Despite the commitments negotiated at the 21st Conference of the Parties of the UNFCCC in Paris in December 2015, the impacts of a changing climate are being increasingly felt across the globe. Extreme weather events, changes in precipitation patterns, melting icecaps and glaciers, rising sea levels and the potential for demographic, health and economic instability will affect us in incalculable ways in the near future. Climate change is likely to impact the poorest and most vulnerable the hardest, despite most of the responsibility for climate change lying with the wealthier regions and societies.
Although the precise impacts of a climate change are highly unpredictable, we cannot use this as an excuse for inaction. However, efforts to reduce greenhouse gas emissions to date fail to reflect the urgency communicated in the most recent IPCC reports. Further delays to action will result in increasingly costly measures to adapt to a changing climate.
UNEP’s Climate Change Adaptation Finance Gap Report (2016) estimates that the annual cost of adaptation will be between $140-300 billion by 2030, which suggests that public budgets will not be able to address the financing challenge alone. Therefore, there is not only a risk to the global economy and consequently the finance sector from climate vulnerability, but also financing from the private sector will be necessary to increase economic and social resilience to climate impacts.
In response to the adaptation challenge, the Global Center on Adaptation (GCA) was established in 2018 and convened the Global Commission on Adaptation, headed by Ban-Ki Moon, Bill Gates and Kristalina Georgieva, to identify the immediate challenges and launch a Year of Action beginning at the UNSG Summit on Climate Change in September 2019.
One of the key topics identified by the GCA is to integrate climate change adaptation into financial decision making. In order to provide the GCA with the technical background on the role of finance in adaptation, UNEP FI launched the paper, “Driving Finance Today for the Climate Resilient Society of Tomorrow” on 17 July 2019 to focus greater attention on climate risks and opportunities in private sector investment decisions, as well as accelerating the flow of finance into adaptation activities. The key aims of the paper are to:
- frame the adaptation financing challenge,
- review current financial structures and mechanisms to address adaptation,
- identify barriers to increasing engagement by the finance sector, and,
- make recommendations that point to high-priority and high-impact actions by key stakeholders.
To deliver the report, UNEP FI engaged two highly respected experts on climate finance, Stacy S. Swann and Alan S. Miller, as well as drawing together a Review Panel of international experts from commercial and development banking, investment, academia, private consulting and government.
Download the UNEP FI / GCA background paper on adaptation finance here.
Listen to the presentation given at the launch of the paper here.