As the global economy grows and develops, the effects of climate change are only escalating:
- Increasing loss of sea ice
- Accelerating rise of sea level
- Intensifying heat waves
- Shifting location ranges of plants and animals
- Faster flowering rate for trees
- Increasing loss of habitats
- And more…
Without action, the world could lose up to 18% of global GDP by 2050, according to a Swiss Re Institute stress-test analysis. Climate Change can affect nearly every aspect of our lives, from the clothes we wear, to the places we travel, to the food we eat.
Climate Change Adaptation Investments
Adaptation projects are a means to protect from the harms of climate change (such as a dike, which is used to prevent flooding) and generally are public goods; everyone benefits from them and no one appropriates rent.
- The private sector only funds 0.1% of private climate finance flows for adaptation projects.
- They are generally funded by the government, yet there is room for private-sector involvement.
- They account for only 7% of all climate investments.
- They are generally distributed amongst water and wastewater management, agriculture and land use, and disaster risk management.
Barriers for Adaptation Finance
- It is generally cost-saving, which can be less appealing than revenue-generating investments.
- Benefits for adaptation projects generally take longer to accrue, and if private sector actors are looking for shorter term goals, this can be discouraging.
- There is a high upfront cost.
Benefits of Adaptation Finance
- Smaller-scale adaptation projects hold the costs and benefits private.
- Adaptation options can be more easily assessed against their costs to private owners using traditional risk assessment methods and cost-benefit analysis.
Check out this Public-Private Partnership (PPP) Case Study.
India Adaptation Investment Projects
- Financing for adaptations projects is most commonly derived from national budgets and currently is guided by the National Adaptation Fund for Climate Change.
- Jain Irrigation System, a leading manufacturer of irrigation systems, has been promoting the micro-drip system in many water-stressed regions of India and helping farmers better adapt to climate-related stress and water shortage.
- In an effort to further scale up these climate adaptation technologies for farmers, in 2014 Jain Irrigation System entered into a memorandum of understanding with TERI, India’s leading climate change research and policy institute.
- “Towards Climate Resilient Livestock Production System in Punjab”
What is Green Finance?
- Green Finance involves the financial arrangements that are specific to the use for projects that are environmentally sustainable or that adopt the aspects of climate change.
- Projects include production of energy from renewable sources, clean transportation, green buildings, waste management, sustainable land use.
United Nation Climate Finance
- The United Nations Climate Change Conference launched the Global Environment Facility (GEF), which has served as the financial mechanism for the UN’s climate change efforts since 1994.
- The Least Developed Countries Fund and the Special Climate Change Fund were created after the Kyoto Protocol (2001) and are managed by the GEF.
- The Green Climate Fund was also created as a financial mechanism for the UN.
- Standing Committee on Finance
- Functions:
- Assisting the COP (Conference of Parties) in improving coherence and coordination in the delivery of climate change financing
- Assisting the COP in rationalization of the financial mechanism of the UNFCCC
- Supporting the COP in the mobilization of financial resources for climate financing
- Supporting the COP in the measurement, reporting and verification of support provided to developing country parties
- Functions:
