Research and development investment in the order of between $100-billion and $700-billion a year was needed to help solve the world's climate problems, the World Bank's ‘World Development Report 2010: Development and Climate Change' highlighted on Tuesday.

This would be a "major increase" on the "modest" funds currently being spent on energy research, development and deployment (RD&D), which the authors note has remained at about $10-billion a year for decades. This represented about 4% of overall public RD&D spend.

Private sector spending on energy RD&D amounted to about 0,5%, or between $40-billion a year and $60-billion a year, of private revenues.

This was compared with $150-billion a year being invested in subsidies to petroleum products, globally.

"A switch to a low-carbon world through technological innovation and complementary institutional reforms has to start with immediate and aggressive action by high-income countries to shrink their unsustainable carbon footprints," stated the authors.

A "credible commitment" by these high-income countries to reduce their carbon emissions would stimulate the required RD&D of new technologies and process in energy, transport, industry and agriculture, the authors added.

Further, higher and more predictable demand for alternative technologies would also reduce the price of these technologies, helping to make it more competitive with fossil fuels, the report noted.

"Only with new technologies at competitive prices can climate change be curtailed without sacrificing growth," it added.

The World Bank further stated that the current financial crisis could not be used as an excuse to put climate change on the back burner, as a financial crisis, on average, lasted about two years, resulting in a 3% loss in gross domestic product (GDP).

This GDP loss could later be offset by more than a 20% growth over eight years of recovery and prosperity, the bank added.

However, time was not on the world's side in terms of climate change.

"The impacts of greenhouse gases released into the atmosphere will be felt for decades, even millennia, making the return to a ‘safe' level very difficult. This inertia in the climate system severely limits the possibility of making up for modest efforts today with accelerated mitigation in the future," the authors said.

Delays would also increase the costs as impacts worsened and cheap mitigation options would disappear, as economies become locked into high-carbon infrastructure and life styles, they added.

DEVELOPING COUNTRIES SUFFER MOST

Developing countries, and particularly the poor developing countries, would suffer the most and would bear between 75% and 80% of the cost of damages owing to climate change.

"Developing countries are disproportionately affected by climate change - a crisis that is not of their making and for which they are the least prepared," World Bank president Robert Zoellick said.

A 2 °C increase in the world's temperature levels above preindustrial levels could result in a permanent reduction of between 4% and 5% in yearly per capita consumption in Africa and South Asia, as opposed to minimal losses and an average reduction in world consumption, equal to about 1% of global GDP, in high-income countries, the report pointed out.

It added that developing countries would need assistance in adapting to the changing climate, noting that climate finance had to be greatly expanded, since current funding levels fell "far short of foreseeable needs".

Climate investment funds, managed by the World Bank and implemented jointly with regional developing banks, offered one opportunity for leveraging support from advanced countries, since these funds could buydown the costs of low-carbon technologies in developing countries, the authors highlighted.

CLIMATE-SMART WORLD WITHIN REACH

Meanwhile, World Bank chief economist for sustainable development Marianne Fay said that a climate-smart world was within reach if countries worked together now to overcome inertia, keep costs down and to modify energy, food and risk management systems.

The World Bank noted that existing low-carbon technologies and best practices could already significantly reduce energy consumption and save money.

It was, for example, possible to cut energy consumption in industry and the power sector by between 20% and 30%, the bank stated.