Britain's climate policies can help shield the economy from oil and gas price shocks triggered by external factors such as the Arab Spring, an analysis commissioned by the government showed on Friday.

Energy price spikes can often dent economic growth, business investment and employment, as witnessed during the global financial crisis in mid-2008 when oil rose to nearly $150 (95 pounds) per barrel, research group Oxford Economics said in a report.

Any one-off European Union intervention to clear the massive glut of permits now clogging its emissions trading scheme is likely to lead to a 'central bank' or other policy tool to manage future imbalances in the world's biggest carbon market.

If it does act, the European Commission, the bloc's executive, is cautious about entrenching such a mechanism in the scheme, the bloc's chief weapon to fight climate change.

The International Maritime Organization (IMO) is making little headway on market-based measures to curb carbon dioxide emissions from international shipping, putting it on a policy collision course with the European Union, observers said.

A committee of the 170-member United Nations shipping body was unable to make "tangible progress" after a week of talks that ended late on Friday, a delegate told Reuters.

British Airways, Qantas and other airlines are calling on governments to find a swift resolution to a political dispute over the European Union's carbon scheme, because the deadlock may create competitive distortions.

Since the start of 2012, EU law obliges all airlines using EU airports to be included in the EU Emissions Trading System (ETS), the 27-nation bloc's main policy to fight global warming as it caps emissions on over 11,000 power and industrial plants.

The World Bank's carbon finance initiatives will likely be needed for at least five years, as the United Nations struggles to create a self-sufficient, international carbon market, the manager of the bank's carbon finance unit told Reuters.

Negotiators at December's U.N. climate talks in South Africa agreed to extend the 1997 Kyoto Protocol - the only global pact enforcing carbon cuts on developed nations - for at least five years beyond its first commitment period at the end of 2012.

A group of island states most vulnerable to global warming have lashed out against rich nations for wanting to delay a new international climate pact until years after the Kyoto Protocol on curbing carbon emissions expires in 2012.

The 42-member Alliance of Small Island States (AOSIS) said countries such as Japan and Russia were "reckless and irresponsible" for promoting a delay in the adoption of a new international agreement until 2018 or 2020, just weeks before the start of a United Nations climate summit in Durban, South Africa.