By Laura MacInnis

GENEVA, June 19 (Reuters) - Removing salt from sea water to overcome a worldwide shortage of drinking water could end up worsening the crisis, environmental group WWF warned on Tuesday.

Desalination, the filtering and evaporation of sea water, is very energy-intensive and involves significant emissions of greenhouse gases that scientists say are a factor in the shrinking supplies of freshwater, the Swiss-based group said.

Spain, Saudi Arabia, Australia and other arid countries should rely more on water conservation and recycling and avoid huge desalination projects that have been linked to pollution and ecosystem damage.

"The quite possibly mistaken lure of widespread water availability from desalination ... has the potential to drive a major misdirection of public attention, policy and funds away from the pressing need to use all water wisely," it said.

Concerns about global warming, which could exacerbate droughts and erode the world's icecaps and glaciers, which provide 69 percent of global freshwater supplies, are expected to spur investments in the technology.

Some farmers have used water from desalination to grow "unsuitably thirsty crops in fundamentally dry areas," the WWF said, an unsustainable trend given its high energy costs: "It seems unlikely that desalinated agriculture is economic anywhere".

"Regions still have cheaper, better and complementary ways to supply water that are less risky to the environment," it said.

The WWF, or World Wildlife Fund, estimated there were more than 10,000 desalination plants around the world. It said the sector would likely grow exponentially in coming years as governments seek to supply water to fast-growing arid areas in the United States, India, China and elsewhere.

Half of the world's desalination capacity is in the Gulf area, where wealthy oil-producing nations use it for about 60 percent of their water needs.

Australian cities have also relied heavily on the technology and Spain has used it extensively to support real estate development, agriculture and even golf courses along its Mediterranean coast.

Large-scale desalination engineering could also endanger sea life, the WWF said, urging further research into the tolerance of marine organisms and ecosystems to higher salinity and brine waste, byproducts of the salt removal process.

While desalination could have important uses in some cases, such as environments with brackish water, the WWF said that big plants ought to be approved only in circumstances where they meet a real need and must be built and operated in a way that minimises broader environmental damage.

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