's the government intention to meet its Kyoto target, which puts us in a small league of nations,'' Costello said. ``A lot of countries that ratified Kyoto won't get anywhere near meeting their targets.''

Costello said securing adequate and reliable energy supplies is a key concern for all APEC economies. For some forms of energy such as natural gas and coal, the APEC region will move from net exporter to net importer by 2030, the Australian government estimates.

``We know that China has huge energy needs as it develops over the decades to come,'' said Costello. ``It needs to know that its development will not be interrupted by energy scarcity and so energy security is very big issue for China. Australia has a lot to offer China in terms of energy security.''

Climate change will cause extinctions of animals to mount, water shortages to spread and droughts and floods to become more frequent as man-made emissions of greenhouse gases make the Earth warmer, the United Nations warned in April.

Hurricanes, Droughts

The U.S. and Australia have felt what may be the effects of climate change, through hurricanes and droughts respectively.

The record 2005 hurricane season and the flooding of New Orleans after Hurricane Katrina helped change U.S. public opinion about global warming. Hurricanes in 2005 killed more than 1,300 people, destroyed towns along the Gulf Coast, left New Orleans submerged and depopulated, and disrupted oil and natural gas production.

Australia has suffered its worst drought in a century, which has dried up dams and rivers and reduced the amount of water available for irrigation. Crop production has been slashed and herds have dwindled.

APEC economies represent half the world's trade. The biggest member economies are the U.S., Japan and China. Other members are Australia, Brunei, Canada, Chile, Hong Kong, Indonesia, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, South Korea, Taiwan, Thailand, and Vietnam.

Last Updated: August 1, 2007 02:59 EDT