POLITICAL ECOLOGY
As climate impacts accelerate, finance gap for adaptation efforts at least 50% bigger than thought
Reports and Proceedings- Finance needs of developing countries now 10-18 times as big as international public finance flows
- Growing gap results from rising adaptation needs and faltering adaptation finance
- Failure to enhance adaptation has huge implications for losses and damages
Nairobi, 2 November 2023 – Progress on climate adaptation is slowing on all fronts when it should be accelerating to catch up with rising climate change impacts and risks, according to a new United Nations Environment Programme (UNEP) report.
Released ahead of the COP28 climate talks taking place in Dubai, United Arab Emirates, the Adaptation Gap Report 2023: Underfinanced. Underprepared – Inadequate investment and planning on climate adaptation leaves world exposed finds that the adaptation finance needs of developing countries are 10-18 times as big as international public finance flows – over 50 per cent higher than the previous range estimate.
"Today’s Adaptation Gap Report shows a growing divide between need and action when it comes to protecting people from climate extremes. Action to protect people and nature is more pressing than ever," UN Secretary-General António Guterres said in his message on the report. “Lives and livelihoods are being lost and destroyed, with the vulnerable suffering the most.”
"We are in an adaptation emergency. We must act like it. And take steps to close the adaptation gap, now," he added.
As a result of the growing adaptation finance needs and faltering flows, the current adaptation finance gap is now estimated to be US$194-366 billion per year. At the same time, adaptation planning and implementation appear to be plateauing. This failure to adapt has massive implications for losses and damages, particularly for the most vulnerable.
“In 2023, climate change yet again became more disruptive and deadly: temperature records toppled, while storms, floods, heatwaves and wildfires caused devastation,” said Inger Andersen, Executive Director of UNEP. “These intensifying impacts tell us that the world must urgently cut greenhouse gas emissions and increase adaptation efforts to protect vulnerable populations. Neither is happening.”
“Even if the international community were to stop emitting all greenhouse gases today, climate disruption would take decades to dissipate,” she added. “So, I urge policymakers to take heed of the Adaptation Gap Report, step up finance and make COP28 the moment that the world committed fully to insulating low-income countries and disadvantaged groups from damaging climate impacts.”
Finance, planning and implementation waning
After a major update over previous years, the report now finds that the funds required for adaptation in developing countries are higher – estimated to be in a plausible central range of US$215 billion to US$387 billion per year this decade.
The modelled costs of adaptation in developing countries are estimated at US$215 billion per year this decade and are projected to rise significantly by 2050. The adaptation finance needed to implement domestic adaptation priorities, based on extrapolation of costed Nationally Determined Contributions and National Adaptation Plans to all developing countries, is estimated at US$387 billion per year.
Despite these needs, public multilateral and bilateral adaptation finance flows to developing countries declined by 15 per cent to US$21 billion in 2021. This dip comes despite pledges made at COP26 in Glasgow to deliver around US$40 billion per year in adaptation finance support by 2025 and sets a worrying precedent.
While five out of six countries have at least one national adaptation planning instrument, progress to reach full global coverage is slowing. And the number of adaptation actions supported through international climate funds has stagnated for the past decade.
Innovative ways to deliver finance essential
Ambitious adaptation can enhance resilience – which is particularly important for low-income countries and disadvantaged groups – and head off losses and damages.
The report points to a study indicating that the 55 most climate-vulnerable economies alone have experienced losses and damages of more than US$500 billion in the last two decades. These costs will rise steeply in the coming decades, particularly in the absence of forceful mitigation and adaptation.
Studies indicate that every billion invested in adaptation against coastal flooding leads to a US$14 billion reduction in economic damages. Meanwhile, US$16 billion per year invested in agriculture would prevent approximately 78 million people from starving or chronic hunger because of climate impacts.
However, neither the goal of doubling 2019 international finance flows to developing countries by 2025 nor a possible New Collective Quantified Goal for 2030 will significantly close the adaptation finance gap on their own and deliver such benefits.
This report identifies seven ways to increasing financing, including through domestic expenditure and international and private sector finance. Additional avenues include remittances, increasing and tailoring finance to Small and Medium Enterprises, implementation of Article 2.1(c) of the Paris Agreement on shifting finance flows towards low-carbon and climate resilient development pathways, and a reform of the global financial architecture, as proposed by the Bridgetown Initiative.
The new loss and damage fund will also be an important instrument to mobilize resources, but issues remain. The fund will need to move towards more innovative financing mechanisms to reach the necessary scale of investment.
NOTES TO EDITORS
About the UN Environment Programme (UNEP)
UNEP is the leading global voice on the environment. It provides leadership and encourages partnership in caring for the environment by inspiring, informing and enabling nations and peoples to improve their quality of life without compromising that of future generations.
For more information please contact:
News and Media Unit, UN Environment Programme
- Finance needs of developing countries now 10-18 times as big as international public finance flows
- Growing gap results from rising adaptation needs and faltering adaptation finance
- Failure to enhance adaptation has huge implications for losses and damages
Nairobi, 2 November 2023 – Progress on climate adaptation is slowing on all fronts when it should be accelerating to catch up with rising climate change impacts and risks, according to a new United Nations Environment Programme (UNEP) report.
Released ahead of the COP28 climate talks taking place in Dubai, United Arab Emirates, the Adaptation Gap Report 2023: Underfinanced. Underprepared – Inadequate investment and planning on climate adaptation leaves world exposed finds that the adaptation finance needs of developing countries are 10-18 times as big as international public finance flows – over 50 per cent higher than the previous range estimate.
"Today’s Adaptation Gap Report shows a growing divide between need and action when it comes to protecting people from climate extremes. Action to protect people and nature is more pressing than ever," UN Secretary-General António Guterres said in his message on the report. “Lives and livelihoods are being lost and destroyed, with the vulnerable suffering the most.”
"We are in an adaptation emergency. We must act like it. And take steps to close the adaptation gap, now," he added.
As a result of the growing adaptation finance needs and faltering flows, the current adaptation finance gap is now estimated to be US$194-366 billion per year. At the same time, adaptation planning and implementation appear to be plateauing. This failure to adapt has massive implications for losses and damages, particularly for the most vulnerable.
“In 2023, climate change yet again became more disruptive and deadly: temperature records toppled, while storms, floods, heatwaves and wildfires caused devastation,” said Inger Andersen, Executive Director of UNEP. “These intensifying impacts tell us that the world must urgently cut greenhouse gas emissions and increase adaptation efforts to protect vulnerable populations. Neither is happening.”
“Even if the international community were to stop emitting all greenhouse gases today, climate disruption would take decades to dissipate,” she added. “So, I urge policymakers to take heed of the Adaptation Gap Report, step up finance and make COP28 the moment that the world committed fully to insulating low-income countries and disadvantaged groups from damaging climate impacts.”
Finance, planning and implementation waning
After a major update over previous years, the report now finds that the funds required for adaptation in developing countries are higher – estimated to be in a plausible central range of US$215 billion to US$387 billion per year this decade.
The modelled costs of adaptation in developing countries are estimated at US$215 billion per year this decade and are projected to rise significantly by 2050. The adaptation finance needed to implement domestic adaptation priorities, based on extrapolation of costed Nationally Determined Contributions and National Adaptation Plans to all developing countries, is estimated at US$387 billion per year.
Despite these needs, public multilateral and bilateral adaptation finance flows to developing countries declined by 15 per cent to US$21 billion in 2021. This dip comes despite pledges made at COP26 in Glasgow to deliver around US$40 billion per year in adaptation finance support by 2025 and sets a worrying precedent.
While five out of six countries have at least one national adaptation planning instrument, progress to reach full global coverage is slowing. And the number of adaptation actions supported through international climate funds has stagnated for the past decade.
Innovative ways to deliver finance essential
Ambitious adaptation can enhance resilience – which is particularly important for low-income countries and disadvantaged groups – and head off losses and damages.
The report points to a study indicating that the 55 most climate-vulnerable economies alone have experienced losses and damages of more than US$500 billion in the last two decades. These costs will rise steeply in the coming decades, particularly in the absence of forceful mitigation and adaptation.
Studies indicate that every billion invested in adaptation against coastal flooding leads to a US$14 billion reduction in economic damages. Meanwhile, US$16 billion per year invested in agriculture would prevent approximately 78 million people from starving or chronic hunger because of climate impacts.
However, neither the goal of doubling 2019 international finance flows to developing countries by 2025 nor a possible New Collective Quantified Goal for 2030 will significantly close the adaptation finance gap on their own and deliver such benefits.
This report identifies seven ways to increasing financing, including through domestic expenditure and international and private sector finance. Additional avenues include remittances, increasing and tailoring finance to Small and Medium Enterprises, implementation of Article 2.1(c) of the Paris Agreement on shifting finance flows towards low-carbon and climate resilient development pathways, and a reform of the global financial architecture, as proposed by the Bridgetown Initiative.
The new loss and damage fund will also be an important instrument to mobilize resources, but issues remain. The fund will need to move towards more innovative financing mechanisms to reach the necessary scale of investment.
NOTES TO EDITORS
About the UN Environment Programme (UNEP)
UNEP is the leading global voice on the environment. It provides leadership and encourages partnership in caring for the environment by inspiring, informing and enabling nations and peoples to improve their quality of life without compromising that of future generations.
For more information please contact:
News and Media Unit, UN Environment Programme
Warming world, widening gap: climate change’s toll on poverty and inequality in South Africa
Scientific evidence shows that climate change is already negatively affecting inequality and poverty, but the extent to which this happens at the micro-level remains relatively unexplored. Investigating the distributional effects of climate change at the micro-level is particularly relevant in low- or middle-income countries, where vulnerable populations are more susceptible to its impacts.
A new paper published in Environmental Research Letters investigates the relationship between temperature and inequality, poverty and welfare in South Africa at the national and sub-national level and highlights – in addition to the need for climate change adaptation – the co-benefits of decarbonization in reducing socioeconomic disparities among affected communities.
The study was conducted by a team of researchers from CMCC@Ca’Foscari, the strategic partnership between CMCC Foundation and Ca’ Foscari University of Venice, RFF-CMCC European Institute on Economics and the Environment (EIEE) and London School of Economics and Political Science (LSE).
Authors find that the relationship between temperature and inequality and poverty is non-linear, with inequality lowest at moderate temperatures. However, once temperatures increase beyond a certain threshold (15-17°C), the inequality gap among different income groups widens, threatening the livelihood of the most vulnerable communities.
This effect is particularly noticeable for the poorer segments of the population, whose productivity and wages decline as temperatures increase, while the impact on the richer segments is less significant due to their greater adaptive capacity. In particular, agricultural households are more likely to experience an increase in inequality due to warming.
Through projections under multiple warming scenarios, authors find that climate change is expected to reduce average growth and exacerbate inequalities in the future. Comparing the outcomes of the moderate Representative Concentration Pathway scenario (RCP6.0) to a reference scenario without warming they found that, by the end of the century, the Gini coefficient – a statistical measure of economic inequality in a population – in South Africa is expected to increase by 3 to 6 points. This would result in a potential welfare loss of approximately 50% when combined with the impact of warming on GDP (which alone can reach up to 43% by 2100 in South Africa).
Unless climate change policies incorporate inequality in their design, authors conclude, they may have unintended consequences and increase the burden on disadvantaged groups.
Authors’ quotes:
“Climate change not only increases inequality, but increased inequality exacerbates many of the climate change-induced impacts on society through increased exposure and vulnerability. Without strong mitigation efforts – welfare and wellbeing will worsen substantially due to future climate change” says Shouro Dasgupta, a researcher at CMCC, Ca’ Foscari University of Venice, and Visiting Senior Fellow at the Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science (LSE).
“Well-informed and community-specific adaptation policies can reduce the negative consequences of excess warming while harnessing the potential benefits of keeping temperature increases to moderate levels,” says Soheil Shayegh, a scientist at RFF-CMCC European Institute on Economics and the Environment (EIEE).
“That climate change is likely to affect not only biophysical systems, but also the economy is now widely accepted. However, less is known on how this economic impact is distributed across different households. We find here for the case of South Africa that global warming will hit poorer households harder, thus leading to an increase in inequality. Climate mitigation is therefore crucial not only from an ecological, economic, but also inequality perspective” says Johannes Emmerling, senior scientist at RFF-CMCC European Institute on Economics and the Environment (EIEE).
For more information:
Dasgupta, S., Emmerling, J., and Shayegh, S. (2023). Inequality and growth impacts of climate change – insights from South Africa. Environmental Research Letters. https://doi.org/10.1088/1748-9326/ad0448.
JOURNAL
Environmental Research Letters
ARTICLE TITLE
Inequality and growth impacts of climate change—insights from South Africa
ARTICLE PUBLICATION DATE
2-Nov-2023
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