* World's CO2 emissions rise 1.4 pct to 31.6 bln tonnes
* China's emissions offset falls in U.S. and Europe
* CCS development crucial to safeguard coal industry (Recasts, adds country breakdown in pct; IEA comment)
By Nina Chestney
LONDON, June 10 (Reuters) - China led a rise in global carbon dioxide (CO2) emissions to a record high in 2012, casting doubt over the chances of limiting global warming to what scientists regard as an acceptable level.
Falls in CO2 emissions by the United States and Europe were offset by China, lifting worldwide emissions by 1.4 percent to 31.6 billion tonnes, the International Energy Agency (IEA) said on Monday.
Scientists have said that the rise in global average temperature needs to be limited to less than 2 degrees Celsius this century to prevent climate effects such as crop failure and melting glaciers, but that would require emissions to be kept to about 44 billion tonnes of CO2 equivalent by 2020.
The IEA said that the world is on a path to an average temperature rise of between 3.6 and 5.3 degrees Celsius.
China's CO2 emissions rose by 300 million tonnes last year, but the 3.8 percent gain was one of the lowest it has achieved in a decade, reflecting the nation's efforts to adopt renewable sources and improve energy efficiency.
Japan's emissions, meanwhile, rose by 70 million tonnes, or 5.8 percent, as efforts to improve energy efficiency failed to offset increasing use of fossil fuels after the Fukushima nuclear accident in 2011, the IEA said.
In the United States, a switch from coal to gas in power generation helped to reduce emissions by 200 million tonnes, or 3.8 percent, bringing them back to the level of the mid-1990s.
Even though the use of coal increased in some European countries because of low prices, emissions in Europe declined by 50 million tonnes, or 1.4 percent, because of the economic slowdown, growth in renewables and emissions caps on industrial and power companies.
IEA chief economist Fatih Birol told Reuters that he does not expect any EU country to be able to produce substantial amounts of shale gas, as the United States has done, before 2020.
"After 2020, if there are increases in shale use in EU countries such as Britain, Poland and Germany, and it replaced coal like in the U.S., there would be a greater reduction in emissions," he said.
The IEA urged governments to adopt quickly four policies that would ensure climate goals could be reached without harming economic growth. They are: improving energy efficiency in buildings, industry and transport; limiting the construction and use of inefficient power plants; halving methane emissions; and partially phasing out fossil fuel subsidies.
The agency said that the coal industry in particular needs to take the development of carbon capture and storage (CCS) technology more seriously to ensure cleaner use of the fossil fuel.
CCS buries and traps CO2 underground but it is not yet a commercially viable proposition.
"Realistically, we need to see CCS penetrate within the next 10 years - certainly no later than 2025 - or the fossil fuel industry will be caught unprepared," Birol said.
International negotiators are in Bonn, Germany, until Friday for United Nations talks aimed getting a new global climate treaty signed by 2015 and in force by 2020.
U.N. climate chief Christiana Figueres said that the IEA report comes at a crucial time for the talks.
"Once again we are reminded that the gap can be closed this decade, using proven technologies and known policies, and without harming economic growth in any region," she said. (Editing by Mark Trevelyan and David Goodman)
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