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Spending more on climate change research could put hundreds of thousands of lives at risk by stripping away precious global health funding, Bill Gates has said.

In his 2010 Annual Letter — the second of its kind, released yesterday (25 January) by the Bill &Melinda Gates Foundation — the philanthropist warned that aid budgets may shrink not only because of recession-related shortfalls but because of a shift towards research targeted at dealing with climate change.

He highlighted the climate accord of last year's Copenhagen conference, in which rich countries pledged to give developing countries US$10 billion annually over the next three years, and as much as US$100 billion per year by 2020.

"If just one per cent of the US$100 billion goal came from vaccine funding then 700,000 more children could die from preventable diseases," Gates wrote.

"In the long run, not spending on health is a bad deal for the environment because improvements in health, including voluntary family planning, lead people to have smaller families, which in turn reduces the strain on the environment."

Gates also defended the foundation's decision to not channel resources into tackling climate change and said that private investment in new carbon-free energy technologies is the way forward.

"There's this multi-trillion dollar market and yet the investments in totally new breakthroughs are surprisingly small," he told the Financial Times yesterday, adding that the key to climate change mitigation is finding a carbon-free way of producing electricity that is cheaper than coal.

"There will be a huge market for this and governments should supply large amounts of funding for basic research and development (R&D)… I am surprised that the climate debate hasn't focused more on encouraging R&D since it is critical to getting to zero emissions."

Gates also expressed fears in his letter that rich countries will slash or freeze aid budgets. "Because of budget deficits, there is significant risk that aid budgets will either be cut or not increase much. Many [government deficits as a percentage of GDP] represent unprecedented peacetime deficits," he said.

Gates said that the effectiveness of aid is not well-publicised. "We need to get the successes to be far more visible than they are today."

The letter, which this year focuses on innovation, also details the foundation's activities in childhood disease prevention, the fights against HIV and malaria, and the use of farming techniques for boosting agricultural productivity.

Link to full 2010 Annual Letter