BRUSSELS - The European Union should shift more of its spending to climate and energy security as part of a radical overhaul of the bloc's budget, according to a draft paper by the EU's executive arm.

The proposal, which the European Commission is likely to be table in late November, would mark a long-term shift of funds away from agriculture.

Budgets worldwide could be affected by a new global climate pact to be agreed at a U.N. meeting in Copenhagen in December.

From 2013, when the EU's current long-term spending plan ends, there should be a major refocusing of EU spending priorities, with more emphasis on growth and jobs, climate and energy security ... and less emphasis on agriculture, said the draft, obtained by Reuters.

The paper does not mention the size of future EU budgets, now worth 125 billion euros ($188 billion) a year. It suggests a new system for raising revenues -- perhaps including the sale of allowances for greenhouse gas emissions.

In Tokyo, Poland's Environment Minister Maciej Nowicki said Warsaw was poised to agree a 40 million euro ($60 million) sale of some of its surplus greenhouse gas emissions rights to Spain and Ireland, Poland's first such government-to-government deal.

BIGGER CO2 MARKET?

Under the U.N.'s existing Kyoto Protocol, running until 2012, countries such as Poland which are within emissions limits can sell surpluses to nations whose emissions are over target. Poland's emissions dived after the collapse of Communism.

Such sales could become far more common if, for instance, Copenhagen paves the way to a broader market beyond Kyoto. The United States is among nations considering such a cap and trade scheme similar to the existing EU one.

Talks on a new U.N. deal to succeed Kyoto are bogged down with disputes over cash and emissions cuts, with just five days of formal negotiations left -- in Barcelona, Spain, from November 2-6 -- before the Copenhagen meeting from December 7-18.

Developing nations say that the rich have to make far deeper cuts in greenhouse gas emissions than those now on offer that total 11 to 15 percent below 1990 levels by 2020. And they want promises of far more aid and green technology to help them start to rein in their own rising emissions.

In London, a U.N.-backed report indicated that public sector cash spent to help developing nations fight global warming could help unlock more spending by the public sector in poor nations.

Experts indicate that investments of around $500 billion a year will be needed to assist developing countries adapt to climate change while powering low-carbon growth, the U.N. Environment Program said.

Much of the money will come from the private sector but will only flow if creative public policies that reflect the differing circumstances of developing economies are swiftly adopted, it added.

In Washington, a report said that climate change will mean new health problems for the United States such as infectious diseases caused by changes in rainfall and safety challenges from floods, storms, droughts or wildfires.

But the study, by the Washington-based health advocacy group Trust for America's Health, said only five U.S. states -- California, Maryland, New Hampshire, Virginia and Washington -- have plans for dealing with the health implications of global warming.

(Additional reporting by Risa Maeda in Tokyo, Nina Chestney in London, David Morgan and Richard Cowan in Washington; writing by Alister Doyle; editing by Robin Pomeroy)

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