Global | Is the Adaptation to Climate Change a Financing Opportunity? Unlocking is Pending

Summary

Adaptation to accelerated climate change is imperative, which can be an opportunity for sustainable financing from the private sector if the conditions are in place. It remains to be seen.

Key points

• Key points:
• Adaptation efforts are needed to prepare societies for the unavoidable impacts of climate change. Temperature increase caused by the accumulation of greenhouse gasses (GHG) in the atmosphere is highly inertial in the short term, between one and two decades because it is marginally responsive to changes in emission flows.
• How much financing for adaptation to climate physical risks is needed? It depends on assumptions, but the amount would be huge because risks are large. The estimated adaptation costs and needs for developing countries are in a plausible range of US$215 billion to US$387 billion per year this decade, accordingly UN analysis.
• How to bridge the adaptation finance gap? Unblocking private sources of funding with enhanced financial Incentives: Public actors could use financial tools such as tax breaks, risk guarantees, or concessional loans. They help to create a pipeline of bankable adaptation projects that are suitably and adequately “de-risked”, making adaptation projects more attractive to private investors.

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