According to the Global Commission on Adaptation, investing USD 1.8 trillion globally in five areas of adaptation from 2020 to 2030 could generate USD 7.1 trillion in total net benefits.
The African Development Bank seeks to increase adaptation funding commitments to USD 12.5 billion for 2020-2025.
USD 790 million has been committed in support of climate adaptation for small-scale food producers.
The Adaptation Fund received close to USD 60 million in new pledges.
The World Bank and Germany launched a fund towards a USD 1 billion programme to address land degradation and support climate-resilient landscapes, with a EUR 200 million kickstart contribution from Germany.
30 September 2019: In September, the UN Secretary-General’s Climate Action Summit highlighted the need to accelerate climate change adaptation solutions. To this end, we saw finance and investment commitments made by governments, multilateral development banks (MDBs), civil society and the private sector to support various initiatives. This Update informs of new pledges made to the Adaptation Fund, and other adaptation finance initiatives led by the Global Commission on Adaptation (GCA).
GCA Catalyzes Action, Financial Commitments
The GCA presented findings on progress made so far on implementing climate change adaptation solutions, and called on governments and businesses to accelerate action. The GCA report titled, ‘Adapt Now: A Global Call For Leadership On Climate Resilience,’ shows that investing USD 1.8 trillion globally in five areas of adaptation from 2020 to 2030 could generate USD 7.1 trillion in total net benefits. Based on its findings, the Commission outlines eight action tracks to jump-start necessary transitions in the coming year. They concentrate, among others, on finance and investment for effective adaptation, including in the areas of preventing disasters, infrastructure, resilient cities, food security and agriculture.
Initiatives under the Commission’s Agriculture and Food Security track, include:
- expanding access to climate-related digital advisory services for at least 100 million small-scale producers by 2030;
- scaling up access for at least 100 million small-scale producers to reach insurance, markets, finance and productive safety nets; and
- improving access to and use of adaptation technologies and agroecological practices for 100 million small-scale producers.
During a GCA event, ‘Countdown to the Climate Adaptation Summit,’ in New York, US, African Development Bank (AfDB) President, Akinwumi Adesina, pledged to increase commitments to fund climate change adaptation by USD 12.5 billion between 2020 and 2025.
USD 790 Million to Support Climate Adaptation for Small-scale Food Producers
Among many calls for urgent action issued during the UN Climate Action Summit, Ban Ki-moon, former UN Secretary-General and Chair of the GCA, stressed the risk of undermining food security. As reported by the World Resources Institute (WRI), climate change could depress growth in global agriculture yields up to 30% by 2050, resulting in a 20% increase in food prices and a consequent rise in populations living in poverty.
Given the potential climate impacts on food security, the World Bank and several governments announced financial commitments of USD 790 million and assistance to enhance resilience of over 300 million small-scale food producers:
- The UK committed USD 34 million to support the GCA’s recommendations on agriculture;
- Germany committed an additional EUR 20 million engaging with partners in the InsuResilience Global Partnership, which aims at scaling up access to micro-insurance for 150 million people by 2025, of which more than 90% will be smallholder farmers; and
- The Netherlands will reorient USD 110 million towards food systems that are not only more productive and profitable, but also more adaptive and resilient.
The Bill and Melinda Gates Foundation pledged USD 310 million over the next three years for CGIAR, a global partnership among international organizations engaged in research for a food-secure future. Other commitments made in support of CGIAR include:
- The World Bank expects to provide about USD 150 million over the next three years;
- The UK committed USD 56 million in 2020;
- The Netherlands will increase its contribution to USD 55 million over two years;
- The European Commission committed USD 35 million for 2020-2021;
- Switzerland committed USD 33 million for 2020-2021; and
- Sweden committed a funding increase of USD 16 million in 2019.
Adaptation Fund Receives Close to USD 60 Million in New Pledges
The UN Climate Action Summit also prompted new pledges to the UNFCCC Adaptation Fund:
- Sweden committed USD 53 million for the period 2019-2022;
- Spain announced EUR 2 million in contributions; and
- the Government of Québec, Canada, as first-time contributor, pledged CAD 3 million.
World Bank, Partners Support Resilience, Disaster Recovery Initiatives
The World Bank Board of Executive Directors approved a USD 165 million project loan to strengthen the resilience of smallholder farmers in India against adverse climate change impacts. The Odisha Integrated Irrigation Project for Climate Resilient Agriculture will be implemented in rural areas vulnerable to droughts and largely dependent on rain-fed agriculture. Specifically, the projects concentrates on: improving access to resilient seed varieties and production technologies; diversifying towards more climate-resilient crops; and improving access to better water management and irrigation services. The loan from the International Bank for Reconstruction and Development (IBRD), has a six-year grace period, and a maturity of 24 years.
The World Bank approved an equivalent of USD 130 million in grants from the Crisis Response Window of the International Development Association (IDA) in support of the Government of Mozambique’s Cyclone Idai and Kenneth Emergency Recovery and Resilience Project. A complementary contribution of USD 60 million from the Netherlands is foreseen, and co-financing discussions with Germany are underway. These funds will be utilized in the recovery of public and private infrastructure, restore livelihoods and strengthen climate resilience in most affected areas. Under its private sector recovery component, the project will implement a matching grant mechanism and a credit line to support businesses’ recovery and access to finance.
The estimated annual cost of total global degraded land area is USD 300 billion. To support countries in tackling declining biodiversity, loss of forests, deteriorating land fertility and increasing risks such as uncontrolled forest fires, which are exacerbated by a changing climate, the World Bank and Germany announced the launch of a global partnership PROGREEN. Germany is contributing EUR 200 million towards the goal to raise USD 1 billion for the programme, which aims at bridging technical and financial gaps to accelerate countries’ progress towards their commitments, including to reduce greenhouse gas (GHG) emissions and improve livelihoods in poor and rural communities.
Investing in Sustainable Cities and Urban Resilience
Investments in and finance for sustainable cities are critical to achieve the objectives of the Paris Agreement on climate change and the SDGs. An estimated USD 93 trillion worth of sustainable infrastructure will be built by 2030, and over 70% of that will be built in urban areas. Several initiatives bringing together national and local governments, builders, investors and civil society were announced during the UN Climate Action Summit:
- In its global report titled, ‘Climate Emergency: Urban Opportunity,’ the Coalition for Urban Transitions makes the economic case for inclusive, zero-carbon cities, with an estimated worth at USD 23.9 trillion by 2050. The authors describe the role of national governments and present priorities for national action;
- The Leadership of Urban Climate Investments (LUCI) initiative was launched, with pledges of EUR 73 million, to accelerate and leverage climate finance for climate-friendly urban infrastructure. Key partners include development banks, Germany, the UK, Mexico, Luxembourg, Cameroon and Japan and various city networks;
- The coalition for Action towards Climate-friendly Transport (ACT) focuses on transport as an enabler of sustainable development;
- The Zero Carbon Buildings for All initiative aims at decarbonizing the buildings sectors in participating nations by 2050. Kenya, Turkey, the United Arab Emirates (UAE) and the UK already committed to the initiative, and so did financial institutions such as the International Finance Corporation (IFC), the European Investment Bank (EIB), and the Global Environment Facility (GEF); and
- Turkey, Kenya, the EIB, the Governor of Maine (US) and the Mayor of Surabaya (Indonesia) presented financing commitments to strengthen the resilience of 600 million urban slum dwellers by 2030 and to lift them out of poverty.
The EIB approved a EUR 150 million loan over 25 years to support a EUR 355 million scheme to transform flood protection for 500,000 people in the Greek cities of Athens and Thessaloniki and in the Peloponnese. Besides Greek government’s support, financing will also be provided by European Commission cohesion funds, the Council of Europe Development Bank (CEB) and the EIB.
Publication Highlight: Adaptation Metrics
The GCA and the UN Environment Programme Partnership with the Technical University of Denmark (UNEP-DTU Partnership) published a background paper titled, ‘Adaptation Metrics: Current Landscape and Evolving Practices,’ covering the areas of agriculture and food security, cities, and finance and investments. The authors highlight emerging lessons, including the value of: clarity and transparency of adaptation metrics; understanding adaptation outcomes beyond simple monitoring; and comparability, consistency and comprehensiveness of adaptation frameworks and associated indicators.
* * *
The SDG Knowledge Hub publishes monthly climate finance updates, which largely focus on multilateral financing and cover, inter alia, mitigation and adaptation project financing news and lessons, institutional events and news, and latest developments in carbon markets and pricing. Past climate finance updates can be found under the tags: Finance Update: Climate Change; and Finance Update: Sustainable Energy.