Global greenhouse gas emissions can be drastically reduced by accelerating the deployment of existing mitigation technologies in high-carbon countries. But to stabilize the world’s climate will require breakthrough technologies, technology transfer and capacity building.

Although climate-smart innovation is concentrated mostly in high-income countries, developing countries are starting to make important contributions. Developing countries accounted for 23 percent ($26 billion) of the new investments in energy efficiency and renewable energy in 2007, up from 13 percent in 2004. Eighty-two percent of those investments were concentrated in three countries—Brazil, China and India (UNEP, 2008). In 2005 China was seventh in overall renewable energy patenting and second only to Japan in geothermal and cement inventions, two major potential sources of emission reduction (OECD, 2008).

The WDR 2010 calls for increased investments in research and development and identifies policies that can stimulate innovation and entrepreneurship.

Research institutes in developing countries can help governments better prepare for the consequences of climate change. In Indonesia and Thailand, for example, NASA satellites are used to monitor environmental characteristics affecting malaria transmission in Southeast Asia, such as rainfall patterns and vegetation status.

Building absorptive capacity in developing countries so that decision-makers identify challenges and adopt appropriate technologies is also key. The Bank’s Urban Hub in Singapore provides training on sustainable cities. Another program on Climate Resilient Cities trains local governments in adaptation planning.

Quality requirements are essential to market renewable energy sources as reliable and affordable alternatives to traditional fuels. A Renewable Energy Development Program financed by the Bank in 1999 helped Chinese producers of photovoltaic systems meet high standards that would increase consumer confidence and make their products competitive in international markets. Today China is the world’s largest exporter of solar panels.

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High quality requirements can help market renewable energy alternatives to fossil fuels. The Bank’s Renewable Energy Development Program supported the sale of solar systems to approximately 400,000 households in rural China.

Regulations can provide firms with niche markets to develop new technologies and allow countries to gain a competitive edge. A ban on gasoline-propelled motorbikes in several urban cities in China in 2004, coupled with technological improvements, faster urbanization, higher gas prices and increases in purchasing power, boosted the electric bicycle market from a mere 40,000 in 1998 to 21 million in 2008. E-bikes are cleaner and now cheaper than other motorized modes of transportation including buses, and China is exporting these low-carbon vehicles to developed countries.

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