![]() “We also need to engage the business community to explore how to make the challenges brought by climate change into an opportunity to create business and livelihood options.” “We cannot rely on domestic resources or donor contribution to invest in climate change,” says Rufo. Research by the CPI indicates that 98% of adaptation finance in 2019-2020 was provided by public organisations. View all newsletters Sign up to our newsletter ESG data, insights and analysis delivered to you By The Capital Monitor team Sign up here “We know the challenge of adaptation finance is enormous.” “We’re making good progress, but good progress is not enough,” says Lorie Rufo, senior climate change specialist at Climate Investment Funds (CIF), a multilateral climate finance mechanism for developing countries, based in Washington DC. Kemmerich and two other specialists discussed the topic during the same panel. Nonetheless, solutions aimed at delivering private-sector investment are emerging, say industry practitioners looking to engage the private sector and mobilise more investment for adaptation projects. He was speaking on a panel at Capital Monitor’s annual Making Sense of Net Zero event earlier this month. In addition, rising interest rates and broader market concerns may act as further barriers to private investment in adaptation finance, said Florian Kemmerich, managing partner at Bamboo Capital Partners, which focuses on such projects. However, specialists cite several reasons why delivering adaptation finance is a major challenge, including tracking the efficacy of adaptation finance, a lack of common impact metrics, returns often below commercial rates and an absence of comprehensive national adaptation plans. ![]() Yet the amount is still a small fraction of the $155bn-330bn needed annually for adaptation in developing countries, as estimated by the UN Environment Programme’s Adaptation Gap Report 2021, published in November last year (see also chart below). ![]() Some $46bn of adaptation finance was delivered in 2019-2020, according to think tank the Climate Policy Initiative (CPI), up 53% from $30bn in 2017-2018. Witness the catastrophic consequences of climate change such as the recent floods in Pakistan or the record-breaking drought in China. ![]() Yet it seems inevitable that many communities will need help living with environmental change, as hopes fade that the world will achieve a 1.5C-or-below warming trajectory. The lion’s share of climate finance flows into change mitigation – projects or solutions to prevent or reduce greenhouse gas emissions – with a far smaller pool of capital going towards funding for environmental adaptation and resilience. … but firms such as Bamboo Capital Partners, Climate Investment Funds and Lightsmith Group are working on new approaches to address the challenges.Issues such as tracking adaptation finance and measuring its efficacy and impact are holding up development.Capital committed to climate adaptation and resilience makes up a small fraction of climate finance.Pakistan’s record floods this year illustrate that adapting to climate change will be a lot more difficult for some than others. SDG 16, Peace, Justice and Strong Institutions.SDG 12, Responsible Consumption and Production.SDG 11, Sustainable Cities and Communities.SDG 9, Industry Innovation and Infrastructure.
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