LIMA - Developing countries may need as much as $250-500 billion (203-406 billion euros) per year by mid-century to deal with the fallout from climate change, a UN report warned Friday.

The projected amount was as much as five times higher than previous estimates and significantly more than today’s spending on climate adaptation, said the United Nations Environmental Programme (UNEP), which warned of a ‘significant funding gap after 2020’. ‘The impacts of climate change are already beginning to be factored into the budgets of national and local authorities,’ UNEP executive director Achim Steiner said in a statement.

‘The escalating cost implications on communities, cities, business, taxpayers and national budgets merit closer attention as they translate into real economic consequences,’ he added. In 2012-13, the amount of global public finance committed to adaptation was about $23-26 billion, said the report, of which 90 percent went to developing countries.

Adaptation support is a key sticking point at UN negotiations under way in Lima to hammer out the broad outlines of a new world pact to curb global warming. Poor countries most vulnerable to climate change-induced impacts - extreme weather events, floods, droughts and sea-level rise - are demanding that a rich nation commitment to adaptation and finance help be written into the pact. But many developed countries insist that the deal, due to be signed in Paris in December 2015 to enter into force by 2020, should focus on mitigation - meaning efforts to curb planet-warming greenhouse gas emissions. Steiner said the new report ‘underlines the importance of including comprehensive adaptation plans in the agreement.’

The UN has set a target of limiting average global warming to two degrees Celsius (3.6 degrees Fahrenheit) over pre-Industrial Revolution levels. The UN’s top climate science body, the Intergovernmental Panel on Climate Change (IPCC), has projected adaptation costs in developing countries to reach $70-100 billion per year by 2050, based largely on World Bank figures from 2010.

But the new UNEP report said this was likely a ‘significant underestimate’, even if warming can be limited to two degrees Celsius this century - which many scientists say is unlikely. New data gathered by research institutions, based on a wider and more detailed database, found that ‘at a minimum, the costs of adaptation are likely two to three times higher,’ it said.

And on some calculations, based on national-level rather than global-level studies, ‘adaptation costs could climb as high as $150 billion by 2025/2030 and $250-500 billion per year by 2050.’ ‘The report provides a powerful reminder that the potential cost of inaction carries a real price tag. Debating the economics of our response to climate change must become more honest,’ said Steiner.

‘We owe it to ourselves but also to the next generation, as it is they who will have to foot the bill.’ Gathering 195 states and the EU bloc, the 12-day Lima meeting has as one of its tasks to draft guidelines for nations when they make emissions-cutting pledges next year - commitments that are at the heart of the new pact.

The climate negotiations have been bedevilled for years by rifts between rich and poor nations over who should shoulder the burden of emissions cuts, which require a politically and financially difficult shift from cheap and plentiful fossil fuel to cleaner energy sources. The issue gained political momentum with UN Secretary General Ban Ki-moon hosting a summit in New York in September, where world leaders renewed vows to fight the scourge.

Since then, the three biggest emitters - China, the United States and Europe - have sketched plans for contributing to the carbon cleanup. Finance remains a sore point, with developing nations insisting that rich economies must show in Lima how they intend to honor promises to muster up to $100 billion (80 billion euros) in climate finance per year from 2020.

To date, nearly $10 billion in startup capital had been promised for the Green Climate Fund (GCF), the main vehicle for channelling the money. Norway said Friday it will provide $258 million to the fund over the next four years.