The level of finance available to help developing countries adapt to intensifying climate impacts continues to fall short compared with money spent to reduce emissions. Wealthy nations’ long-standing pledge to provide $100 billion annually by 2020 to help developing nations adapt to the climate crisis has still not been met.
The Organisation for Economic Co-operation and Development (OECD) released data in September showing that developed countries provided only around $80 billion in climate finance in 2019, with just one-fifth mobilized to help communities adapt and become more resilient to climate change. Meanwhile, 70% of public finance was given out as loans instead of grants, which will push some nations into more debt. It cannot be justifiable to add to their indebtedness and ask countries to pay for the adaptation and transition responses to the systemic challenges of climate change they did not create.
Earlier this year, the final agreements from this year's G7 Summit were published, featuring unrealized commitments to get back on track to deliver $100 billion of climate finance to less wealthy nations. However, the scale of finance required is now greater, the costs are increasing and the $100 billion per annum target is too low and needs to be increased. Additional finance is also required to deliver on the loss and damage commitments covered in Article 8 of the Paris Agreement and in the Warsaw Mechanism. Failure by the developed nations to provide adequate support to developing countries has damaged the relationships between the North and South, and places a shadow over the success of COP26 climate talks.
In addition to the challenge of mobilizing private investment to close the adaptation finance gap, success also requires a clear understanding of what is meant by resilience. Resilience is a relative term, not an absolute one. One has to be resilient to something. The challenges to resilience also look very different depending on where you are in the world, your gender, income, and the society, economy and environment in which you live. This means that the planning required to bounce back from impacts of climate change – climate resilience – requires that climate risks be more fully understood.
On a practical level, the public sector working with non-government organizations (NGOs), civil society organizations (CSOs) and activist groups has a fundamental role to play in raising awareness about what climate resilience is and facilitating a collective understanding for what resilience means for stakeholders from different geographies, sectors and backgrounds, while considering their specific vulnerabilities. Crucially, it is also well-placed to identify systemic risks that emerge across society, the economy and the environment.
Private finance leveraged by developed countries can help to increase finance from billions to trillions, filling the financing gap international financial institutions and multilateral development banks have long promoted. The need for mobilization is enshrined within the Paris Agreement. However, in 2019 private finance mobilized by countries for climate finance fell by 4%, according to OECD data. Limited knowledge around the investment potential in adaptation hinders private sector contributions to this area. While public climate finance alone will not meet the climate impact costs and associated investment needs, no clear incentive is given to private sector actors to contribute, and by the same token, to ensure economies’ long-term resilience.
Even though the pace of adaptation financing is actually rising, it continues to be outpaced by rapidly increasing costs, which is why there has never been a more critical time for the private sector to help close the investment gap needed for effective climate adaptation.
There are past and future factors that should influence our decision making as they will also determine how we think about resilience and identify adaptation actions. For example, historic loss and damage has restricted communities’ ability to be resilient to climate change. Future loss and damage will further limit this ability.
It is also important to acknowledge and address how resilience options are being impacted by these past harms and understand how future impacts are likely to alter the viable and available actions for communities and ecosystems around the world. There is an issue of climate justice to be considered: Should developed countries pay developing countries financial reparations for the damage caused from historic and continuing emissions?
Adaptation is a process for change, and resilience is the hoped-for outcome. Just engaging in some form of adaptation does not guarantee resilience – it has to be the right sort of action, designed and deployed at the right time, in the right spaces, for the right people, for it to result in resilience. Resilience thinking is understanding how different actions come together to enhance the ability of an individual, community, country or organization to withstand different shocks and stresses over time. When decision-making processes fail to consider resilience in this multifaceted and holistic way, they are likely to deploy the wrong sorts of actions, at the wrong time, for the wrong people. At its worst, actions may be taken that undermine resilience.
The fact that we have been talking for 27 years with no reduction in emissions illustrates the lack of success so far. What is also clear from current trends is that there continues to be a stark difference between the identified financing needs of climate-vulnerable countries and where finance actually goes – and that global climate finance needs are not being met.
But we have to hope and we have to increase our commitment to delivering the changes needed. The critical issue for COP26 is not to claim success by agreeing to new policies, but to first demonstrate that all voices have been heard and then how our collective ambitions will be implemented and financed on the ground with a clear delivery timetable.
