Developing countries will have to bear the brunt of the extensive environmental damages caused by climate change, according to a World Bank report.

The World Development Report 2010, released to the media, said: "Climate change must urgently be addressed as it threatens all countries, with developing countries being the most vulnerable. Estimates are that they would bear some 75 per cent to 80 per cent of the costs of damages caused by the changing climate."

Julia Bucknall, Lead Natural Resources Management Specialist, World Bank, told Emirates Business: "Developing countries will be the worst hit mainly because the share of agriculture in their GDP is large.

"The climate change will definitely affect agriculture, hitting the economies of these countries. They do not have major financial resources, so when a disaster takes place the impact is higher and their capacity to adapt is low.

"Most developing countries lack sufficient financial and technical capacities to manage increasing climate risk. And most are in tropical and sub-tropical regions, which are already subject to highly variable climate."

According to the report, a rise of even 2C in temperature above pre-industrial level – the minimum the world is likely to experience – could result in permanent reductions of four to five per cent in the GDP for African and South Asian countries.

" In 2001, scientists from around the world said a rise of 5C was the danger mark but six years down the line, with better and more accurate technology to measure the impact of global warming on the environment, they say that even 2C rise is dangerous," Bucknall said.

Among others, the biggest threat of the climate change will be to food security as only a few countries produce and export food while majority of them depend on imports.

Bucknall said: "If agriculture gets hit then it will cause problems for countries like the UAE, which import almost 50 per cent of their food. Countries, which have a heavy concentration of population and economic activity in flood and storm prone coastal zones, are also vulnerable.

"However, I am very impressed by the UAE and the GCC, which are oil-based economies trying to make such major efforts to diversify into the field of clean energy. Here they are innovating in the clean energy field, which is very significant and provides a great impetus to the world.

"In fact, they have a major business opportunity here. They can create a grid of concentrated thermal power projects and sell it to Europe."

According to the report, economic growth alone is unlikely to be fast or equitable enough to counter threats from climate change, particularly if it remains carbon intensive and accelerates global warming.

So climate policy cannot be framed as a choice between growth and climate change. In fact, climate-smart policies are those that enhance development, reduce vulnerability, and finance the transition to low-carbon growth paths.

The report says a climate-smart world is within our reach if we act now, act together, and act differently than we have in the past.

Acting urgently is essential, or else options disappear and costs increase as the world commits itself to high-carbon pathways and largely irreversible warming trajectories. Climate change is already compromising efforts to improve standards of living and to achieve the Millennium Development Goals.

Staying close to a rise of 2C above pre-industrial level – likely the best that can be done – requires a veritable energy revolution with immediate deployment of energy efficient and low-carbon technologies, accompanied by massive investments in their research without which low-carbon growth cannot be achieved.

Immediate steps are needed to minimise the costs of climatic changes to people, infrastructure and ecosystems today as well as to prepare for the greater changes in store.

Acting together is key to keeping the costs down and effectively tackling both adapta- tion and mitigation. However, the process has to start with high-income countries taking aggressive strides to reduce their own emissions. That would free some "pollution space" for developing countries, but more importantly, it would stimulate innovation and the demand for new technologies, which can be then scaled up.

It would also help create a sufficiently large and stable carbon market. Both these effects are critical to enable developing countries to move to a lower carbon trajectory while rapidly gaining access to the energy services needed for development, although they will need to be supplemented with financial support. But acting together is also critical to advance development in a harsher environment – increasing climate risks will exceed communities' capacity to adapt.

National and international support will be essential to protect the most vulnerable through social assistance programs, to develop international risk-sharing arrangements, and to pro-mote the exchange of knowledge, technology, and information.

Acting differently is required to enable a sustainable future in a changing world. In the next few decades, the world's energy systems must be transformed so that global emissions drop 50 per cent to 80 per cent. Infrastructure must be built to withstand new extremes. To feed three billion more people without further threatening the already stressed ecosystem, agricultural productivity and efficiency of water use must improve.

Only long-term, large-scale integrated management and flexible planning can satisfy increased demands on natural resources for food, bio-energy, hydropower, and ecosystem services while conserving bio-diversity and maintaining carbon stocks.

Robust economic and social strategies will be those that take into account increased uncertainty and enhance adaptation to a variety of climate futures – not just "optimally" cope with the climate of the past. Effective policy will entail jointly evaluating development, adaptation, and mitigation actions, all of which draw on the same finite resources (human, financial, and natural).

An equitable and effective global climate deal is needed. Such a deal would recognise the varying needs and constraints of developing countries, assist them with the finance and technology to meet the increased challenges to development. It will also ensure they are not locked into a permanently low share of the global commons and establish mechanisms that decouple where mitigation happens from who pays for it.


Economics of change

Economists have typically tried to identify the optimal climate policy using cost-benefit analysis.

In the major models, the benefits of stabilisation exceed the costs at 2.5C warming (though not necessarily at 2C). And all conclude that business as usual (meaning no mitigation efforts) would be disastrous.

Advocates of a gradual reduction in emissions would accept continuing increases in temperatures above 2C. They conclude that the optimal target – the one that will produce the lowest total cost [the sum of impact, mitigation, and adaptation costs] – could be well above 3C. But they do note that the incremental cost of keeping warming around 2C would be modest, less than half a per cent of GDP. In other words, the total cost of the optimal solution is not much more than the total costs implied by the more ambitious option of 2C warming. Partly because the savings from less mitigation are offset by the value of co-benefits so the net cost to the world economy is therefore likely to be much lower.



Impact of climate change on Earth

The problems common to developing countries – limited human and financial resources, weak institutions – are critical drivers of their vulnerability.

But other factors, attributable to their geography and history, are also significant.

Middle East And North Africa

Water is the major vulnerability in the world's driest region, where per capita water availability is predicted to halve by 2050 even without the effects of climate change. The region has few attractive options for increasing water storage, since close to 90 per cent of its freshwater resources are already stored in reservoirs. The increased water scarcity combined with greater variability will threaten agriculture, which accounts for some 85 per cent of the region's water use. Vulnerability is compounded by a heavy concentration of population and economic activity in flood-prone coastal zones and by social and political tensions that resource scarcity could heighten.

Sub-Saharan Africa

Suffers from natural fragility (two- thirds of its surface area is desert or dry land) and high exposure to droughts and floods, which are forecast to increase with further climate change.

The region's economies are highly dependent on natural resources. Biomass provides 80 per cent of the domestic primary energy supply.

Rainfed agriculture contributes some 30 per cent of GDP and employs about 70 per cent of the population.

South Asia

Suffers from an already stressed and largely degraded natural resource base resulting from geography coupled with high levels of poverty and population density. Water resources are likely to be affected by climate change, through its effect on the monsoon, which provides 70 per cent of annual precipita-tion in a four-month period, and on the melting of Himalayan glaciers. Rising sea levels are a dire concern in the region, which has long and densely populated coastlines, agricultural plains threatened by saltwater intrusion, and many low-lying islands.

East Asia and the Pacific

One major driver of vulnerability is the large number of people living along the coast and on low-lying islands – more than 130 million people in China, and roughly 40m, or more than half the entire population, in Vietnam. A second driver is the continued reliance, particularly among the poorer countries, on agriculture.

As pressures on land, water, and forest resources increase – as a result of population growth, urbanisation, and environmental degradation caused by rapid industrialisation – greater variability and extremes will complicate their management. In the Mekong River basin, for example, the rainy season will see more intense precipitation, while the dry season lengthens by two months. A third driver is that the region's economies are highly dependent on marine resources – the value of well- managed coral reefs is $13 billion (Dh47.7bn) in Southeast Asia alone – which are already stressed by industrial pollution, coastal development, overfishing, and runoff of agricultural pesticides and nutrients.

Eastern Europe and Central Asia

Vulnerability to climate change is driven by a lingering Soviet legacy of environmental mismanagement and the poor state of much of the region's infrastructure. An example: rising temperatures and reduced precipitation in Central Asia will exacerbate the environmental catastrophe of the disappearing Southern Aral Sea (caused by the diversion of water to grow cotton in a desert climate), while sand and salt from the dried-up seabed are blowing on to Central Asia's glaciers, accelerating the melting caused by higher temperature.

Latin America And The Caribbean

Most of their critical ecosystems are under threat. First, the tropical glaciers of the Andes are expected to disappear, changing the timing and intensity of water available to several countries, resulting in water stress for at least 77 million people as early as 2020 and threatening hydropower, the source of more than half the electricity in many South American countries.

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