UN Climate Finance Impasse, Sea-Level Rise Risks, UK Flood Tech, and More

Sponsor Message

Is adaptation the investment world’s biggest blind spot? Join me and CleantechGroup for a one-day event on Adaptation and Mitigation: New Innovation & Venturing Opportunities for a 2° World on September 10 in Boston to find out.

Network and learn from over 100 innovators, investors, and corporates. It’s an opportunity to build alliances to solve the biggest climate challenges we face today. I’ll be there, will you?

Today in Climate Proof:

Finance:

• Countries Still at Odds on Climate Finance

• Biden Admin Spends Big on Drought Resilience

• Climate Risks Amp Aussie Insurance Costs

Policy:

• UN Warns of Escalating Sea-Level Rise Risks 

Tech:

• UK Invests in Flood Tech

• Google.org Backs Asian Climate Resilience Tech

Research:

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

Hey there, Climate Proofers! Climate Week NYC is coming up, and your favorite adaptation newsletter is hosting a happy hour on Tuesday, September 24. Sign up below for cocktails, small bites, and stimulating conversation on the cutting-edge of climate adaptation finance, tech, and policy👇

Countries Still at Odds on Climate Finance

Countries remain deadlocked on a new global climate finance target, with less than three months to go before crunch talk at the COP29 UN Climate Conference.

An update on the New Collective Quantified Goal on climate finance (NCQG) negotiations, published last Thursday, highlights seven competing options for a deal. They differ on the quantum of finance to be provided, the makeup of contributors, and division of finance across climate objectives — reflecting various countries’ negotiating positions.

One option calls for “sub-goals for mitigation, adaptation and loss and damage”, and another “Thematic sub-goals on mitigation, adaptation, loss and damage response, readiness support and transparency provisions.” Other options do not include dedicated adaptation targets.

Arab, Latin American and Caribbean, and African countries are in favor of a balance between mitigation and adaptation objectives, the update shows. The latter group also supports “grant and concessional finance” for adaptation and Loss and Damage. 

The African group of countries also supports a high annual climate finance amount, recommending that developed countries commit to spending US$1.3trn per year by 2030, with an aggregate goal of US$6.5trn.

Developed countries want to emphasize private finance mobilization as part of the NCQG, reflecting concerns about stressed public budgets. They are also keen on having high-emitting developing countries, like China, pay into the goal. For example, the European Union package of options states that the “collective goal can only be reached if Parties with high GHG-emissions and economic capabilities join the effort.”

Biden Admin Spends Big on Drought Resilience

Over US$55mn is being made available to combat water scarcity in the Western US through President Biden’s climate laws, the Department of the Interior (DOI) has announced.

The public funds will be used to develop new projects that promote drought resilience and upgrade aging infrastructure to improve water management. Money will also flow into recharging aquifers, enhancing water recycling and treatment, and bolstering water-related technologies.

The investment follows DOI’s announcement in May of US$147mn to help communities prepare for, and respond to, drought challenges. Interested parties can tap into these funds by applying for the WaterSMART Drought Response Program. The closing date for applications is October 7.

Climate Risks Amp Aussie Insurance Costs

Over 1.6mn Australian households are finding it hard to insure their homes, in part because of rising costs related to climate shocks.

The Actuaries Institute says 15% of Australian homeowners suffered “affordability stress” as of March 2024 — defined as having to pay insurance premiums that are more than four weeks of gross household income. This is up from 12% in March 2023 and 10% in March 2022. 

A key driver of affordability stress is a surge in home insurance premiums, which increased an average of 13% in the year to March 2024. This is in part due to the rising cost to insurers of covering climate-related disasters, like floods and storms. Most notably, the cost of reinsurance to primary insurers increased last year in the wake of more frequent and costly perils. As of 2023, reinsurers failed to earn their cost of capital five years out of the previous six, mainly because of rising natural disaster-related losses.

Australia-wide, natural disaster costs make up 30% of the mean annual insurance premiums for these affordability-stressed households. For around one-third of stressed households, over half their premiums relate to peril costs, mainly exposure to floods. Those property holders paying the 5% of highest premiums are typically very exposed to floods and cyclones, and saw their annual premiums increase by more than 30% in the year to March 2024.

Rising insurance affordability pressures could be bad news for Australian banks. Lenders typically require households to get insurance before offering mortgages. However, banks generally do not verify insurance coverage on a continual basis. As insurance affordability stress rises, it’s likely more homeowners are letting their insurance expire, exposing the banks to potential losses on affected home loans in the wake of climate shocks.

To better shield homeowners and banks from these risks, the Actuaries Institute wants to see the rollout of “resilience loans” that can be used to finance climate adaptation measures.

“Resilience loans to individual households with the financial means to undertake such lending provide a potential pathway to long-term security for those households, as well as for lenders, insurers, investors and government,” the report reads.

Other Stuff

Seizing the Moment: A new climate finance goal that delivers for the Pacific (Oxfam)

Doing our fair share: New Zealand’s responsibility to provide climate finance (Oxfam)

Managing currency risk to catalyze climate finance (Climate Policy Initiative)

India to spend US$300mn to mitigate floods, conserve water in big cities (Reuters)

US announces more than US$10mn in additional support at the Pacific Islands Forum (USAID)

UK and Nepal sign Memorandums of Understanding on climate resilience financing (Government of Nepal Ministry of Finance)

US Fish and Wildlife Service and the National Fish and Wildlife Foundation announce US$8.9mn to restore and conserve habitats in Chesapeake Bay watershed (US Fish and Wildlife Service)

The government of Canada invests in new research projects to develop solutions towards sustainable agriculture (University of Prince Edward Island)

UN Warns of Escalating Sea-Level Rise Risks 

“Surging seas are coming for us all” warned UN Secretary-General António Guterres in a speech trumpeting the climate threat to Pacific island nations. 

Speaking at the Pacific Islands Forum in Tonga last Tuesday, Guterres highlighted how sea-level rise is a growing risk to coastal economies and called on global leaders to “massively boost climate adaptation investments, to protect people from present and future risks.”

The speech came against a backdrop of two separate UN reports, one on the State of the Climate in South-West Pacific and another summarizing the latest science on sea-level rise risks. The latter reiterates findings that the global-mean sea level has risen faster since the 20th century than over any prior century for at least 3,000 years, largely because of human-induced climate change. It also warns that no matter the future path of human emissions, a degree of sea-level rise — of around one meter — is already locked in because of current warming.

Rising seas could “redefine the coastlines of the 21st century,” the report says, eroding land, degrading infrastructure, uprooting lives, and undermining habitability. In his speech, Guterres also emphasized how higher sea levels worsen storm surge and flooding, which can overwhelm communities in island nations as well as coastal megacities like Los Angeles, Shanghai, and Mumbai.

“Rising seas will increase the frequency of extreme events like coastal floods. If global temperatures rise by 2.5 degrees [Celsius], that frequency could increase from once in 100 years to once in five years by the end of this century. Without new adaptation and protection measures, economic damage from coastal flooding could amount to trillions of dollars,” said Guterres.

On adaptation, the Secretary-General added that developed countries have to deliver on a commitment made at COP28 last year to double adaptation funding to at least US$40bn by 2025. He also called for “significant contributions” to the UN Loss and Damage Fund, which is supposed to finance the recovery of vulnerable nations from climate-related shocks.

The report on the State of the Climate in South-West Pacific highlights the “triple whammy” of global warming in the region: rising seas, ocean acidification, and ocean warming. The sea level in the South-West Pacific has increased 4-6 inches since 1993, at around twice the global rate since 1993. Moreover, since 1980 sea surface temperatures in the region have surged at around triple the global average rate, and marine heatwaves are more intense and long-lasting in the region.

Other Stuff

2023 was a record year for violence over water resources across the globe (Pacific Institute)

Swiss government rebuffs ECHR climate ruling: next stop Strasbourg (swissinfo.ch)

Rising costs and rising seas: New Zealand parliament’s climate adaptation inquiry (RNZ)

Fears of waterborne disease rise in Bangladesh as floods recede slowly (WTAQ)

UK Invests in Flood Tech

The UK has set up a new research network that will use the latest tech and enhanced risk models to better estimate where floods and droughts will strike.

The Floods and Droughts Research Infrastructure (FDRI) is a £40mn (US$53mn) initiative that should improve the UK’s understanding of these extreme weather events and help craft resilience and adaptation responses.

Floods and droughts in the UK affect five million people a year and cost the economy around £740mn (US$972mn) annually. The FDRI should produce insights that aid local authorities and the UK Environment Agency in developing effective protections, early warning systems, and damage mitigation measures. 

“Our new institute will bring together a team of world-leading researchers and the latest technology to ensure our communities, businesses and farms are protected from these devastating events,” said Emma Hardy, the UK’s Flood Minister.

Using a network of high-tech monitoring sensors near UK rivers and advanced computer models, the FDRI will be able to better understand how water flows through the environment and how climate change affects this process. This should sharpen predictions of where and when floods and droughts should occur — and how damaging they will be. The research infrastructure will also build and leverage a databank including river profiles, real-time atmospheric readings, ground saturation, water movement, and more.

Funding of £38mn (US$50mn) for the research infrastructure has been awarded by the Natural Environment Research Council (NERC). A further £1.2mn (US$1.6mn) from the Engineering and Physical Sciences Research Council and NERC has been earmarked for projects that will cut the time and costs involved in running computer models of projected flooding out to the year 2100.

Google.org Backs Asian Climate Resilience Tech

A climate solutions tech fund backed by Google.org and the Asian Development Bank announced US$5mn in grants to an array of nonprofits working on climate adaptation and mitigation in Asia.

The APAC Sustainability Seed Fund 2.0, an initiative born out of the Asian Venture Philanthropy Network, announced the 18 grantees last Thursday. They include Indian organizations the INREM Foundation, CEPT Research and Development Foundation (CRDF), Institute for Financial Management and Research (WELL Labs), and Gujarat Mahila Housing Sewa Trust (MHT), which will use the grants to support AI and tech-powered solutions that address water contamination, urban heat islands effects, and lake preservation, among others.

Non-Profits Selected For APAC Sustainability Seed Fund 2.0

Alongside the cash, the grantees will also get access to network opportunities and capacity-building opportunities.

The first APAC Sustainability Seed Fund awarded US$3mn last year to 13 nonprofits focused on addressing climate impacts to vulnerable low-lying and small island countries.

Google.org is the tech giant’s philanthropic arm. Each year the organization distributes some US$200mn to nonprofits and social enterprises.

Other Stuff

Drone swarms could stop wildfires, researchers say (BBC)

Michigan State University researchers develop new farm tech to help mitigate effects of climate change on crops (WKAR News)

Can AI help tame climate-related disasters? (Business Daily)

Harnessing the power of AI for climate change impact assessment (UN University)

Climate change vs multifamily HVAC systems (Cooperator News)

RESEARCH

Typhoon Shanshan made 7.5% more intense and 26% more likely by climate change (Imperial College London)

Progress and gaps in climate change adaptation in coastal cities across the globe (Nature Cities)

Human-induced borealization leads to the collapse of Bering Sea snow crab (Nature Climate Change)

Thanks for reading!

Louie Woodall
Editor