Mobilizing development finance for strategic and scaled-up investment in climate adaptation
Financial resources intended to support developing countries’ response to climate change are expected to strike a balance between mitigation (reducing or curbing emissions that cause climate change) and adaptation (reducing vulnerability to the effects of climate change). However, yearly investments in adaptation only comprise approximately one-fifth of the minimum requirement of $100 billion per year. New and substantial financing mechanisms for developing countries are needed to invest in adaptation and resilience, but how this can be achieved is still under debate.
Important parallel debates over the roles of international financing institutions, such as multilateral development banks, to effectively integrate resilience and adaptation-related issues into traditional development financing are also taking place. In recent years, consensus has grown over the need for innovative financing instruments to scale up and align climate adaptation finance with country-driven needs, which requires a better understanding of what counts as adaptation/resilience investment; metrics for measuring and integrating resilience thinking into development financing; strategies for aligning national adaptation plans and/or nationally determined contributions to international development financing requirements; financing instruments specific to adaptation; and how mainstreaming adaptation into development financing helps to leverage private sector investment.
Implemented in collaboration with the Winnipeg-based International Institute for Sustainable Development, this project will examine current and past efforts to integrate or mainstream climate adaptation into development finance in order to scale up more strategic and responsive investments in climate-resilient development in low-income countries. This includes identifying key challenges and entry points for accelerating progress; adaptation priorities that would be best addressed through more adaptation-friendly development finance; and piloting the use of innovative financing instruments to attract private sector investments.