Recently, WRI hosted a roundtable on Adaptation Finance in Washington, D.C., bringing together experts in development and climate finance to discuss this challenge: Countries and donors are mobilizing hundreds of millions of dollars to help people adapt to a changing climate. How do they get it to the local communities that need it most?
The Green Climate Fund (GCF) has big ambitions: It aspires to become the main global fund for providing climate change finance, contributing to activities like the design of resilient cities and the expansion of low-emission power generation.
While the GCF Board should be ambitious and innovative, they can also look to what’s been done before. Drawing knowledge from the experiences of other critical climate and development funds is one way to ensure that the GCF succeeds.
Readiness is a hot topic for the newly established Green Climate Fund (GCF), as it heads towards its 6th Board meeting in Bali, Indonesia next week. At the meeting, the Board is expected to make a decision on what the GCF’s readiness program will look like. It will likely be narrow in focus, which makes sense based on its limited funding and timeframe. Yet as the GCF moves forward, it is important to remember countries’ broader readiness needs and to be flexible in finding the right institutions to channel funds in the short term.
This is the final installment of WRI’s blog series, Adaptation and the Private Sector. Each post explores ways to engage the private sector in helping vulnerable communities adapt to the impacts of climate change.
As the impacts of climate change become ever-clearer, so does the challenge of adaptation. While the World Bank estimates that developing countries will need $70-$100 billion annually through 2050 to adapt to climate change, the public sector alone cannot meet this financial goal. Rather, the world needs the human, technical, and financial resources of the private sector to help bridge this significant adaptation finance gap and make vulnerable communities more climate-resilient.
National governments have a critical role to play in supporting and stimulating private sector investment in adaptation. In order to engage the private sector in helping vulnerable populations prepare for the effects of climate change, developing country governments can take three types of actions:
But while MSMEs can assist in helping vulnerable households adapt to climate change, they are also extremely vulnerable to the impacts of a warmer world, such as intensification of precipitation and shifts in water availability. It’s important that MSMEs overcome these challenges and capitalize on their unique business opportunities in ways that help vulnerable communities adapt to climate change.
Multinational companies (MNCs) typically have operations and supply chains in many parts of the world. The way they respond to climate change, therefore, can affect many populations, including poor communities in developing countries, where many people are especially vulnerable to heat waves, sea level rise, and other climate change impacts. MNCs sometimes find themselves in tension with local groups and the environment, but they can also play an important role in making these communities more climate-resilient.
Here are three ways that MNCs can contribute to climate change adaptation in developing countries:
This year’s climate negotiations in Warsaw, Poland (COP 19) were a bit of a mixed bag. On the one hand, the summit’s outcomes were dramatically out of step with the level of action needed to solve the climate change problem. A tempting metaphor for the talks was the national stadium in which they were held– one could go around in endless circles in search of the right location.
On the other hand, the Warsaw COP did achieve the incremental outcomes needed to move the process forward. Negotiators put in place a work plan for securing an international climate agreement at COP 21 in Paris in 2015. The COP also made progress on scaling up climate finance and addressing the difficult issue of loss and damage, a process for addressing climate impacts that are difficult or impossible to adapt to. These are small but important steps toward bringing countries out of their repetitive, circular discussions and closer to agreeing collectively on how to address global climate change.
Adapting to the impacts of climate change—like heat waves, increased floods, and natural disasters—is an enormous challenge. It’s also one that comes with an enormous price tag. Although it’s difficult to calculate the extent of the costs, the World Bank estimates that developing countries need $70 to $100 billion USD per year through 2050 to meet their current and future climate adaptation needs.
The Climate Policy Initiative, however, estimates that in 2011, only $4.4 billion USD in adaptation finance went to developing countries. This leaves a gap of anywhere from $65.6 to $95.6 billion USD per year between what developing countries need and what developed nations are giving.