NOAA Firings, Extra-Long Loans for Adaptation, New Climate Tech Fund Launch, and More

Finance:

• IADB Official: MDBs Must Offer Ultra-Long, Disaster-Resilient Loans for Adaptation

• UK Cuts Overseas Aid, Prompting Minister to Resign

Policy:

• Trump Admin Fires Hundreds of NOAA Staffers

• EU Unveils Climate Reg Rollback

• Farmers Sue USDA Over Purged Climate Data

Tech:

• Mazarine Launches Climate Adaptation Tech Fund

• MSCI, Swiss Re Partner on Climate Risk Analysis

Research:

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

Sponsor Message

IADB Official: MDBs Must Offer Ultra-Long, Disaster-Resilient Loans for Adaptation

Public lenders should fund adaptation by extending super-long-term loans that allow borrowers to skip payments when climate disasters strike, a senior official at the Inter-American Development Bank (IADB) has said.

“We need to use loans to fund adaptation, but we need these loans to be low cost — AAA-rated, guaranteed. We need them to be extra long term — 40 years, not 15 years. We need them to be super-flexible with disaster causes built in,” said Avinash Persaud, Special Advisor on Climate Change to the President of the Inter-American Development Bank (IADB) at a conference in Brasilia last Tuesday.

Grants and concessional finance should be reserved for loss and damage, he said, and the private sector should continue financing renewables and clean energy. Unlike climate mitigation, though, adaptation projects do not produce the “capturable private revenues” that attract commercial investors — putting the onus on multilateral development banks (MDBs) to step up. In 2023, MDBs delivered US$125bn of climate finance, of which US$24.7bn was for adaptation. The current adaptation finance gap is in the US$187-359bn range, according to the UN.

“We’ve been told many times that there’s trillions of dollars of private money waiting to come in and invest in adaptation and mitigation, if only you have the right plans, the right policies — and the money hasn’t come,” said Persaud.

His proposal would see lenders like the IADB, World Bank Group, and others leverage their high credit ratings to lend money to adaptation projects at low cost and for the long term. This should allow the borrowers to pay back the loans using the savings generated from adaptation measures. Six years ago, the World Bank said $4 in benefits could result from each $1 invested in climate-resilient infrastructure in poorer countries — for US$4.2trn in global savings overall.

Persaud said adaptation loans should also embed “disaster clauses” that allow borrowers to temporarily suspend repayments when a climate shock hits. This would help them to stave off default and free up cash for immediate disaster recovery. “We need types of loans that adjust to this new world of shocks,” he said.

UK Cuts Overseas Aid, Prompting Minister to Resign

Prime Minister Keir Starmer said the UK will reduce aid funding by nearly half, from 0.5% of gross national income to 0.3%, in order to help finance an increase in defense spending. The cuts are expected to reduce overseas aid — including for climate adaptation and resilience projects — by around £6bn (US$7.6bn) a year.

Anneliese Dodds resigned as Minister for International Development and for Women and Equalities in protest, claiming that a “tactical decision” was made for the aid budget to “absorb the entire burden” of the defense buildup. In her resignation letter, Dodds further argued that the cuts would “likely lead to withdrawal from regional banks and a reduced commitment to the World Bank … and a reduced voice for the UK in the G7, G20 and in climate negotiations.”

International climate finance is already reeling from the abrupt attempted dissolution of USAID by the Trump administration. Last week, the US State Department said 92% of foreign assistance-related grants would be axed.

In Brief

Finance in Common, a network of public development banks, urged development finance institutions to scale up climate finance at its fifth global summit, which concluded Friday. The event, in Cape Town, South Africa, hosted talks on expanding climate finance for Africa in particular, and making it easier for African countries to access development bank funds for mitigation and adaptation. Other discussions centered on the creation of innovative financing mechanisms for climate and related development priorities, and the imperative to speed up financing and implementation of green, climate-resilient infrastructure across the continent. (Finance in Common)

The European Investment Bank (EIB) has joined the Africa Finance Corporation to support a US$750mn Infrastructure Climate Resilient Fund (ICRF), which aims to accelerate climate adaptation and resilient infrastructure across Africa. With a US$52.48mn commitment, the EIB’s investment will help mobilize a potential US$3.7bn in total financing from public and private partners. The ICRF will focus on climate-resilient transport, clean energy, digital infrastructure, and industrial development while providing technical assistance to strengthen climate risk assessment and adaptation capacity across the continent. (European Investment Bank)

The IMF urged Pakistan to prioritize climate adaptation in the midst of a technical mission to the country intended to unlock around US$1bn of needed funding. The IMF financing would be provided under its Resilience and Sustainability Trust, which provides long-term concessional financing for climate adaptation and clean energy transitions. (Pakistan Today)

Trump Admin Fires Hundreds of NOAA Staffers

Mass layoffs at the US National Oceanic and Atmospheric Administration (NOAA) began last week as part of President Trump's radical effort to shrink the federal workforce.

Multiple outlets report that a first wave of firings at the climate and weather agency took place on Thursday affecting some 800 workers, and that layoffs could continue for around a week, covering 1,830 staff nationwide. Probationary employees bore the brunt of the initial round of dismissals — workers who have been on the job for a short period and have fewer employment protections than their longer-tenured peers. These include senior professionals who have recently been promoted or switched positions, as well as newly employed junior workers.

Many fired staffers spoke out about the risk to US climate resilience the mass layoffs entail. Nicole Rucker worked on NOAA’s Climate Ready Workforce Program, introduced under President Biden to support training for those working on climate resilience in underserved communities. She was laid off last Thursday, according to LinkedIn. “Federal workers don’t deserve the cruel, callous, and illegal way they are being fired with no cause or warning. Contrary to the lies told by some on the right, federal workers are high-performing individuals whose jobs are important for the sustainability of America.,” she wrote.

Scientists and climate professionals are particularly concerned about losses to the National Weather Service (NWS), a NOAA unit that provides high-quality, real-time weather forecasts to the public. “NOAA and the NWS collectively offer tens to hundreds of billions of dollars a year in net economic benefits through a combination of averted losses and efficiencies gained,” wrote Daniel Swain, climate scientist at UC Agriculture and Natural Resources. “Despite widespread discussion to the contrary, the fact of the matter is that the private sector, as it presently exists, simply cannot spin up to fill any void left by substantial dismantling of NOAA and/or the NWS,” he added.

Dismantling NOAA is a goal of Project 2025, the blueprint for a Republican administration published by the right-wing Heritage Foundation last year. This calls for NOAA to be “broken up and downsized” and for most of its existing functions to be “provided commercially”. Last week, former NOAA chief Rick Spinrad called out the Trump administration’s then-planned attack on NOAA, saying it would “kill a few thousand Americans every year.”

EU Unveils Climate Reg Rollback

European lawmakers plan to exempt most companies from the bloc’s climate risk disclosure regime as part of a dramatic shakeup of its sustainability rulebook.

Part of the so-called ‘Omnibus’ package released last week calls for the Corporate Sustainability Reporting Directive (CSRD) — which requires companies to disclose how climate shocks could impact their operations — to apply only to firms with more than 1,000 employees and €450mn (US$471mn) in turnover. This would carve out 80% of businesses from the reporting mandate, according to the European Commission.

The rejig also proposes cutting the number of data points companies have to report against and delaying implementation for those firms yet to put the regulations into effect by two years.

The Sustainable Taxonomy has been targeted for an overhaul, too. This is a system for classifying economic activities in line with the European Green Deal — the continent’s plan for a low-carbon, climate-resilient economy. Proposed changes made by the Platform on Sustainable Finance, an advisory group, could make it easier for companies to report adaptation-aligned activities, and encourage more investment in this theme. 

The European Commission is proposing to scrap some 70% of current data points under the Taxonomy that companies currently have to disclose against, and carve out from reporting those activities that are not financially material for their businesses. Moreover, Taxonomy reporting would become voluntary for firms below the 1,000 employees and €450mn turnover threshold.

Changes are also on the cards for the Corporate Sustainability Due Diligence Directive (CSDDD), a law intended to scrub bad environmental and human rights impacts from companies’ operations and supply chains. Proposed amendments would free organizations from conducting thorough due diligence assessments of indirect partners and suppliers, and prevent large companies from asking for certain data from smaller companies in their supply chains.

The Omnibus proposals are being dispatched to the European Parliament and Council for scrutiny. Changes will be implemented if and when the three legislative bodies of the EU reach an agreement.

Farmers Sue USDA Over Purged Climate Data

Farmers and environmental advocacy groups are suing the US Department of Agriculture (USDA) for what they say is an “unlawful purge” of climate information from its websites carried out by the Trump administration.

Earthjustice and the Knight First Amendment Institute at Columbia University filed the suit last Monday on behalf of The Northeast Organic Farming Association of New York, Natural Resources Defense Council, and Environmental Working Group. They argue that climate policies, guides, datasets, and resources hosted by USDA are critical to farmers’ planting and investment decision-making, and that the sudden withdrawal of this information goes against the law. 

Climate-related pages were scrubbed from the USDA website starting on January 30 by order of USDA Director of Digital Communications Peter Rhee, the complaint says. “By removing these webpages or rendering them inaccessible, USDA has hurt farmers and farm advisors who depend on the department’s digital resources to access financial and technical support for conservation practices and other agricultural decisions, researchers who depend on USDA datasets and interactive tools to study climate change and its related risks, and advocates whose mission is to educate farmers and the public about USDA programs and policies,” the complaint reads. 

Information on USDA climate adaptation programs, and associated funding opportunities, have also been rendered inaccessible by the purge. Earthjustice says loss of this information makes farmers less financially secure and more vulnerable to extreme weather events. The purge of climate-smart conservation guidance, meanwhile, could affect US food security and raise consumer prices, as farmers will be unable to source best practices for soil health and water management.

In Brief

A new survey finds that nearly half of Americans have personally experienced extreme weather in the past five years, with 72% of those affected attributing it to climate change. While many expect climate change to impact their lives, air quality, and water availability in the future, fewer feel it has already had a major effect. Public support for federal disaster aid is strong, but opinions are divided on restricting development in high-risk areas and holding oil and gas companies financially responsible. Concerns about rising property insurance costs are widespread, particularly among Democrats. (AP-NORC)

Mazarine Launches Climate Adaptation Tech Fund

Mazarine Climate, a new venture fund, has launched with a mission to back early-stage tech companies addressing climate change-induced water risks.

The fund will narrowly target climate adaptation technology (CAT) companies across three verticals: those that “see” water risks, by generating high-resolution, real-time data on floods, droughts, and contamination, those that “understand” water risks by analyzing data and modelling future hazards, and those that “manage” water risks through tech-driven solutions.

“We’re excited to debut this specialized CAT fund, built around a straightforward investment thesis: back early-stage companies with technology innovations out of the Industry 4.0 toolbox that support their clients in key sectors prepare-for, adjust-to, and ultimately deal-with water-related risks in our new climate reality,” says John Robinson, General Partner at Mazarine Climate. “Industry 4.0” refers to the array of tools and technologies — like satellites, in-situ sensors, AI, and internet-connected machines — that are refashioning how companies acquire and use data.

Robinson adds that the fund is not looking for companies in the traditional water industry, but for those addressing water risks troubling other sectors, predominantly transport infrastructure, coastal infrastructure, power generation, and finance, insurance, and real estate.

The fund is part of VC group Mazarine, set up in 2018 with a focus on tech innovations for solving water and wastewater issues. The group’s other fund, Mazarine Ventures, has 14 portfolio companies according to its website — including water filtration firm Aqua Membranes and AI-powered water plant data startup Pani.

MSCI, Swiss Re Partner on Climate Risk Analysis

MSCI is joining forces with Swiss Re to improve financial institutions’ ability to construct climate-resilient investment portfolios.

The tie-up, announced February 20, will combine MSCI’s GeoSpatial Asset Intelligence with Swiss Re’s proprietary natural catastrophe and climate risk capabilities to foster “in-depth, asset-level physical risk insights” for investors. The GeoSpatial Asset Intelligence offering, launched last year, provides granular insights into climate and nature risk to asset owners and managers — translating physical risks to financial impacts.

“We are committed to providing accurate data and best in class physical risk insights to the market, “ said Ali Shahkarami, Global Head of P&C Solutions at Swiss Re. “This cooperation will benefit financial institutions globally, aligning with our vision of making the world more resilient.”

In Brief

Bloomberg has expanded its Multi-Asset Risk Management suite (MARS) with the launch of MARS Climate, a new module designed to help portfolio and risk managers assess climate-related financial risks. The tool integrates physical and transition risk assessments, leveraging BloombergNEF’s Transition Risk Assessment Company Tool (TRACT) to model company-level revenue risks under different climate scenarios aligned with those set out by the Network for Greening the Financial System, the club of climate-focused central banks and regulators. Through MARS Climate, users can access reports assessing the financial impacts of climate-related risk down to security level — organized by physical acute (ie, extreme weather), physical chronic, and transition risk. (Bloomberg)

Cambium, a supply chain tech company for the wood industry, raised a US$18.5mn Series A round to scale its AI-powered logistics platform and expand into mass timber products. Cambium digitizes and streamlines the traditionally fragmented wood supply chain, connecting tree care services, sawmills, and manufacturers. This in turn allows them to transform salvaged wood into Carbon Smart™ Wood. The company’s latest expansion into cross-laminated timber (CLT) offers a low-carbon alternative to steel and concrete, aligning with rising demand for sustainable, locally sourced materials. The funding round was led by VoLo Earth Ventures, with participation from NEA, Dangerous Ventures, Tunitas Ventures, Woven Earth, Understorey, Groundswell and Ulu Ventures. (BusinessWire)

RESEARCH

Compounding effects of climate change and WUI expansion quadruple the likelihood of extreme-impact wildfires in California (npj Natural Hazards)

Filling the climate finance gap: holistic approaches to mobilise private finance in developing economies (npj Climate Action)

Artificial intelligence, digital social networks, and climate emotions (npj Climate Action)

Adaptation efforts may reduce harms amid significant climate-linked displacement in Sub-Saharan Africa (Migration Policy Institute)

Thanks for reading!

Louie Woodall
Editor