Flows of international public funding to developing countries to adapt to climate change are between 10 and 18 times less than what they need, a new assessment by experts has found. They warn that new and innovative sources of financing are urgently needed to fill the gap as climate disasters accelerate.
This update is included in the latest edition of the United Nations Environment Programme. Adaptation Gap Reportwas announced ahead of the COP28 United Nations climate change negotiations to be held in the United Arab Emirates from November 30 to December 12.
According to UNEP, the fiscal gap is currently estimated at between US$194 billion and US$366 billion annually, more than 50% higher than previous estimates. According to UNEP research, this is due to increased needs, more comprehensive assessments, and a 15% decline in international public financial flows in 2021. That decline has fallen to $21 billion, even as the frequency and intensity of storms, floods, droughts, and heat waves have increased.
Historically, adaptation has received a lower funding priority than mitigation, confounding developing countries.Many fall further into debt According to the International Institute for Environment and Development (IIED) think tank, this is to cover the cost of disaster recovery.
Adaptation funding decreased from $25.2 billion in 2020 to $21 billion in 2021. During COP26 at the end of the same year, governments pledged to double adaptation financing from 2019 levels to $40 billion by 2025. On the other hand, I understand that mitigation funds are continuously increasing.
The adaptation financing gap is widening, so even if the $40 billion pledge were met, which UNEP considers unlikely, the gap would only shrink by 5-10%. the report states.
The report makes seven recommendations to increase adaptation funding, the main three being:
1. Increase international adaptation funding
New climate finance targets for 2025 and beyond, on the agenda of COP28, could increase the amount and proportion of money earmarked for adaptation projects.
2. Track domestic spending
Governments need to strengthen monitoring of grants and their impacts to increase awareness among policymakers to incorporate adaptation into budget planning.
3. mobilize private investment
Governments could encourage businesses and private investors to finance adaptation projects by providing guarantees, insurance, concessional loans and subsidies. The report cites that road tunnels developed by the Malaysian government were also designed to divert rainwater. Recognizing the public interest in rainwater diversion, it secured private investment by allowing private investors to charge fees to vehicles using the tunnel.
The report emphasizes that adapting to climate change is an economic imperative. Every $1 billion he invests in protecting coasts from flooding will reduce economic damage by $14 billion. Investing US$16 billion a year in agricultural resilience could prevent around 78 million people from starvation or chronic hunger, the report said.
Too little international climate finance reaches the people and communities who actually feel the impacts
Tom Mitchell, International Institute for Environment and Development
Ibrahim Thiau, Executive Director of the United Nations Convention on Desertification, said at a press conference announcing the report that adaptation is not just an issue for developing countries, but for global businesses.
“We invest in adaptation not just because we want to do good for humanity,” he says. “You invest in it because you want it to be good for your business. Companies in agri-food systems and other companies that use natural capital need to invest in sustaining and sustaining production. ”
However, UNEP also emphasized the need for new and innovative sources of financing, including remittances from migrants to their families back home and the expansion and coordination of loans to small and medium-sized enterprises.
Tom Mitchell, IIED’s executive director, said reducing the cost of sending money between countries would ensure more money reaches those on the front lines of climate change.
“Too much money is lost in bureaucracy because too little international climate finance reaches the people and communities who are actually feeling the impacts,” he says.
It also supports reforms to the global financial structure, including lending through the World Bank and the International Monetary Fund (IMF), as proposed by Barbados Prime Minister Mia Mottley’s Bridgetown Initiative.
Mitchell agreed that global financial reform was “long overdue.” But he pointed out that there are other ways developing countries can be supported within the current system. for example, debt exchange He says it could be used for climate, nature or innovative health systems, allowing governments to spend millions of dollars building resilience.
Loss and damage
UNEP also found that progress was slow in planning and implementing adaptation policies. It found that while five out of six countries have at least one national adaptation plan, strategy or policy, the number has plateaued and projects are slowing down.
Failure to finance, plan and implement climate adaptation has a significant impact on ‘loss and damage’, which is addressed for the first time in the report. This refers to the negative impacts of climate change, such as sea level rise and species extinction, that cannot be avoided through mitigation and adaptation efforts.
It is estimated that the 55 most vulnerable economies alone to climate change are experiencing losses and damages such as: 525 billion USD In the last 20 years. UNEP says these costs will rise sharply in the coming decades, especially if efforts to reduce emissions and adapt to climate change are not prioritized now.
UNEP said a new international loss and damage fund would also be an important tool to mobilize resources. At COP27 in Egypt, which was a major coup for developing countries, countries agreed to create a fund.
Developing and developed countries were at odds over who would host the fund. in october they compromise The World Bank will serve as interim host for four years. Negotiators will discuss this recommendation at COP28.
The UNEP report’s chief scientific editor, Henry Neufeldt, warned that the cost of responding to extreme weather events is much higher than preparing in advance, and that failure to prepare increases future losses and compensation payments.
Regarding the risk that funds needed for adaptation will be lost or damaged, or vice versa, he said: At the expense of adaptation. ”