In a move that is likely to bolster the negotiating position of emerging economies, such as China and India, World Bank president Robert Zoellick echoed their view that the onus was on rich nations to deliver an “equitable deal” at the upcoming UN climate change conference in Copenhagen that acknowledges their historic responsibility for global warming.
“Developing countries are disproportionately affected by climate change – a crisis that is not of their making and for which they are the least prepared,” he said.
The report recommends that by 2030 rich nations will need to invest $400bn a year to help developing nations cut emissions through the adoption of new low carbon technologies and $75bn a year to help them adapt to the impact of climate change, in addition to the hundreds of billions of dollars of R&D investment that will be required to develop cost-effective clean technologies.
The scale of the sums involved are an order of magnitude higher than those currently being considered by many rich nations. For example, to date the only offer of climate change investment made as part of the Copenhagen process is UK prime minister Gordon Brown’s proposal that rich nations invest $100 billion a year to help poorer nations cut emissions.
Justin Lin, World Bank chief economist, warned that without increased investment from developed economies poorer nations would find themselves unable to cope with the impacts of climate change. “Developing countries, which have historically contributed little to global warming, are now, ironically, faced with 75 to 80 per cent of the potential damage from it,” he said. “They need help to cope with climate change, as they are preoccupied with existing challenges such as reducing poverty and hunger and providing access to energy and water.”
The report also claims that such investments will make economic sense for industrialised economies, arguing that the cost of addressing climate change will only rise as “more and more investments are made in the wrong kinds of infrastructure and energy”.
The report is likely to be welcomed by green groups, many of whom have long complained that the World Bank has been guilty of undermining investment in low carbon technologies in the developing world by favouring carbon intensive projects.
For example, the bank has faced consistent criticism for funding coal projects and it recently suspended investment in the palm oil sector after an investigation found that it had provided financing to a company allegedly linked to rainforest deforestation.
The Bank said that it has improved its record of investment in clean technologies, increasing financing for renewable energy and energy efficiency projects in developing countries by 24 per cent in the fiscal year 2009 to over $3.3bn, a record high. It added that renewable energy and energy-efficiency projects last year made up over 40 per cent of the $8.2bn of energy financing provided by the bank, although critics will point out that 60 per cent of fina ncing is still funnelled into conventional energy projects.