Adaptation Finance Doubles Up, The Climate-Proofing President, and More

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Today in Climate Proof:

Finance:

• Adaptation Finance Doubles Up

• Asia’s Adaptation Finance Gap

Policy:

• Trump v Harris: Who’s the Climate-Proofing President?

• UN Biodiversity Summit Disappoints on Adaptation

Tech:

• Stock Exchange Operator Offers Climate Risk Data

Research:

• Another round-up of papers and journal articles on all things climate adaptation

Adaptation Finance Doubles Up

Global finance flows for adaptation and resilience reached US$76bn in 2022, more than double the amount for 2018, new data from the Climate Policy Initiative (CPI) shows.

However, this is barely one-third of the amount needed each year from 2024 to 2030 for developing countries alone.

Public finance made up the vast majority of adaptation flows, around 92% in 2022. However, a September report from the CPI suggests at least US$4.7bn of private adaptation finance was allocated in 2022 from asset managers, banks, and specific project financiers. Even this amount is likely to significantly underestimate private flows.

Global Adaptation Finance Flows Vs Needs

As for where adaptation financing is going, the CPI says around 19% of the 2022 amount went to Least Developed Countries (LDCs) — a family of nations including Bangladesh, Cambodia, and the Solomon Islands — that are most vulnerable to climate shocks. Just 2% went to Small Island Developing States (SIDS) that are blighted by tropical storms, extreme heat, and sea-level rise risks. When it comes to the industries attracting adaptation finance, the water and wastewater sectors dominate, receiving 44% of all flows between 2018 and 2022. This finance is mainly used to alleviate water stress and combat disease. About one-third of adaptation finance went toward policy support, capacity building, and disaster-risk management.

However, the CPI admits that tracking adaptation finance remains challenging: “There is evidence that domestic governments fund adaptation through public budgets, but the bulk of this cannot yet be tracked due to limited climate budget tagging,” the report reads.

Asia’s Adaptation Finance Gap

There is an “enormous” gap between adaptation needs and finance flows in the Asia-Pacific region, a new report from the Asian Development Bank (ADB) claims.

Somewhere between US$102bn to US$431bn is required per year to climate-proof that part of the world, which is home to over 4 billion people and makes up some 45% of global GDP. In contrast, barely US$34bn of adaptation finance commitments were made in 2021 and 2022 — just 8% of the uppermost estimate of needs. Most of these commitments were domestic expenditures made by China, which has the highest adaptation need in dollar terms.

The ADB also estimates that Asia-Pacific GDP could shrink by 17% by 2070 if climate change isn’t slowed, and by 41% by 2100.

“Climate change has supercharged the devastation from tropical storms, heat waves, and floods in the region, contributing to unprecedented economic challenges and human suffering,” said ADB President Masatsugu Asakawa. “Urgent, well-coordinated climate action that addresses these impacts is needed before it is too late,” he added.

The ADB report floats a series of actions to close the finance gap. One is the integration of climate adaptation into national development and budget planning . This would create “a key entry point for climate adaptation at scale” and help build a pipeline of “bankable” adaptation projects. The report also cites the potential of blended finance instruments that combine public, private, and philanthropic capital, as well as new financial instruments, like catastrophe bonds and disaster risk insurance. 

At the country level, the ADB says that taxes and fees could be levied to spend on adaptation, which could in the long-run improve their fiscal position, since investments in climate-proof infrastructure have high cost-benefit ratios.

Mobilizing private capital flows into adaptation is also recognized as essential. Improving climate risk data, fixing government policies so that climate risks are properly priced, and expanding public-private partnerships are all raised as potential means to scale up private investment in the report. However, it concedes that this will be an uphill battle.

“Perhaps the greatest challenge is that many adaptation measures do not create revenue streams or deliver cost savings, making it difficult to repay finance or attract private investors,” the report reads.

Other Stuff

The New Collective Quantified Goal on climate finance: Quantitative and qualitative elements (United Nations Conference on Trade and Development)

Businesses may be investing more in climate adaptation than we think (Climate Home News)

Trump v Harris: Who’s the Climate-Proofing President?

Roughly 75 million Americans have already voted in what could be the most consequential climate election for a generation. By Tuesday evening, another 80 million or so are likely to have cast ballots to determine control of Congress and the White House.

The outcome of the election has profound implications for US climate adaptation and resilience, not to mention global efforts to climate-proof vulnerable populations.

Vice President Kamala Harris and a Democratic Congress are likely to consolidate and build on President Biden’s formidable climate record, one that includes an unprecedented US$50bn for climate resilience and a comprehensive initiative to protect half a billion people in developing countries from climate shocks by 2030.

The Democrats are promising continued climate-proofing investments — among them cooling centers to guard against sweltering temperatures and shelters to protect populations from extreme weather. The party has also pledged to pass a Disaster Resilience Tax Credit to help low- and middle-income families and small businesses invest in preparing for climate shocks and national disasters.

A Harris White House and Democratic Congress would also enforce and advance labor and environmental rules to protect workers from extreme heat and combat heat stress in urban environments by planting millions of trees. On the conservation front, Democrats have promised to bolster protections for Arctic regions, designate new marine sanctuaries, and protect rivers and wetlands.

Democrats are also committed to a climate opportunity economy. They want to launch an Advanced Research Projects Agency for Climate (ARPA-C) to “help find new ways of generating and storing energy, reducing emissions, and boosting climate resilience.” This would be modeled on the Defense Advanced Research Projects Agency (DARPA), an organization lauded for creating innovations including the internet and GPS. ARPA-C could potentially seed all manner of climate adaptation technologies that can be taken up and scaled by climate-proofing entrepreneurs.

Overseas, Democrats say they will lead on climate and commit to ongoing international climate finance. Under the Biden administration, the US pledged US$11bn of climate financing a year by 2024 — though it has struggled to come up with the goods from taxpayer funds. If voted into power, Harris and Democrats promise to increase funding for Biden’s PREPARE initiative  (President’s Emergency Plan for Adaptation and Resilience) and work through multilateral development banks to promote climate finance. The party also wants to support new financing instruments for adaptation and resilience, like debt-for-nature swaps.

In contrast, Donald Trump and the Republicans do not mention “climate” once in their party platform. The former president took the US out of the Paris Climate Agreement when first elected, and a campaign spokesperson has said he would do so again if elected. If returned to the White House, Trump could also remove the US from the entire United Nations Framework Convention on Climate Change, effectively abandoning global efforts to mitigate, and adapt to, climate change.

Moreover, Project 2025 — a roadmap for a Republican administration crafted by the right-wing Heritage Foundation and other conservative groups — includes plans to scrap climate regulations and gut climate-related federal agencies In addition, Project 2025 would undermine efforts to gauge climate risks to the US by breaking up and downsizing the National Oceanic and Atmospheric Administration and forcing it to “fully commercialize its forecasting operations.”

UN Biodiversity Summit Disappoints on Adaptation

The UN COP16 biodiversity conference in Cali, Colombia came to a messy end on November 2, when proceedings had to be suspended after too many delegates left. 

While progress was made adopting nature-protection and biodiversity conservation plans at the country level — and setting national targets — 152 parties have yet to submit these blueprints. The plans could be critical for climate-proofing efforts, since nature-based solutions and ecosystem preservation are important contributors to adaptation and resilience.

On biodiversity finance, the summit failed to reach consensus on a fund to support nature protection. At the previous COP in Montreal, countries pledged to increase nature protection and restoration finance to US$200bn a year by 2030. However, developing countries’ concerns with the Global Environment Facility — which oversees a series of UN-authorized climate and nature funds — led to deadlock. 

It is expected that COP16 will be reconvened virtually to sign off on administrative measures like the adoption of its budget and approval of key documents. However, key questions on finance and nature-protection monitoring will likely have to wait until the next summit for resolution.

“While there was some good news for people and nature at COP16, without full implementation of the ambitious commitments coming out of Cali, the world will not be able to halt the existential crises of climate change, biodiversity collapse and the persistent threat of epidemics and pandemics of zoonotic origin,” said Joe Walston, Executive Vice President of the Wildlife Conservation Society. “These crises are interconnected and mutually reinforcing. The destruction of nature is at the nexus of these crises and so making peace with nature is the nexus of the solution.”

Other Stuff

What will happen at COP 29? Q and A with Jennifer Bansard of Earth Negotiations Bulletin (International Institute for Sustainable Development)

2024 elections and the future of global climate ambition (Center for American Progress)

Biden will skip COP29 climate summit after election (Bloomberg)

Assessing historical extreme weather event impacts (US Department of Energy)

Water Environment Federation represents water sector at White House roundtable on water security and climate resilience (WEF)

Stock Exchange Operator Offers Climate Risk Data

Investors and analysts may soon get their hands on climate physical risk data for millions of companies through a new tie-up between global stock exchange operator ICE and data provider Dun & Bradstreet.

The climate data offering fuses insights from ICE’s geospatial intelligence platform and climate data models with Dun & Bradstreet’s private company data bank, utility spend info, and shipping and supply chain datasets. ICE’s data covers physical and transition risk information for some 110 million US properties, global public companies, and US municipalities, and more than 4.2 million bonds instruments.

The data product will be packaged in ICE Climate, a climate risk data and analytics hub for investors.

Other Stuff

Climate Tech Market - Forecasts from 2024 to 2029 (Research and Markets)

How a breakthrough gene-editing tool will help the world cope with climate change (MIT Technology Review)

Satellite imagery may help protect coastal forests from climate change (Phys.org)

Everstream Analytics launches industry-first supply chain capability: Climate Risk Scores (businesswire)

RESEARCH

The 2024 report of the Lancet Countdown on health and climate change: facing record-breaking threats from delayed action (The Lancet)

The effect of temporal data aggregation to assess the impact of changing temperatures in Europe: an epidemiological modelling study (The Lancet)

Thanks for reading!

Louie Woodall
Editor