Supermarket shelves offer a choice of two light bulbs: the standard incandescent type and the compact fluorescent type. In Bangladesh, the price difference is 20 taka compared to 450 taka. The fluorescent type will last at least 10 times as long and consume one-fifth of the energy. Overall, savings from investing in the fluorescent bulb could be 70 to 80 percent.

Most of us are familiar with this shopping dilemma. If the household budget is healthy for that week, we might invest in the more expensive bulb and look forward to long-term savings. But typically the lack of ready cash means we settle on the option that requires the smallest capital outlay.

A similar situation presents itself when countries face decisions about investments in energy, transport and industrial and agricultural systems.