Europe's economic slump is allowing utilities in some countries to burn increasing amounts of cheap, highly polluting coal for electricity generation and still meet legally binding targets to cut carbon dioxide emissions, Reuters research shows.

The EU's carbon scheme, its main tool to fight global warming, caps CO2 emissions on around 12,000 industrial and power plants in 30 countries and requires them to purchase permits to exceed those caps.

Britain's energy plans call for tapping Iceland's geothermal resources in a move that could rekindle talk of creating a "supergrid" for electricity linking the continent, UK, North Africa and Iceland.

But experts say the project is too expensive and technically challenging to be feasible in the foreseeable future.

"Interconnectors in North West Europe will lead to electricity flows following the rules of supply and demand. So it will flow where it is needed, which is good for our security of supply," the UK's Department of Energy and Climate Change (DECC) said.

European Union ambassadors were due to meet on Wednesday in an effort to settle a dispute over the allocation of seats to member states on the United Nations' Green Climate Fund (GCF) board, sources close to the matter said.

U.N. climate talks in Durban last year agreed on the design of the fund, which is aimed at channeling up to $100 billion a year to help developing countries adapt to climate change.

Expanding cities threaten to eat up a swath of land the size of France, Germany and Spain combined in less than 20 years, putting the world under even more environmental pressure, experts said at a climate conference on Tuesday.

Cities are growing to accommodate a rising global population and as countries like China, India and Brazil pursue fast economic growth.

Airbus and Europe’s biggest airlines on Monday called on the European Union to find a compromise on aviation carbon curbs, warning that Europe’s emission limits on foreign carriers could lead to retaliation.

Airbus, the world’s biggest maker of civil aircraft, and eight airlines including Air France-KLM, Lufthansa and British Airways urged European leaders to “use their influence” and push for a global agreement to tackle emissions from the industry and avoid an escalating trade conflict, according to a letter sent to the prime ministers of France, Germany, Spain and Britain.

European Union industrial carbon emissions rose by up to 2.4 percent last year, analysts surveyed by Reuters estimated, below the market cap and keeping the 27-nation bloc on track to meet its 2020 climate target.

The EU's emissions trading scheme (ETS) limits the emissions of over 12,000 installations, including power plants and factories, and covers over 40 percent of the 27-nation bloc's total emissions.

On behalf of 92 pension funds, asset managers, insurers and banks, the Carbon Disclosure Project (CDP), which holds the world's largest collection of self-reported corporate environmental data, has sent letters to the CEOs of 415 of the world’s largest public companies calling for cost-effective management and reductions of their carbon emissions.

The letters were sent as part of CDP's Carbon Action initiative in parallel to CDP's annual request for disclosure of greenhouse gas emissions, climate change strategies and water use.