Mitigation and decarbonization efforts are falling short of the 1.5°C goal, making adaptation critical. Developing economies are affected the most, despite having contributed the least to the problem. Nearly 98 percent of adaptation finance comes from public actors, with highly fragmented flows from the private sector. As financing needs increase, bringing private sector finance becomes critical and requires reframing adaptation investments from being seen not just as a risk exposure but also as an investment opportunity. This requires addressing real and perceived investment barriers, public-private collaboration and risk sharing, as well as financial incentives and innovation to unlock scalable, inclusive solutions. Adaptation is more complex than mitigation, with challenges in defining, evaluating, pricing, and scaling investments. Progress on adaptation requires policy reforms, incentives, and partnerships between governments, businesses, and communities and public-private risk sharing.
Authors
Deepali Gautam, Ekaterina Gratcheva, Fabio M Natalucci, Ananthakrishnan Prasad
- DOI
- https://doi.org/10.5089/9798400293290.066
- ISBN
- 9798400293290
- ISSN
- 2789-0600
- Issue
- 007
- Pages
- 36
- Published in
- United States of America
- StockNumber
- CLNEA2024007
- Volume
- 2024
Table of Contents
- Unlocking Adaptation Finance in Emerging Market and Developing Economies -1
- Executive Summary: Key Messages -1
- Current State of Adaptation Landscape and Emergence of the Resilience and Sustainability Trust -1
- Adaptation Finance: Definitions, Measurements, and Uncertainty -1
- Adaptation Finance in Emerging Market and Developing Economies -1
- Ecosystem -1
- Key Constituents -1
- State of Adaptation Investments -1
- Blended Finance: Underused in Adaptation to Date with Significant Potential -1
- Green, Sustainable, and Sustainability-Linked Bonds: Limited Coverage of Adaptation and Resilience -1
- Multilateral Development Banks: Growing Focus on Adaptation and Innovation with Potential Trade-Offs across Other Areas -1
- Public Equity Investments in Climate Resilience: An Emerging Theme -1
- Barriers to Scaling up Adaptation Finance in EMDEs -1
- Policy Recommendations for Addressing the Adaptation Finance Gap -1
- Defining Adaptation -1
- Improving Adaptation Data and Measurement Methodologies -1
- Balancing Mitigation and Adaptation -1
- Integrating Adaptation into National and Sectoral Planning -1
- Expanding Integration of Adaptation across All Asset Classes and Climate Projects -1
- Supporting Vulnerable Countries -1
- Building Capacity -1
- Role of the Resilience and Sustainability Trust -1
- Summary -1
- Box 2. Emerging Market and Developing Economies: Evolving Investment Context -1
- Annex 1. Overview of the Market Participants Perspective on Mitigation versus Adaptation -1
- Annex 2. Definition of Adaptation across Adaptation Finance Ecosystem -1
- Annex 3. Evolution of “Adaptation Finance” in Global Climate Negotiations -1
- Bibliography -1
