COP29's Adaptation To-Do List, Finance Gap Report, Desalination Tech, and More

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Today in Climate Proof:

Finance:

• Crunch Time for New Climate Finance Goal

• UN Highlights Adaptation Finance Gap

• California Approves US$10bn Climate Resilience Bond

• Climate Risk Transfer Hub Launches

Policy:

• COP29’s Adaptation To-Do List

Tech:

• Green Desalination Tech Advances

Research:

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

Crunch Time for New Climate Finance Goal

It’s game time. For UN member states, COP29 is the last and best chance to secure a New Collective Quantified Goal (NCQG) on climate finance this year — one that sets the pace for climate spending on mitigation and adaptation through 2030 and beyond.

Delegates meeting in Baku, Azerbaijan for what has been dubbed the “finance COP” have 11 days to hammer out a deal to replace the US$100bn a year pledge that expires in 2025.

The scale of the challenge is enormous. One estimate pegs the climate finance need at US$2.4trn a year for developing countries (excluding China). Civil society groups say a goal of at least US$1trn a year is necessary to curb emissions and defend countries from climate shocks. On the climate adaptation front alone, a UN analysis concludes that US$187-359bn (in 2021 prices) is required per year to protect developing countries (see below). The Climate Policy Initiative has tagged the adaptation finance gap at US$212bn per year to 2030.

Delegates haven’t exactly had a running start. High-level talks held in October failed to reach a consensus on the size, type, and contributor base of a new climate finance goal. The latest draft text out of the dedicated NCQG working group, meanwhile, sets out three vaguely defined options that are open for broad interpretation, and are likely to be subject to intense squabbling over the next week and change.

Moreover, the election of Donald Trump as the next US president has thrown that country’s participation in any climate finance effort into doubt. During his campaign, then-candidate Trump promised to pull the US out of the Paris Climate Agreement, while his aides have floated the idea of leaving the United Nations Framework Convention on Climate Change entirely. 

Heading into the summit, countries are particularly divided over whether or not the NCQG should have a multilayered structure — consisting of a “core” of public finance and an “outer layer” of investment and mobilized finance from public, private, and philanthropic actors. Member states are also at loggerheads over which countries should pay into the new goal. Developing countries were not obligated to contribute to the last climate finance target. However, this time around the US, EU, and other rich nations want wealthier developing states, like China and oil-rich gulf nations, to contribute. While China has provided climate finance on a voluntary basis to developing countries, calculated at US$45bn between 2013 and 2022 according to the World Resources Institute, its diplomats are opposed to the country being brought in-scope of the NCQG. 

Beyond how much should be targeted and who should pay, delegates are also likely to debate how climate finance should be tracked and its quality monitored. The previous US$100bn goal did not include a framework for measuring and verifying contributions, which has allegedly allowed for the double-counting of development funds as climate finance and facilitated the recycling of cash flows initially sent to developing countries back to rich nations. 

In October, ministers highlighted the importance “of setting out clear transparency arrangements” for tracking finance, which could be especially crucial if a multilayered NCQG with private sector participation is chosen, since the boundaries between private investment and climate finance are often blurred.

UN Highlights Adaptation Finance Gap

It’s becoming an all-too-familiar refrain. There is a humongous demand for finance to address developing countries’ adaptation needs, but far too little supply to meet it.

That’s the gist of the latest Adaptation Gap Report from the UN, which throws down the gauntlet on the climate finance issue as delegates amass at COP29. 

“Every country must have the means to protect themselves from climate extremes,”  said UN Secretary-General António Guterres, on introducing the report. “We need developed countries to double adaptation finance to at least US$40 billion a year by 2025 — an important step to closing the finance gap.”

Adaptation needs based on developing countries’ climate plans range from US$215bn to US$387bn a year through the end of the decade, according to the report. International public adaptation finance flows came to some US$27.5bn in 2022. This makes for a finance gap of US$187-359bn (in 2021 prices). As the report points out, even a doubling of 2022 flows would barely put a dent in this sum. A ten times increase would be closer to the mark. Last year’s report put the adaptation gap at US$194-366bn.

Comparison Of Adaptation Financing Needs, Modelled Costs And International Public Adaptation Finance Flows In Developing Countries

However, there are important caveats to these huge figures. For one, the report itself notes that “there are still not enough data on finance flows from domestic public and private sector sources” to be certain of the actual amount going toward adaptation. The Climate Policy Initiative is endeavoring to fill in the gaps, and recently concluded that private sector adaptation finance could have been triple the amount previously estimated.

Moreover, the adaptation need amounts are modelled outputs, rather than exact surveys. The range of dollar figures provided therefore reflects a number of variables, including the amount of future warming expected, how the climate models used estimate potential damages, and projections of the cost of adaptation.

In addition, real-world adaptation costs alone could vary greatly depending on the objectives of the affected countries. Those that want the highest degree of protection may have higher finance needs, but this amount of climate-proofing may come with economic trade-offs that few (if any) countries would countenance.

Still, it is clear that much more finance is necessary to climate-proof the most vulnerable countries. To help turbocharge flows, the report recommends more investment in capacity-building and technology transfer from rich nations to their poorer counterparts. It also cites a trio of “enabling factors” that could drive more private and public sector finance: new financial instruments (like debt-for-adaptation swaps), more public-backed funds and dedicated budgeting, and the spread of climate risk disclosure frameworks and adaptation taxonomies. 

The report acknowledges that engaging private investors on adaptation remains challenging. While the overall economic case for adaptation investment, linked to its benefits to social welfare and well-being, is clear, the financial case is harder to make to return-oriented investors “as adaptation often does not generate positive cash flows or revenues.”

California Approves US$10bn Climate Resilience Bond

Climate was on the ballot in five states last Tuesday, and the results show ongoing voter appetite for meaningful climate action — below the presidential level, at least.

Of most interest to climate-proofers was California’s approval of a US$10bn climate resilience bond, which allows the Golden State to finance water security projects, drought, flood, and wildfire protection measures, and much more by borrowing from the capital markets. The ballot measure passed 59% to 41%.

“This result demonstrates voters want California to be at the forefront of climate action because our health, lives, and livelihoods are at risk,” said Katelyn Roedner Sutter, California State Director at the Environmental Defense Fund. “Voters understand the wisdom of investing in proven solutions now to keep costs down for taxpayers and families instead of waiting to pay more later when disaster strikes,” she added.

The pro-climate bond campaign rallied civil society groups and water utility associations to the cause, and the ‘Yes’ campaign also secured the endorsement of the state’s most prominent newspapers. “It will save the state and Californians in the long run to invest now to gird against the growing and inevitable impacts of climate change,” the Los Angeles Times declared.

Proceeds from the bond issuance should cover some of the climate gaps in California’s budget.  Earlier this year, Governor Gavin Newsom slashed climate spending as part of an effort to balance the state’s books. Among the items junked was US$438mn for “watershed climate resilience programs”, and US$110mn for extreme heat resilience.

Climate Risk Transfer Hub Launches

Climate change is making the world more risky. This presents an opportunity for those financial engineers skilled at packaging, pricing, and moving risk from those less able to bear it to those better equipped to do so.

Insurance for Good is a new non-profit committed to improving the art of risk transfer in an age of escalating climate and environmental challenges. Founded by Dr. Carolyn Kousky, Acting Chief Economist at the Environmental Defense Fund, the group plans to become a hub for risk transfer practitioners, where top-quality resources and best practices can be created and shared.

Initially, Insurance for Good will focus on providing shared and curated resources, developing capacity-building programming, fostering and accelerating “open source innovation” on risk transfer, and supporting policy and regulatory reform to ensure risk transfer markets support society. 

“Insurance for Good is a foundation for positive change, for improved risk management, and a platform to adapt and reinvent risk transfer to work in a changing, and increasingly challenging, environment,” wrote Kousky in the group’s inaugural blog.

Other Stuff

Doubling adaptation finance: Efforts to respond to the call of the Glasgow Climate Pact (UNFCCC)

2024 Global Investor Statement to Governments on the Climate Crisis (UNEP FI)

Report of the Adaptation Fund Board: Note by the Chair of the Adaptation Fund Board (UNFCCC)

Greening private finance for nature-based solutions (Atlantic Council)

The climate finance conundrum (Moody’s)

Why everyone exaggerates “climate finance” (Brookings Institution)

Innovative finance to ensure stability in the face of adverse climate change impacts (Perry World House)

Advancing climate finance for climate-resilient sanitation (International Institute for Sustainable Development)

Solomon Islands launches financing initiative for community-led climate adaptation with support from New Zealand, EU, and UNCDF (Delegation of the European Union to the Pacific)

New York Governor Hochul announces up to US$20mn in funding available to eligible homeowners for resiliency repairs and upgrades (New York State)

Pakistan launches ‘Climaventures’: A US$50m push for climate innovation, investment (The Nation)

COP29’s Adaptation To-Do List

This may be the “finance COP”, but that does not mean other issues will go by the wayside in Baku. There’s plenty for delegates to wrestle with on mitigation, loss and damage, and — of course — adaptation and resilience.

Indeed, this summit could yield important results on adaptation planning, target-setting, and progress tracking. High on the agenda is advancing the Global Goal on Adaptation (GGA), which was written into the Paris Agreement nine years ago but has yet to be fully fleshed out after successive rounds of negotiations. The GGA is supposed to strengthen countries’ climate resilience and reduce their vulnerability to climate shocks, while boosting their “adaptive capacity” and supporting sustainable development.

At the 2022 climate summit in Sharm El Sheikh, Egypt, parties adopted a framework for operationalizing the GGA, including 30 global adaptation outcomes targeted for 2030. Last year, at COP28 in Dubai, further efforts were made to define adaptation metrics and targets related to seven themes — water, food systems, health impacts, ecosystems and biodiversity, infrastructure and human settlements, poverty, and cultural heritage — and to four elements of the adaptation cycle: climate risk and vulnerability assessments; planning; implementation and monitoring; and evaluation and learning. But ultimately delegates punted the issue to a dedicated work program, which has until 2025 to develop progress indicators for the chosen adaptation outcomes.

Still, the GGA will not be skipped over this COP. This Wednesday, Azerbaijan’s delegation will host a high-level roundtable on scaling finance in support of the goal. Parties will also review the work program’s efforts to date, and could agree to identify a universal set of adaptation indicators that all countries could use, as floated at the Bonn talks earlier this year. This is a big lift, though — over 5,300 potential indicators were submitted by countries, UN agencies, and civil society organizations ahead of this year’s summit.

There’s also progress to be made on National Adaptation Plans (NAPs). These are developing country-level blueprints for addressing adaptation needs through dedicated strategies and programs. As of November 11, 59 countries had submitted NAPs to the UN, while around 140 had started the drafting process. At COP29, delegates will conclude their first assessment of NAPs, with an eye on refining and strengthening these plans and teasing out best practices for countries to learn from.

A UN paper dated November 4 notes that progress drafting and enacting NAPs “remains low” and that many plans “are only in the early stages of implementation.” For example, of the 58 NAPs analyzed, only 33 indicate the costs of implementing adaptation actions. The International Institute for Sustainable Development (IISD), a think tank, says COP29 “must signal the urgent need” to speed up adaptation and invest in the transition from adaptation planning to implementation.

A high-level discussion on NAPs is scheduled for November 19, hosted by the COP29 presidency and the US.

Other Stuff

Rising to the challenge: Success stories and strategies for achieving climate adaptation and resilience (World Bank Group)

World Health Organization demands urgent integration of health in climate negotiations ahead of COP29 (World Health Organization)

Half of world’s biggest cities to face severe climate risks by 2050, LSEG finds (Edie)

Green Desalination Tech Advances

Water scarcity is a lived reality across vast tracts of the globe, and climate change is expanding the scope and severity of this hazard. The UN estimates that some 5.5bn people — 72% of the world’s population — are water insecure, and that 8% are critically water deprived. 

Desalination technology, which makes salt water drinkable, offers respite for these gasping billions. However, there are two challenges to scaling this tech: cost and sustainability. 

Engineers at Arizona State University, led by Tiezheng Tong, an Associate Professor of Environmental Engineering in the School of Sustainable Engineering and the Built Environment, are working to overcome these obstacles. They are adapting existing desalination methods to optimize performance for inland cities — like Arizona’s own Phoenix. 

Their approach combines nanofiltration — the use of special membranes that remove most, but not all, salts in brackish water — with reverse osmosis, which is effective at removing dissolved salts and minerals from liquids. This hybrid method aims to maximize the volume of desalinated water and cut down on waste brines. It’s powered by a high-efficiency heat pump and special fiber-based crystallizer to lower the system’s carbon footprint.

The objective is to create a green, low-cost desalination solution that can relieve water scarcity in inland regions where undrinkable brackish water is plentiful.

“By collaborating with experts in social sciences, renewable energy, economics and environmental life cycle analysis, we can achieve zero liquid discharge in a way that will provide meaningful results and minimize any potentially harmful environmental impacts,” Tong told ASU News.

Other Stuff

Autonomous tech is coming to farming. What will it mean for crops and workers who harvest them? (AP News)

How technology is being used to preserve memories at risk from climate disasters (CBS)

US Department of Defense climate change assessment tool to focus on immediate forecasts (AFCEA International)

RESEARCH

Misguided negative adaptation narratives are hurting the poor (Science)

Perspectives on the quality of climate information for adaptation decision support (Climatic Change)

Designing global indicators: The need for Health Equity (Wellcome)

Experimental coral reef communities transform yet persist under mitigated future ocean warming and acidification (PNAS)

Linkages between WASH, climate change, food security and ecosystems (WaterAid)

Localizing climate adaptation planning in Kenya’s refugee-hosting counties (Refugees International)

Can microbiome adaptations protect crops from pests and climate change? (PNAS)

Thanks for reading!

Louie Woodall
Editor