The latest World Development Report finds that although many countries in the East Asia and Pacific region are vulnerable to climate change, developing countries can shift to lower-carbon paths while promoting development and reducing poverty if they receive financial and technical assistance from high-income countries

World Development Report 2010: Development in a Changing Climate, released in advance of the December meetings on climate change in Copenhagen, says that advanced countries, which produced most of the greenhouse gas emissions of the past, must act to shape our climate future. If developed countries act now, a 'climate-smart' world is feasible, and the costs for getting there will be high but still manageable. Ramping up funding for mitigation in developing countries where most future growth in emissions will occur is vital.

"Countries must act now, act together and act differently on climate change," said World Bank President Robert B. Zoellick. "Developing countries are disproportionately affected by climate change - a crisis that is not of their making and for which they are the least prepared. For that reason, an equitable deal in Copenhagen is vitally important."

Countries need to act now because today's decisions determine both the climate of tomorrow and the infrastructure and built-environment choices that shape the future. Countries need to act together because no one country can take on the interconnected challenges posed by climate change, and global cooperation is needed to improve energy efficiency and develop new technologies. Countries need to act differently, because business-as-usual could put the world onto a potentially catastrophic path with unacceptable costs to development.

Developing countries will bear most of the costs of the damage from climate change. Many people in developing countries live in physically exposed locations and economically precarious conditions, and their financial and institutional capacity to adapt is limited, says the report. Over half the countries in the East Asia and Pacific region are Pacific island nations, a number of which may not exist in 50 years on the current global climate path. Already, policymakers in some developing countries note that an increasing amount of their development budget is being diverted to cope with weather-related emergencies.

In the East Asia and Pacific region, the report finds three major drivers of climate vulnerability:

1. The large number of people living along the coast and on low-lying islands-for example over 130 million people in China, roughly 40 million in Vietnam and around 2 million Pacific Islanders, many of whom live on low lying islands and atolls.

2. 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, urbanization, and environmental degradation caused by rapid industrialization-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.

3. The regional economies' high dependence on marine resources. The value of well-managed coral reefs is $13 billion in Southeast Asia alone-which are already stressed by industrial pollution, coastal development, overfishing, and runoff of agricultural pesticides and nutrients.

For developing countries to achieve the shift to a lower-carbon world depends on financial and technical assistance from high-income countries, the report says. High-income countries also need to act quickly to reduce their carbon footprints and boost development of alternative energy sources to help tackle the problem of climate change.

The report cites examples of strong action to combat climate change in the region. The Chinese government has taken the most aggressive energy efficiency campaign and has the largest renewable energy capacity in the world. Its target of a 20 percent reduction in energy intensity from 2005 to 2010 would reduce annual CO2 emissions by 1.5 billion tons by 2010, five times the 300-million-ton reduction of the European Union's Kyoto commitment. In Rizhao, a city of 3 million people in northern China, skyscrapers are built to use solar power, and 99 percent of Rizhao's households use solar-power heaters. In total, the city has over 500,000 square meters of solar water heating panels. As a result, energy use has fallen by nearly a third and CO2 emissions by half. Meanwhile, the Philippines and Indonesia have the world's second and third largest geothermal capacities respectively.

The remarkable high economic growth in East Asia and Pacific, accompanied by rapid urbanization, deforestation and land use changes, comes at a heavy environmental price. Coal still dominates the energy mix in the region and most countries-whose average per capita emissions remain a fraction of those of high-income countries-need massive expansions in energy, transport, urban systems, and agricultural production. Sustaining growth using high-carbon technologies will produce more greenhouse gases, hence more climate change.

"Solving the climate problem requires a transformation of the energy systems towards higher energy efficiency and more low-carbon technologies," Justin Lin, World Bank Chief Economist and Senior Vice-President, Development Economics. "It is in the interests of developing countries to act now to avoid locking into high-carbon infrastructure."

The World Bank Group's "Strategic Framework for Development and Climate Change" emphasizes mitigation and adaptation initiatives in its lending, while recognizing that developing countries need to encourage economic growth and reduce poverty. Investments in renewable energy, energy efficiency, and climate adaptation projects are growing.

The number of World Bank-financed studies that help client countries plan and implement low-carbon growth strategies are also growing, and the Bank Group's energy financing is increasingly turning towards renewable energies and energy efficiency. In the East Asia & Pacific region, the Bank has completed several studies on the impacts of climate change and vulnerabilities to natural disasters and is increasing its support for climate change adaptation.