British billionaire Richard Branson said Monday that rocket-powered space tourism flights by his firm Virgin Galactic would have only a minor impact on climate change.

More than 500 people have already reserved seats -- and paid deposits on the $200,000 ticket price -- for a minutes-long suborbital flight on the SpaceShipTwo (SS2) set to begin by the end of this year.

"We have reduced the (carbon emission) cost of somebody going into space from something like two weeks of New York's electricity supply... to less than the cost of a economy round-trip from Singapore to London," Branson told reporters in Singapore.

The founder of the diversified Virgin group was in the Southeast Asian city-state to attend a summit organised by the Carbon War Room, an environmental charity organisation he founded in 2009.

"New technology can dramatically reduce the carbon output and that is the challenge we have set ourselves," added Branson.

The SS2's lightweight carbon-fibre body will also "reduce fuel burn dramatically", he said.

The SS2, with two pilots, is designed to be launched by a transport plane called White KnightTwo and will be guided by a rocket motor before gliding back to Earth.

Branson, whose Virgin group includes airlines Virgin Atlantic and Virgin Australia, said the aviation industry could do more to cut its carbon output and shift to cleaner fuels.

Rising carbon emissions caused by industry, transport and deforestation have been blamed for global warming.

"If you have clean fuels, you got a competitor to the dirty fuels and you could hopefully reduce the cost of the fuel, which means you can reduce the price of the ticket," he said.

Branson's Virgin Group and Virgin Green Fund last October announced plans to form a $200 million emerging markets fund with Russia's Rosnano Capital to invest in innovations and green technologies.

The Carbon War Room, which he founded with other global entrepreneurs, aims to enpower industries to find market-based incentives to reduce carbon emissions.