Stiell Calls on World Bank, IMF to Step Up Climate Finance, Biodiversity COP Kick-Off, and More

Sponsor Message

Europe’s first major event dedicated to advancing corporate adaptation to climate change is taking place on November 6 in Berlin, Germany,

In-person and virtual participation tickets are available — but places are limited. Secure your spot today, and use CP_THESHIFT24 at checkout for 20% off.

Today in Climate Proof:

Finance:

• UN Climate Chief Lays COP29 Finance Marker

• US Hurricanes Weigh on Public Debt Issuers

• US$41 billion of World Bank climate finance missing, Oxfam claims

Policy:

• Biodiversity COP has Implications for Adaptation

• EU Adaptation Efforts Slipping Behind Growing Hazards

• EU Signs Off on COP29 Stance

Tech:

• Biden All in on Climate-Resilient Grid Upgrades

Research:

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

UN Climate Chief Lays COP29 Finance Marker

“COP29 must be the stand-and-deliver COP” when it comes to climate finance, UN climate chief Simon Stiell has said.

Speaking last Thursday at the Brookings Institution, the US think tank, Stiell stressed the importance of scaling up public and private finance for climate goals. His comments come less than a month before the start of COP29 in Baku, where a New Collective Quantified Goal (NCQG) on climate finance will be hammered out to replace the US$100bn-per-year goal that expires at the end of this year. 

Stiell also urged international financial institutions to ramp up their provision of climate finance. This week, the annual meetings of the IMF and World Bank Group are taking place in Washington, DC, where finance ministers will explore ways to expand support for climate efforts. They will also discuss how to manage the debt burdens of developing countries so that they can invest more in climate protection.

“Debt relief and introducing more climate-related debt clauses are a start,” said Stiell. “So is replenishing the World Bank’s International Development Association,” a facility that provides grants and low-interest loans to poor countries.

Last week, the World Bank announced a reform package that could expand its financing for development goals by US$150bn over the next decade. In September, the bank said it had delivered 10% more climate finance this fiscal year — US$97bn in total. The International Bank for Reconstruction and Development and International Development Association provided US$3bn in fiscal year 2024, of which US$10.3bn backed investments in adaptation and resilience.

“We must see further signals that the World Bank and IMF are committed to ensuring developing countries have funds and the fiscal space for climate action and investment, not devastating debts and sky-high costs of capital,” said Stiell.

US Hurricanes Weigh on Public Debt Issuers

The one-two punch of Hurricanes Helene and Milton augurs ill for US states, municipalities, and public utilities that sell debt into the capital markets, S&P Global Ratings says.

In a note, analysts at the credit rating agency say that “a shift to inland damage” from where major storms make landfall could force local authorities to spend more on climate-resilient infrastructure and disaster preparedness, putting pressure on their finances. Moreover, if climate-driven disasters overwhelm certain areas, insurers could pull out and populations flee — shrinking local governments’ revenue bases.

“Robust economic growth and demographic trends have bolstered credit quality across the Southeastern US, but with sustained increases in housing costs from higher insurance premiums and property tax increases required to support infrastructure investments, governments may face revenue challenges if an electorate is unwilling or unable to raise taxes,” the note reads.

The analysts add that in their view, Hurricane Helene's impact on infrastructure in certain regions could slow recovery efforts and, in turn, the ability of their economies to bounce back. “This creates uncertainty about the storm's impact on long-term credit quality for some local governments,” the note reads. The storm’s devastation could also choke revenues to water and sewer utilities if residents leave the worst-hit areas en masse.

US$41 billion of World Bank climate finance missing, Oxfam claims

Up to US$41bn of World Bank financing earmarked for climate efforts may have instead been spent on other projects, new analysis from the nonprofit Oxfam claims. The group argues that better tracking of expenditures is necessary to get a true picture of the bank’s climate portfolio.

Oxfam analyzed World Bank climate spending for the period 2017 to 2023, and found that actual expenditures differed from budgeted amounts by 26-43%. This equates to US$24.28–US$41.32bn of ‘missing’ spending.

“[W]ithout a full understanding of how much of what the Bank claims as climate finance at the project approval stage becomes actual expenditure, it is impossible to track and measure the impacts of the Bank's climate co-benefits in practice,” the Oxfam analysis reads.

World Bank Targeted And Reported Climate Finance

“The Bank should improve its reporting practices, undertake a climate finance assessment on closed projects, standardize how it reports on climate finance in projects and create a public climate finance database,” it adds.

Oxfam explains that the missing billions are due to how the World Bank monitors spending. The institution only publishes the amount of climate finance a project is estimated to include before it is actually approved and implemented. It does not conduct ex post analyses of projects to clarify the actual amount of climate finance delivered. 

“With this level of information, it is impossible to determine whether the Bank is truly stepping up its climate investments,” the Oxfam analysis reads.

Other Stuff

Spotlight on COP29: Scaling up private climate finance in developing countries (Imperial College London)

Physical climate risk assessment and management: An investor playbook (UNEP FI)

Pakistan secures US$10mn for innovative climate solutions (WION)

South Africa mulls rules for catastrophe bonds, climate cover (Bloomberg)

European Investment Bank and Morocco’s Office National des Chemins de Fer sign technical assistance arrangement to adapt railways to climate change (European Investment Bank)

Accelerating Climate Change Financing in the People’s Republic of China (Development Asia)

New York Governor Hochul announces US$60mn awarded to transformational green infrastructure projects that combat the effects of climate change in New York State (Governor Kathy Hochul)

Commonwealth insurance markets collaborate on global insurance protection gap (Insurance Council of New Zealand et al) 

Biodiversity COP has Implications for Adaptation

Today marks the start of the UN Biodiversity Summit, known as COP16, in Cali, Colombia. Over the next two weeks, delegates from almost 200 countries will debate how to operationalize the Kunming-Montreal Global Biodiversity Framework (GBF) and achieve ambitious nature-protection targets.

What’s agreed in Colombia could have important knock-on effects for global climate adaptation and resilience efforts. For example, the National Biodiversity Strategies and Action Plans (NBSAPs) expected from countries are supposed to spell out how governments will conserve nature and protect ecosystems — which act as important buffers against climate risks.

However, only 31 out of 195 countries had filed a NBSAP with the UN biodiversity secretariat as of Friday. This makes it challenging to map out progress toward GBF goals. 

Heading into the summit, European Union negotiators made clear they want biodiversity loss and climate change to be dealt with “in an integrated manner” so as to support “the accelerated implementation of nature-based solutions”, which are seen as essential components of a country's adaptation response. 

EU Adaptation Efforts Slipping Behind Growing Hazards

European countries’ work on adaptation risks being outpaced by escalating climate shocks, an audit of the EU’s adaptation framework has found.

The report from the European Court of Auditors (ECA) says that while the bloc’s framework is robust on the whole, there are issues with the way policies are implemented on the ground and how member states report on their progress. In a sample of 36 projects assessed, 19 were found to address climate risks “effectively”, 13 had “little or no impact on adaptive capacity” and two are at risk of promoting maladaptation.

“If the implementation of EU action does not improve, there is a risk that EU adaptation ambitions may not keep pace with climate change,” said Klaus-Heiner Lehne, the ECA Member responsible for the audit.

What Obstacles Does Your Municipality Face In Meeting Climate Adaptation Needs?

The audit says EU countries “do not provide quantitative assessments of progress and do not use common basic indicators” when reporting information on their own national adaptation plans. This makes it hard to gauge progress on implementation at the EU level.

Moreover, some member states were found to use “outdated scientific data” and all the countries assessed directly by the ECA either underestimated or omitted the cost of adaptation actions in their strategies and plans. The member states audited were Austria, Estonia, France, and Poland.

The ECA also published the results of an adaptation survey of 318 municipalities in these member states. When asked what obstacles they face meeting climate adaptation needs, 246 said "insufficient financial resources”, 150 “insufficient administrative capacity” and 134 “bureaucratic obstacles”.

EU Signs Off on COP29 Stance

The EU council committed “to respond to the urge” to double rich countries’ provision of adaptation finance to developing countries by 2025 as part of its COP29 negotiation approach.

The agreed-upon stance, which was finalized last Monday, will see EU officials head to Baku with a mandate to push for increased financing for adaptation and resilience. They will also stress “the critical role” of concessional and domestic public finance to “supporting and leveraging adaptation efforts.” This negotiating position follows on from the EU’s agreement on ways forward for the New Collective Quantified Goal on climate finance published earlier this month.

Beyond finance, the EU will encourage COP29 states to press forward on the Global Goal on Adaptation, a broad effort to provide a framework and targets for adapting developing countries to climate shocks. Ministers will also call on parties “to make greater efforts to integrate and mainstream climate change adaptation and resilience into relevant and existing policies, sectors, programmes and activities.”

Also of note, the negotiating stance calls for COP29 to deliver agreements that keep the 1.5°C temperature goal “within reach”, recognizing that limiting global heating is essential to “[preserving] our capacity to adapt.”

Other Stuff

Greater investment in climate services for health needed for escalating challenges (World Meteorological Association)

The great environmental divide — what to expect from the Harris and Trump administrations (BakerHostetler)

How Natural England is working with partners to improve rural flood resilience (Natural England)

Every fraction of a degree counts: Time for governments and business to double down on climate action (World Economic Forum)

Biden All in on Climate-Resilient Grid Upgrades

The Biden Administration has pledged US$2bn to harden the US power grid against extreme weather events with new infrastructure and technology upgrades.

The Department of Energy (DOE) said last Thursday that the financing will support 38 projects in 42 states, including the six announced by President Biden on October 13 for communities ravaged by Hurricanes Helene and Milton.

The projects, selected through the DOE’s Grid Resilience and Innovation Partnerships (GRIP) Program, will soup up more than 950 miles of power lines and add “grid-enhancing technologies” to 650 miles. Among the 38 projects are programs to better safeguard Arizona Public Service Company (APS) from wildfire risks, improve the storm resilience of North Carolina’s Randolph Electric Membership Corporation, and fortify Entergy Texas, Inc. infrastructure to withstand extreme weather events.

The latest slug of investment follows a US$3.5bn award in October 2023 for 58 projects and US$2.2bn for eight additional projects in August 2024. To date, the GRIP program has announced US$7.6bn in financing for grid tech upgrades and resilience action.

Other Stuff

BASF partners with Acadian Plant Health to introduce climate-resilient solution (BASF)

How drones improve safety for Aramco, Chevron, Shell & bp (Sustainability Magazine)

Why VCs are excited for fire season (Politico)

RESEARCH

Axa Future Risks Report 2024 (Axa)

The climate data for adaptation and vulnerability assessments and the spatial interactions downscaling method (Scientific Data)

Drought and aridity influence internal migration worldwide (Nature Climate Change)

Rapid shifts in grassland communities driven by climate change (Nature Ecology & Evolution)

The impact of environmental shocks due to climate change on intimate partner violence: A structural equation model of data from 156 countries (PLOS Climate)

Selective breeding enhances coral heat tolerance to marine heatwaves (Nature Communications)

Thanks for reading!

Louie Woodall
Editor