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Now is a critically important time for the world to focus on climate finance. Developing nations—those least responsible for causing global warming but most vulnerable to its impacts—need funding to adopt clean energy, protect infrastructure from sea level rise, and engage in other adaptation and mitigation strategies. But these activities are costly—the world will need to figure out how to fund them now in order to protect countries from future climate change.

The problem is that it’s hard to draw attention to a topic that’s difficult to understand. The issue of climate finance is decidedly complex. Several entities--think-tanks, banks and other financial institutions, international institutions, governments, and public sector agencies--are involved in myriad activities related to climate finance. Understanding how they operate, interact, and contribute can be confusing. Even the vocabulary that defines climate finance can be inconsistent, abstract, and nebulous at times. These complexities make climate finance an issue that’s hard for people--even experts, sometimes --to wrap their heads around.

Introducing the Climate Finance FAQs Series

That’s where WRI’s new blog series, Climate Finance FAQs, comes in. Our experts will attempt to shed light on basic climate finance issues through a series of blog posts. By explaining these topics in plain language, we can make climate finance more accessible--and hopefully, draw broader attention to the pressing issue of how to pay for climate change mitigation and adaptation.

UPDATE 4/11/13: After this blog post was published, the OECD released updated figures for 2010 and 2011. The data still shows a decrease in commitments for adaptation, mitigation, and climate finance, as this blog post states. However, adaptation expenditures were 3 percent higher in 2011 than in 2010, as opposed to unchanged. (View updated figures.) The changes in the numbers are a result of donors entering new data for previous years or updating their old data. Preliminary data for 2012 shows that aid to developing countries continued to fall. Detailed figures for 2012 will be released in June 2013.

At the 2009 U.N. climate change conference in Copenhagen, developed nations committed to provide a collective $100 billion per year by 2020 to help developing countries mitigate greenhouse gas emissions and adapt to climate change’s impacts. Recently, the Organization for Economic Co-Operation and Development (OECD) released some surprising new data on this pledge. The figures indicate that developed nations’ recent climate finance contributions have fallen rather than risen toward the level of their 2020 commitment.

A Look at the New OECD Data

The OECD is a consortium of 34 wealthy countries. Among other joint initiatives, it provides a platform to monitor and share statistics on aid flows and climate finance contributed by its members. Most OECD members report both their climate finance expenditures and commitments using the “Rio Markers” (see text box), and the OECD secretariat periodically makes these numbers public. OECD members’ climate finance contributions represent a significant portion of the collective $100 billion commitment, so the numbers reported by the OECD give a good indication of developments in the climate finance field.

Surprisingly, new OECD numbers show that while adaptation expenditures in 2011 remained the same as in 2010, expenditures for mitigation activities decreased. Plus, the total commitment for climate finance decreased from $23 billion in 2010 to $17 billion in 2011.

While a “commitment” refers to the total amount of money a country will spend on an adaptation/mitigation project over a multi-year period—which is reported at the beginning of a project—an “expenditure” refers to the amount a country spends in a particular year on adaptation/mitigation activities. In January 2013, the OECD updated its data for 2011. It is difficult, of course, to predict or analyze trends based on only two years of data (the only data that’s currently available on OECD climate finance commitments). But given developed nations’ agreement to scale up climate finance significantly by 2020, this decrease is surprising—and could be concerning.

As the world continues to feel the effects of drought, sea level rise, and more volatile weather, it’s clear that adaptation efforts have never been more imperative. These initiatives are critically important in order to protect communities—especially in impoverished places—from the worsening impacts of climate change.

WRI’s Vulnerability & Adaptation team has been working to ensure that adaptation is a central component of the international development agenda. Over the past few years, WRI and its partners have conducted practical research and analysis on three continents across a broad spectrum of adaptation topics, including monitoring and evaluation; case studies on information use for adaptation; the role of national institutions; and a broad set of decision-making principles for a changing climate. But what have we learned from the results of these efforts? And how can we ensure that global adaptation efforts are conducted effectively and efficiently?

We recently stepped back and evaluated the work we’ve done to try and answer these questions. One of our clearest conclusions is that much remains to be learned about “what works” in adaptation. The results of our efforts point toward five areas of long-term, practical, applied research that could help provide a foundation for effective adaptation moving forward: adaptation success, critical thresholds, adaptation options, information systems, and institutions.

This piece originally appeared on

America is blessed with abundant energy sources, from an array of traditional fuels and natural gas to solar, wind, and other renewable resources. But as the pressure on these resources grows, the United States must have a plan to ensure a stronger and more sustainable future. In today’s world, any smart and effective energy strategy must take into account the risks of climate change.

Climate change impacts are already here. They do not have a political affiliation, nor are they constrained by state boundaries. Moreover, climate impacts are taking a serious toll on America’s infrastructure and economy.

Let’s look at some examples:

America’s coastal areas are particularly vulnerable, as rising sea levels and heavier precipitation are increasing the impacts of hurricanes and other storms. More than 58 percent of U.S. gross domestic product, some $8.3 trillion, is generated in coastal areas (including the Great Lakes). This accounts for some 66 million jobs. Florida, in particular, faces significant threats due to rising seas.

Temperatures hit an unseasonably warm 61˚F in Washington D.C. earlier this week. The Middle East is blanketed in record rainfall and rare heavy snowfall, ending a nearly decade-long drought. Australia witnessed its hottest day on record this past week, stoking wildfires. And China is experiencing a bitterly cold winter, where temperatures are the lowestthey’ve been in almost three decades. We’re only two weeks into 2013, and already we are getting a reminder of the extreme year we just emerged from.

2012: A Year of Extreme Weather

How extreme were last year’s weather and...

A Critical Decade for Climate Policy

Tools and Initiatives to Track Our Progress

WRI and the ClimateWorks Foundation convened climate policy experts for a Practitioners' Workshop on Climate Policy Tracking in October 2012. Informed by the workshop, this working paper presents a landscape assessment of independent efforts to track the adoption, implementation, and impact...

After a year of extreme weather events and recent studies outlining climate change’s impacts, it’s become increasingly clear that we must understand what emissions reduction pathways are necessary to avoid these risks. The Intergovernmental Panel on Climate Change’s (IPCC) last Assessment Report, for example, outlined the emissions reductions needed from developed countries to stabilize concentrations of greenhouse gases (GHG) consistent with limiting warming to 2°C. Further research has continued to examine the global GHG emissions reductions necessary to avert dangerous climate change. And as countries implement existing policies and consider new ones, the scale of required emissions cuts is a fundamental question. In fact, it’s one of the most pressing questions facing the international climate change community.

One new study shows that we have to reduce emissions even more than scientists initially thought in order to avoid climate change’s worst impacts. A paper published in Energy Policy on February 20th by Michel den Elzen and colleagues examines new information on likely future emissions trajectories in developing countries. This includes recent clarification of assumptions and conditions related to developing country pledges. In addition, countries have also come forward with further information on their emissions projections. As a result, the report finds that developed countries must reduce their emissions by 50 percent below 1990 levels by 2020 if we are to have a medium chance of limiting warming to 2°C, thus preventing some of climate change’s worst impacts.

This level of reductions is considerably higher than what the scientific community thought was necessary to meet the 2°C goal. The most recent IPCC Fourth Assessment Report laid out a recipe for a medium chance[^1] of limiting warming to 2°C. This report—compiled by the world’s leading climate scientists—stated that developed countries would have to reduce their emissions by 25-40 percent below 1990 levels by 2020, and developing country emissions would have to be reduced substantially from their business-as-usual emissions trajectories.

On February 20, WRI President Andrew Steer participated in event with GreenBiz CEO Joel Makower at the annual GreenBiz summit in New York City. This post builds off that discussion.

Sustainability has become a major business buzzword in recent years. For many, though, it’s still viewed as a philanthropic initiative, disconnected from a company’s core goals, or even a burden that competes with other strategic priorities. That must change.

Fortunately, more leaders are recognizing sustainability risks. At the World Economic Forum in Davos last month, leaders in business, government, academia, and civil society named climate change and water supply as two of the top five global risks facing companies today—and with good reason.

Extreme weather and climate impacts are becoming increasingly common and carrying a significant economic toll. According to the insurance group Munich Re, the number of weather-related loss events over the past three decades has quintupled in North America, quadrupled in Asia, and increased in Africa, Europe, and South America. In the United States alone, 11 events crossed the $1 billion mark in losses in 2012. Hurricane Sandy cost U.S. taxpayers more than $60 billion, striking at the heart of a heavily populated business and financial zone. And, drought in the United States is expected to cost 1 percent of the annual GDP, making it one of the most expensive natural disasters in the country’s history.

Likewise, water risks are increasingly on companies’ radars. More than 1.2 billion people are already facing water scarcity. By 2025, two-thirds of the world’s population will likely experience water stress. According to a 2012 report by the Carbon Disclosure Project, the associated costs of water events for some companies reached $200 million, up 38 percent from the previous year.

So, how can companies link these risks to corporate strategy? How can they push the management of sustainability issues into the center of businesses’ strategic decision-making?


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