The Organisation of Petroleum Exporting Countries (OPEC) is discussing the creation of a $3 billion fund designed to tackle climate change by investing in carbon capture and storage technology.

The proposal, which is being considered by officials at the third OPEC summit meeting in Riyadh, Saudi Arabia, could form part of a broader declaration by the cartel of 12 oil-producing nations this weekend.

The plan would involve OPEC, a group of industrialised nations and wealthier developing countries such as China each investing $1 billion into a fund which could then be used to develop new technologies to help capture and store carbon emissions related to the burning of oil and gas from power stations and automobiles.

The initiative, first tabled yesterday by Dr. Adnan Shihab-Eldin - a prominent Kuwaiti who is a former acting secretary general of the organisation, was welcomed yesterday by the United Nations' top climate change official.

"OPEC can deliver a big part of the solution to climate change," said Yvo de Boer, executive secretary of the UN Framework Convention on Climate Change, speaking on the sidelines of the summit. "International action on climate change is a war against emissions, not a war against oil."

"Oil will continue to play a pivotal role in the global energy mix for decades to come, not least due to growing global energy demand," he continued. "But oil will have to be decarbonised with adequate technologies."

Mr de Boer said that, if OPEC accepts it, the proposal could be developed further at a forthcoming UN Climate Change Conference in Bali, Indonesia next month, which is aimed at creating a new framework for action on climate change.

OPEC, which in the past has been sceptical about the science of climate change, has been keen to use the Riyadh summit to demonstrate that it shares environmental concerns expressed by other world powers and international institutions.

Mr de Boer said he believed OPEC's commitment was genuine and not, as some have suggested, merely an attempt to pay lip-service to an issue that is gathering political momentum.

He said the key issue was to bring down the excessive current cost of carbon capture technology.

"Oil producing countries feel they have been stigmatised in this whole debate while at the same time many industrialised countries are subsidising other fossil fuels like coal," he said.

OPEC, which declined comment on what it said were ongoing discussions, is also considering other proposals related to the organisation's purpose and possible role in tackling issues such as poverty and development.

However, officials reiterated yesterday that there was no imminent plan to boost oil production to help drive down global crude prices, which have continued to trade this week at close to $100 per barrel.

OPEC's leading official from Iran yesterday attacked speculators and hedge funds for contributing to spiralling oil prices.

"If the threat of an incursion by Turkey [to Iraq] sends oil prices up by $7 in one day then that is not a healthy market," said Hossein Kazempour-Ardebili, Iran's OPEC governor. "The role of speculators is very important ... They are only looking for a profit. To them it does not matter whether it is gold or another commodity, but high energy prices are hurting more and more people."

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts