Engaging the private sector to finance climate change adaptation

By Fatima Arkin

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Much of the discussion at the U.N. climate change conference underway in Marrakesh is how to get more international public financing to incentivize both international and domestic private sector engagements, including for adaptation.

Liane Schalatek, associate director of the Heinrich Böll Foundation North America said that currently, most private sector investments in adaptation finance, both domestic and international, focuses on insurance schemes, such as microinsurance schemes to provide support to individual households or small-scale farmers in cases of drought and flooding.

“This is certainly some area, which could be further developed and the G-7 and other industrialized countries have supported such ‘InsResilience’ approaches,” she added.

Private sector investment can also come via adaptation-related infrastructure measures. But Schalatek cautioned that when designing such private-public partnerships one would need to insure the private sector’s need to make a buck is not undermining the public service provision. For example, it would be a counterproductive use of scarce public finances to raise a road to make it less prone to flooding, but then deny access to people unable to pay a user fee.      

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