The report, The World Economic and Social Survey 2009 : Promoting Development, Saving the Planet was released by the UN Department of Economic and Social Affairs on Wednesday as the negotiations for a new global agreement to address climate change is on the verge of entering the final stages before the Copenhagen Climate Change Conference scheduled by the turn of 2009.

According to the report business-as-usual would not solve the problem and there is little benefits in incremental actions. Urgent and drastic actions are needed to address the issue of climate change. The report challenges the thinking that the climate problem can simply be addressed by across-the-board emission cuts by all countries from their present levels or by relying exclusively on market-based solutions to generate the needed investments.

The developing countries, the report finds, are facing “vastly more daunting challenges than those confronting developed countries and in a far more constrained environment.” Economic growth remains a priority for them, not only to reduce poverty but also to bring about a gradual narrowing of the huge income differentials with wealthy countries. “The idea of freezing the current level of global inequality over the next half century or more (as the world goes about trying to solve the climate problem) is economically, politically and ethically unacceptable,” the UN survey says.

According to the Intergovernmental Panel on Climate Change there needs to be acut in global emissions by 2050 in the range of 50% to 80%, which is equivalent to a reduction in carbon dioxide levels from roughly 40 gigatons (gt) per year (at present) to 8 to 20 Gt. Since 1950, the advanced countries have contributed as much as three-quarters of the increase in global emissions, despite accounting for less than 15% of the world's population.

Estimates cited in the report show that for every 1 degree C rise in average global temperature, annual average growth in poor countries could drop by two to three percentage points, with no change in the growth performance of rich countries. At the same time, the report notes that developed countries have per capita emissions that are still on average six to seven times greater than those in developing countries.

One of the most overlooked aspects of the climate debate , the UN survey argues, is that the energy needs of developing countries are very different from those of developed countries. The latter have adequate, even excessive, energy services and infrastructure. Most of the developing countries, on the other hand, struggle to provide even basic energy services from inadequate infrastructure. Globally, between 1.6 and 2 billion people lack access to electricity and connecting these people to energy services will cost an estimated $25 billion per year over the next 20 years, the report says.

The amount of development aid pledged by the developed countries on energy is only about $4 billion annually, where at least $10 billion is needed annually. Currently, it is estimated that about $21 billion in official development assistance is decidated each year to addressing climate change, much of this for mitigation. The total amount of climate financing that is needed is a large multiple of this figure, the report observes.

The rich and poor countries, therefore, need different mitigation strategies to address climate change. While a rise in the price of fossil fuels or changes in lifestyles may result in the increased use of renewable sources of energy in developed countries, higher fuel costs in developing countries would simply place any modern energy services beyond the means of many more people.

Market solutions, including the development of a carbon market through “cap and trade” mechanisms or taxation schemes in developed countries are not the solution for developing countries, the UN report says

“Perhaps the more sensible, forward-looking view,” the report says and adds “is to recognize that carbon markets will continue to expand but that the pace and scale will not be sufficient to help developing countries break the financial constraints on proceeding along a low-emissions development pathway.”

Saying the energy scheme as prohibitively expensive, the report says such a transformation would need “a level of international support and solidarity rarely mustered outside a wartime setting.” The report sets out a range of possible multilateral measures in support of a global investment programme, including a global clean energy fund, a global feed-in tariff regime in support of renewable energy sources, a climate technology programme and a more balanced intellectual property regime for aiding the transfer of clean technologies.

The survey argues that large upfront investments will need to be made, particularly by the public sector, in new energy infrastructure and in complimentary research and development to bring down the costs.

The report mentions varying estimates for how much additional financing is needed to address the mitigation and adaptation aspects of climate change, often depending upon on a number of factors, including the range of the greenhouse gas reduction target. These estimates can range from as little as 0.2% to 2% of the World Gross Product (WGP) or between $180 billion and $1.2 trillion per year. However, in most projections the big investment would not be required until 2030.

But the report warns that failure to make additional investments at least at least to the tune of 1% of the WGP annually or between $500 billion to $600 billion annually in the immediate future on adaptation and mitigation may result in the permanent loss of the projected WGP by 20%.#