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Some Signs of Progress Toward Successful Adaptation Projects

My previous blog discussed the case for much greater funding to help developing countries both reduce their greenhouse gas emissions (in climate policy terms “mitigation”), and to prepare for such impacts (in climate policy terms “adaptation”). I described the many challenges to the latter, especially the need for more proven, effective adaptation projects. Fortunately, there are signs of progress on both counts.

Donors are promising more finance for adaptation in developing countries. The importance of addressing climate risks is finally being recognized. For starters, the final text of the “Glasgow climate pact,” the agreement reached by the parties at COP26, settled on a call for developed nations to “at least double their collective provision of climate finance for adaptation” from 2019 levels by 2025. The World Bank and other international financial institutions, critical sources of risk capital, have promised that at least 50% of their climate related investments will be for adaptation. The Least Developed Countries Fund and Adaptation Fund, both of which support projects in some of the poorest and most vulnerable countries, received new pledges of $413 million and $356 million respectively. This is a substantial increase relative to previous years. Other recent announcements to directly or indirectly support increased funding for adaptation include a $50 billion Resilience and Sustainability Trust proposed by the International Monetary Fund and philanthropic initiatives like the $1 billion Climate Disaster Fund. New financial instruments with public support such as the Citi Social Finance Bond, resilience bonds and debt for climate swaps, a financial transaction exchanging a nation’s foreign debt in return for local investments in climate action, offer promise for helping some of the poorest and most heavily in-debt countries to implement adaptation measures.

Private investors, too, are expressing more interest in measures that improve long-term resilience as a hedge against the increasing likelihood of losses from climate disasters. One of the largest long term asset managers, Wellington Management, recently launched a fund that invests in companies whose business models and revenues are linked to climate risks. Bank of America projects the climate adaptation market will double to $2 trillion a year within the next five years

There are also multiple new collaborative initiatives focused on addressing the barriers to good adaptation projects, e.g.:

● The Race to Resilience, is bringing businesses, financial institutions, cities, and civil society organizations together in a collaborative effort to identify and implement resilience measures.

● A network of small island states has been formed to develop common solutions, recognizing the limited capacity of such small countries.

● A new collaborative effort aims to standardize metrics for measuring adaptation project benefits.

However, progress for adaptation measures remains slow for several reasons. An initial problem in many developing countries is that they are in the early stages of evaluating and prioritizing their adaptation needs. As of March 2021, only 22 had fully completed national adaptation plans for this purpose. As these plans are completed with help from international development agencies, documentation of priority needs and investment requirements essential for investment should become more available.

Another continuing challenge is a preference for flashy and expensive technological solutions when there are less costly and more effective alternatives. A UN team of which I was a member working to improve climate observation and emergency warning systems in poor African countries found many preferred to continue reliance on difficult to maintain, high-priced radar systems — dozens of which in central Africa are labeled as “non-reporting” in the WMO data system. A recently approved project to improve such systems in Timor-Leste incorporates less expensive, more reliable technology, equipment that has been available for over a decade, some indication of more sensible funding decisions.

Learning from Success. In addition to increased financing, there are a subset of projects that show adaptation can be done successfully, particularly when implemented at the local level with community involvement. These projects are noteworthy for their focus on learning from experience and offer detailed, practical guidance.

● Sri Lanka is among countries acting to protect coastal mangroves as a natural buffer more effective and much less expensive than building barriers. Regulations on coastal development are key along with modest investment in replanting, all with local community support. Other relatively low-cost, nature based solutions include payments to keep trees in the ground in areas prone to deforestation and innovative measures like using oyster shells to protect shorelines

● Numerous cities in India have implemented effective “cooling action plans” based on early warning of extreme heat events and identification of emergency shelters, again without the need for large investments.

● Innovative use of technologies like satellites, climate-smart agriculture (e.g., breeding more drought resistant crop varieties) and climate friendly air conditioners are demonstrating more effective ways of achieving adaptation, some with the promise of dramatic cost savings

● The Adaptation Fund established an Innovation Facility to encourage creative approaches to adaptation through both small grants (up to $250,000) and larger grants (up to $5 million) to scale up proven solutions and expand their use in new countries

Finally, there is also growing recognition that more frequent and severe storms, wildfires, droughts, and other extreme weather events will necessitate increasing amounts of disaster relief — whatever is done to adapt. While the climate negotiations address this issue in the form of debates about payments for “loss and damage”, there are many opportunities for more efficiently and effectively responding to disasters with insurance instruments. Insurance conditioned on actions to improve resilience can both promote adaptation and reduce the impacts of extreme events. Systems based on “parametric” insurance avoid costly administrative delays in making payments through the use of agreed objective triggers such as exceeding some temperature or wind speed. However, the die has been cast and there is no way to avoid the need for much greater financing for disaster relief.

These initiatives give hope that funding for adaptation will increase substantially — but will also prove to be more effective in the years ahead.

Alan Miller is a former climate change officer in the International Finance Corporation (2003–13) and climate change team leader, Global Environment Facility (1997–2003)