Investing in climate resilience means doing development differently
By Megan Rowling
Funding for adaptation to climate change can also help meet other global goals - but far more money is needed
If the problems of an impoverished community afflicted by worsening drought are solved by providing a piped water supply, does it matter if that work is classed as a development or climate change adaptation project? To those now able to drink clean water and irrigate their crops, the answer is likely “no”.
For the funder of the project, the situation is often more complex. The debate rumbles on over whether government money earmarked for climate action should be used for wider purposes - for example, to improve water supplies or healthcare for people bearing the brunt of wilder weather and rising seas.
While it may seem arcane, if an adaptation project is not tightly focused on directly managing climate risks, it may not get funding, as has happened with an Ethiopian proposal at the multi-billion-dollar Green Climate Fund last year.
Conversely, not all work counted as adaptation by its financial backers is correctly defined as such, experts told a panel discussion on investing in climate resilience, hosted by Zilient.
But the time has come to stop splitting hairs, they said.
"It's really not a question of whether something is adaptation or development," Niranjali Amerasinghe, a senior associate at the Sustainable Finance Center of the World Resources Institute (WRI).
Adaptation should rather be "about doing development differently in response to climate risks and vulnerabilities", and drawing a line between the two is not helpful, she added. A water supply project, for example, can tick both boxes.
WRI is working with the Green Climate Fund on an approach to adaptation that takes this broader perspective into account, she noted.
Sven Harmeling, global policy lead for climate change and resilience with aid agency CARE International, said putting money into adaptation efforts that do not yield benefits for people's wider development - such as reducing poverty or empowering women - has limited value.
A sound approach is to work with communities to understand and map the climate risks they face, and then identify specific steps to address them at the local level, he said.
Programmes supported by big international climate funds should find ways to include they people they aim to help more closely in their design, he and other experts argued.
Liane Schalatek, associate director of the Heinrich Böll Foundation North America and an observer at Green Climate Fund board meetings, said investments in climate resilience needed to be centred more on people and their human rights - something the fund could lead on once it has finalised policies guiding how its money is used.
In general, a lot of climate resilience work in cities, for instance, is "focused on urban infrastructure and too little on the social systems", often overlooking the needs and concerns of slum dwellers, she added.
More money needed
Irrespective of the labels attached to projects, the panelists said far higher sums of money are needed to help vulnerable people and places cope with the consequences of a fast-warming planet.
While estimates of finance for adaptation are imprecise, most put its share at little more than 15-20 percent of government funding for climate action.
The Green Climate Fund aims for a 50-50 split between adaptation and activities that reduce emissions. Of the $3.5 billion it has allocated so far, about 30 percent is for adaptation, 40 percent for mitigation, and the rest addresses both, with the projects anticipated to increase the resilience of 217 million people.
Even if governments and multilateral institutions like development banks do bring climate considerations into their thinking, "the reality is that the supply of finance (for adaptation) is so low comparative with the costs", said WRI's Amerasinghe. "We definitely need more funding dedicated to climate adaptation."
Not only that, but wealthy countries must pay more attention to tackling gender inequality when deciding how to use that funding, said Harmeling.
New research from CARE shows some donors, including the United States, Canada and Germany, have a better track record on gender than others such as Japan, France and Italy, leaving room for improvement, he added.
Another weakness in donor approaches is promoting insurance as the best way of dealing with growing losses from climate-linked disasters, said Schalatek.
Research published this month by the Heinrich Böll Foundation showed that in the case of Hurricane Maria, which a year ago caused damage in the island nation of Dominica estimated at $1.37 billion, sovereign insurance under the Caribbean Catastrophe Risk Insurance Facility covered just 1.5 percent of losses.
And when Malawi was hit by an extended drought after a once-in-500-years flood in 2015, it received a payout covering little more than 2 percent of its humanitarian needs a full nine months after declaring an emergency, the report showed.
Schalatek told the webinar insurance is "not a silver bullet", and while it can be part of the solution, it should not distract from more cost-effective options such as providing developing countries with money to build up social safety nets or relocate people.
A global solidarity fund for developing countries hit by climate disasters would bring equity and fairness to the climate finance debate, she argued.
At the same time, the private sector - often with support from international financial institutions - is showing more interest in investing in projects that build resilience to climate change, especially in sectors like city infrastructure and agriculture.
Yet Olha Krushelnytska, who works on green finance at the Global Environment Facility (GEF), told the discussion large barriers remain, particularly in terms of countries lacking the policies, laws and regulations investors require, on things from land and property rights to carbon taxes.
The GEF and other development finance organisations can help governments put those in place, while taking on some of the higher risks of projects through different types of finance to make them more attractive to for-profit investors, she added.
New initiatives are starting to emerge in tandem with the growth of the green bond market, such as the Coalition for Private Investment in Conservation, which is trying to come up with templates for bankable projects that can be grouped together on a big-enough scale for the market, she noted.
And there is a shift in thinking around how to appraise the results of projects, she said, from a narrow focus on inputs and outputs to a wider view of how far they reduce flooding, improve people's health or ease migration pressures.
More broadly, the discussion pointed to a shared interest in meeting the globally agreed Sustainable Development Goals as a rallying point for those seeking to scale up funding to cope with climate change.
"There is growing attention to bringing the adaptation and resilience needs together with the development needs," said CARE's Harmeling.