The U.N. Industrial Development Organization found that cost-effective renewable energy resources could reduce overall emissions by as much as 10 percent if renewables account for 20 percent of industrial energy by 2050.
UNIDO said dramatic cuts in emissions could happen in developing countries if they adopted the right policies.
"Renewables are not cost competitive where fossil fuels are subsidized," a UNIDO report found. "They are, however, already cost competitive in many cases and many countries with unsubsidized fossil fuels."
U.N. agencies said eliminating subsidies was one of the best ways that countries can cut back on wasteful energy practices.
Generating the benefits of renewable energy, however, can only happen "if specific policies are developed to create a business environment conducive to private sector investment," the UNIDO report found.