Finance for adaptation
Finance for nature-based solutions should be strengthened and diversified. As temperatures rise and climate change impacts intensify, nations must urgently step up action to adapt to the new climate reality or face serious costs, damages and losses, the 2020 edition of the UN Environment Programme (UNEP) Adaptation Gap Report finds.
Annual adaptation costs in developing countries alone are estimated at USD 70 billion. This figure is expected to reach USD 140-300 billion in 2030 and USD 280-500 billion in 2050. An increase in financing will be critical for countries to meet their adaptation goals.
There have been encouraging developments in the private financing:
- An analysis of four major climate and development funds – the Global Environment Facility, the Green Climate Fund, the Adaptation Fund and the International Climate Initiative – suggested that support for green initiatives has risen over the last two decades. Cumulative investment for climate change mitigation and adaptation projects under the four funds stood at USD 94 billion. But, only USD 12 billion of this funding was spent on nature-based solutions.
- The Green Climate Fund has allocated 40 per cent of its portfolio to adaptation and is increasingly crowding-in private sector investment.
The Adaptation Gap Report 2020 recommends tools such as sustainability investment criteria, climate-related disclosure principles to stimulate investments in climate resilience. Finance for nature-based solutions should also be strengthened and diversified through mechanisms that combine public and private sources of funding.