IEA says oil price slump is a golden chance to transition to clean energy

World leaders have a "golden opportunity" now, with falling crude oil prices, to put a price on carbon emissions as cheaper fuel makes the move less risky politically, the International Energy Agency (IEA) has said.

Crude prices have dropped some 40% since June and the IEA is concerned that the fall could threaten a transition to renewable energy, Maria van der Hoeven, the IEA's executive director said this on the sidelines of the Lima Climate Change conference on 9 December.

Van der Hoeven said the collapse in oil prices is a stimulus for consumers the worldover. Leaders must respond with some sort of tax on carbon emissions or by cutting incentives for hydrocarbon production, she added.

"In fact, this is a golden opportunity. Policymakers can take actions unthinkable a year ago."

"We're putting $550bn (£351bn, €444bn) into fossil fuel subsidies," per year, Van der Hoeven said according to a Reuters report.

"Use this opportunity to phase them out!"

The Lima summit is meant to come up with elements of a draft deal for fighting climate change, due to be agreed in Paris in 2015, including a guiding long-term goal.

The world has a little less than 1000 billion tonnes of carbon to burn before it breaches the threshold level of two degree rise in temperature which will bring in an irreversible climate change.

The IEA said in November that oil prices could fall further in 2015 and that the market had entered a new phase with lower Chinese economic growth and booming US shale output.