Climate Change
Climate Diplomacy

Momentum on Climate Adaptation

Briefing Series: What Congress Needs to Know in the Lead Up to COP26

October 15, 2021

What Congress Needs to Know in the Lead Up to COP26: Briefing Series on the U.N. Climate Change Conference in Glasgow

Find out more about the briefings in this series below:
Part 1 Creating Policies, Coalitions, and Actions for Global Sustainable Development
Part 2 Momentum on Climate Adaptation
Part 3 The Role of International Climate Finance
Part 4 The Negotiations: What’s on the Table
Conclusion Recap of COP26: Key Outcomes and What Comes Next

The Environmental and Energy Study Institute (EESI) held a briefing series on what Congress needs to know in the lead-up to the 26th Conference of the Parties (COP26) to the United Nations Framework Convention on Climate Change.

Climate adaptation is one of the priority work areas for COP26. This briefing focused on the initiatives launched or scaled up in recent years that underpin the momentum on adaptation and resilience and that will inform conversations at COP26. Speakers will discuss national adaptation plans, country dialogues on adaptation, early-warning systems, and locally-led adaptation. The briefing explored how these efforts advance work towards the global goal on adaptation ‘to enhance adaptive capacity and reduce vulnerability.’

This briefing series was co-sponsored by the British Embassy Washington.

We are grateful for the partnership with the Henry M. Jackson Foundation that helped make this briefing possible.

Highlights

 

Gonzalo Muñoz, High-Level Climate Champion for Climate Action

  • Ensuring early warning systems and action plans against climate disasters are in place for one billion people by 2025.
  • Creating local adaptation plans. The Risk-informed Early Action Partnership is already taking a leading role in this effort.
  • Climate-proof key infrastructure and services, including water resources in developing countries.
  • None of these actions are achievable without the mobilization of financing. The financing gap between mitigation and adaptation must be closed.
  • Investing in climate adaptation will save money in the future. The benefit-cost ratio can range from 2:1 to 10:1.
  • Investments create jobs, make communities safer, and regenerate nature.

Ben Webster, Head of Secretariat, Risk-Informed Early Action Partnership (REAP)

  • Global efforts are often focused on reducing carbon emissions, but because some carbon emissions are baked-in, focusing on adaptation measures is important to avoid humanitarian disasters.
  • According to the World Meteorological Organization, more than 30 million people were displaced by climate-related disasters in 2020, and in the coming 10 years about 325 million very low-income people will be living in 49 of the most hazard-prone countries in the world.
  • Climate impacts already cost an estimated $70 billion per year, which could increase to over $300 billion per year by 2030.
  • Wealthy countries are also being impacted, as demonstrated by recent floods in Europe, heat waves in North America, and wildfires in Australia.
  • Research from the Global Commission on Adaptation suggests that the highest benefit-cost ratio for climate adaptation is obtained through investment in early warning systems.
  • The World Meteorological Organization and other organizations have been involved in initiatives to improve early warning infrastructure to raise alerts when extreme weather events are on the horizon.
  • But early warning systems are only as useful as the early action they trigger.
  • Early action is based on a forecast or collective risk analysis, and takes place before the hazard strikes; for example, rather than waiting for floods to arrive and responding reactively, action can take place before the floods strike to reduce their impact.
  • All evidence suggests early action saves lives, protects livelihoods, is more cost effective, and is more efficient for delivering assistance in advance of the impacts of the hazard.
  • In Bangladesh last year, there were forecasts of floods hitting particular rural communities. The Central Emergency Response Fund was able to react in a matter of hours to send assistance to communities that were likely to be impacted, before the floods arrived.
  • The problem with these approaches is they have remained at pilot or project level to date, so the Risk-informed Early Action Partnership (REAP) was formed in 2019 to scale up these approaches.
  • Scaling up means breaking down silos in the climate, development, and humanitarian communities to work together to solve problems. REAP brings together governments, civil society, international organizations, and the private sector to see if early warning systems can be embedded in policy and practice at a national level.
  • The REAP partnership was launched with four overarching targets:
    • At least 50 countries by 2025 have integrated climate adaptation and disaster risk management policies, plans, and legal frameworks to ensure that they reduce climate change impacts and exposure.
    • One billion more people are covered by financing and delivery mechanisms connected to effective, early action plans, ensuring they can act ahead of predicted disasters and crises.
    • $500 million is invested in early warning system infrastructure and institutions to target early action in ‘last/first mile’ communities, building on existing initiatives.
    • One billion more people are covered by new or improved early warning systems, connected to longer-term management systems, and supported by effective risk communication and public stakeholder dialogue to prompt informed action.
  • To achieve these targets, REAP has three major strands of work:
    • Generating political momentum behind this agenda through events, high-level champions, and communications to drive ambition and increase demand for early warning systems to make sure that governments are supporting these approaches and embedding them into policy and practice.
    • Creating an environment for practical solutions to flourish and scale, by focusing on reporting and accountability mechanisms, policy recommendations, tools and checklists, and capacity support.
    • Creating a marketplace where different partners across civil society, government, and the private sector can work together and find opportunities to align.
  • The upcoming COP26 discussions [U.N. climate talks] can help move this agenda forward in a variety of ways, including by:
    • Creating concrete Nationally Determined Contributions [national commitments] to greenhouse gas emission reduction to meet the goals of the Paris Agreement, along with risk-informed national adaptation plans.
    • Providing equal focus on mitigation and adaptation. Climate impacts are coming and millions of people around the world are already facing impacts, so adaptation is as critical as mitigation.
    • Delivering the $100 billion of international climate finance promised by wealthy countries, which still has not been achieved.
    • Acknowledging that loss and damage from climate change is a serious issue in the most vulnerable places and creating measures to support those communities.
    • Creating a fair, equitable, and transparent process to build greater trust between parties.
  • At COP26, REAP plans to share a vision of what early action at scale looks like, showcase examples from partners to inspire further action, and provide an opportunity to profile commitments towards the REAP targets from governments and other key partners.

Tamara Coger, Senior Associate, Climate Resilience Practice, World Resources Institute (WRI)

  • Ecosystems, infrastructure, and communities are already being affected by climate change, so investments are needed to adapt to climate impacts.
  • More climate finance is needed for the most vulnerable communities and countries to address the disproportionate impacts of climate change.
  • It is imperative that adaptation efforts are locally led, because local actors have first-hand knowledge of climate impacts and of creative solutions to cope. Locally led adaptation (LLA) leads to context-specific, agile, and diverse approaches to climate resilience.
  • Local partners should be centered in adaptation discussions by having agency over adaptation decisions and investments.
  • LLA is important everywhere. In Maine, for example, the lobster fishing industry has been affected by warming waters induced by climate change. Adaptation planning efforts involve lobster fishermen and women sharing their knowledge of the industry. Aligning their first-hand experiences with climate science to help the lobster fishery adapt is one of the many examples of prioritizing local communities in climate adaptation.
  • LLA might seem like an obvious solution, but funding for adaptation planning and decision-making processes is often not available, and tends to be top-down, making it difficult for local actors to access and influence planning and project design.
  • Less than 10 percent of global climate finance reaches local levels, and complex application processes and reporting requirements hamper access, among other issues.
  • Coordination must be improved across levels to make sure local priorities are put at the center of adaptation decisions.
  • WRI has co-developed eight principles for LLA:
    • Devolving decision making to the lowest appropriate level,
    • Addressing structural inequalities,
    • Providing patient and predictable funding that can be accessed more easily,
    • Investing in local capabilities to leave an institutional legacy,
    • Building a robust understanding of climate risk and uncertainty,
    • Flexible programming and learning,
    • Ensuring transparency and accountability, and
    • Collaborative action and investment.
  • There are increasing calls to support LLA globally, including through:
  • At COP26, the movement around LLA will be working to amplify voices from the frontlines, including by showcasing examples of projects on the ground; by presenting at the Resilience Hub; and by seeking more endorsements and support for LLA.
  • Beyond COP26, actions to grow the LLA movement include: WRI and partners leading a community of practice to bring together the diverse actors in this space; growing commitments and action to operationalize principles; and strengthening evidence and knowledge base by compiling more lessons learned from LLA action.

Carlos Sanchez, Executive Director, Coalition for Climate Resilient Investment (CCRI)

  • The Coalition for Climate Resilient Investment (CCRI) is a flagship COP26 initiative. CCRI has a membership of 100 private sector institutions representing $20 trillion committed to the development and testing of solutions for resilient investment decision-making.
  • The mispricing of physical climate risks in investment decision-making exposes social, economic, and financial value to these risks, and is a serious barrier to climate adaptation. This misunderstanding of climate risks results in inefficient regulatory incentive structures.
  • CCRI is addressing this problem by leading collaboration across industries in developing practical solutions to facilitate a better integration of physical climate risk and investment decision-making on a global scale.
  • CCRI works on understanding physical climate risk alone, and will integrate recommendations with greenhouse gas mitigation plans and climate transition risk once physical climate risk is better understood. CCRI advocates for solutions to be public and open source, regardless of how commercially interesting they may be for CCRI members.
  • The difference between mitigation and adaptation, or resilience, is that mitigation investments have well established metrics in risk-return profiles, which do not yet exist for resilience investments. With resilience investment there is also more difficulty in validating the quality of the capital invested, which is an important metric in terms of resilience delivery.
  • Developing countries pose a particular challenge called “the risk of price.” When showcasing the underlying risk in a certain jurisdiction, there is a risk that sovereign ratings will go down, and capital will be credited out, depriving developing countries of much-needed investment. This is why providing management solutions for national exposure to physical climate risk in these countries is crucial.
  • CCRI has convened the following three working groups to address the key challenges of pricing physical climate risks in investment.
  • The Systemic Resilience Forum, which aims to help governments at a national level understand how fiscal resources can be efficiently deployed to maximize the protection of economic and social well-being.
    • The forum brings together critical actors in Organization for Economic Co-operation and Development (OECD) countries and non-OECD governments, international organizations, financial actors that validate and guide the discussion, and technical experts in the different areas of expertise that are needed.
    • The group works on developing the systemic resilience metric, which will help guide the determination of the national value at risk in a given jurisdiction, and an investment practitioner tool that can show how every dollar will improve the result of the metric.
    • These two tools will bolster a “political return on resilience,” or an immediate reflection and recognition of the integration of physical climate risk, international planning, and national decision-making, to show how climate resilience investments can impact other national fiscal priorities.
    • The Systemic Resilience Forum additionally works on drawing connections between the systemic resilience metric and macroeconomic indicators such as gross domestic product (GDP), inflation, and interest rates. There is a dimension concerning the social exposure of the most vulnerable communities that is often missed in GDP calculations, and this needs to be embedded into climate risk calculations, along with ecosystem value at risk.
    • An example that will be presented at COP26 is a national investment prioritization tool in Jamaica, which assesses energy, water, and transportation infrastructure networks. The tool applies network modeling interdependency analysis to determine how an asset is connected to these networks and also exposed to climate risk. Researchers georeferenced assets and applied economic value to different sections of their networks to obtain a sense of prioritization in addressing risk.
  • The Asset Design & Structuring Working Group, which works at the asset level to advance a framework for the integration of physical climate risk analytics into cash flow modeling practices. Three solutions have already been put forward:
    • Physical Climate Risk Assessment Methodology (PCRAM): A bottom-up methodology for the interpretation of climate risk data in structural terms. The tool would be applied to an asset and would assess capital expenditures, operating expenses, and depreciation levels according to climate exposure over its lifetime, and issue recommendations for incremental investment.
    • S&P Credit Quality Drivers: These provide guidance towards a better recognition of resilience in credit quality terms, so more resilient assets have improved credit ratings.
    • Valuation Principles: These provide guidance for the interpretation of PCRAM and S&P Credit Quality Drivers in terms of cash flow projections and discount rates.
    • This working group has completed the analysis of four projects using these tools, which will be presented at COP26.
  • The Financing Level Working Group, which works on how capital is guided by the good pricing of physical climate risk. A capital instrument can improve and innovate the facilitation of raising capital, and drive recognition, reward, and integration of physical climate risks.
  • CCRI’s work has been endorsed by the G7 [an intergovernmental political forum made up of the world’s largest developed economies], and has been working closely with the state of California, having been cited in a recent report from the state’s Climate-related Risk Disclosure Advisory Group on developing climate risk disclosure practices.
  • The level of involvement that CCRI members have in contributing towards its mission indicates CCRI is developing a strategic tool for governments and investors and that there is a recognition that there is a systemic change happening in climate resilience in terms of understanding and investment.

Q&A

Q: Adaptation has scaled up in recent years, but there is also much work left to do. Could you share one or two key steps that you see as the most necessary big things we need to be thinking about to advance adaptation work?

  • Webster: It is important to have an equal balance between COP negotiation processes and real-world action. In terms of the issues set out today, we have to keep working on achieving the goal of providing $100 billion annually in international climate finance and on equalizing focus across mitigation and adaptation in commitments. What are the policies that need to be in place, what are the real-world actions, and what are the actual investment decisions that need to be taken to move us towards this more resilient future across the globe? From our perspective, we will keep working with our partners to work out what this looks like in each context and how we turn this into reality.
  • Coger: The Global Commission on Adaptation put out a report in 2019 called Adapt Now: A Global Call for Leadership on Climate Resilience calling for three ‘revolutions’ that are worth highlighting: A revolution in planning, in understanding, and in financing for adaptation. Understanding climate risk, planning ahead to address climate risk, and rethinking financing both in terms of the quantity of financing and the quality of finance. We have not talked so much about the quality of finance, and that is another piece I would recommend we focus on. In terms of locally led adaptation, it is not just about making sure that finance is reaching the right actors and local communities, but that it is structured in a way that local actors are able to access that finance, that it is flexible enough, that it is not so restrictive, that it is patient and long-term and predictable. All these elements of quality are also important to focus on.
  • Sanchez: The point about the quality of capital investment in finance is so crucial, and something that we in this space have historically struggled with so much, to prove that every dollar is maximizing that delivery, either of social, economic, or ecosystem value, or to enhance risk-adjusted returns to investor, which is also something that needs to be considered if we really want to generally integrate the private sector. There is so much need to bring this to practicality. There is so much value and efficiency in integrating solutions, in maximizing what we call capital expenditure investment.

I believe we are approaching a need for a proof of concept in the resilience space. We have the analytical, conceptual, and practical understanding of solutions, and now we have a unique opportunity to have an open discussion between private and public stakeholders about what each part can do to really bring us to that proof of concept phase.

We also need to better align upstream and downstream investment and planning decisions, so we understand that the projects that are advanced are the ones that really make sense in terms of long-term value for the country.

Q: What steps are being taken by your coalitions or partnerships to make sure that responses to climate impacts are equitable?

  • Coger: Locally led approaches address one level of inequity, between where finance and decision-making processes are allocated and where they are reaching, but it does not inherently address social inequities, and this is why principle number two is about addressing structural inequities. Sometimes, people conflate locally led adaptation with equitable approaches, so we really strive to make sure that equitable approaches are an intentional piece of locally led adaptation. We are thinking about what additional research we could be doing to make sure equity remains a deliberate focus of these conversations.
  • Sanchez: Within CCRI the equity consideration is crucial, particularly at the systemic level. Like with the Jamaica example mentioned in the presentation, we are taking a select group of infrastructure networks and understanding exposure within those networks, not as a measure of asset value, but in terms of social and economic continuity that relies on the asset that is exposed. In that project, we identified huge challenges in terms of integrating social and equity considerations, because we are naturally skewing against those most vulnerable communities that do not have access to infrastructure, so relying on existing infrastructure is the first issue there. We are working with the University of Oxford to expand our understanding of communities that are not properly served by infrastructure to identify investments that are necessary.
  • Webster: From my side, there are three ways to make sure that responses to climate impacts are equitable: one strategic, one in terms of governance, and one technical aspect. First, we are looking for people-centered approaches, so one of our partners, Resurgence, has created a project called DARAJA [an inclusive city-community forecasting and early warning service] making sure that the more formal, traditional early warning systems are also accessible to people living in informal settlements. Second, in governance, we have identified three drivers of change: global commitment on policy and practice; country-level ownership and leadership to make sure vulnerable countries are driving this agenda; and representation (i.e., we ensure our board has broad representation across all of our partners). Finally, the technical aspect: we have worked with specific partners on how to integrate gender considerations into early action approaches to make sure that we are embedding all those considerations into how this is operationalized.

Q: How can the United States learn or benefit from these initiatives? What are some key takeaways for Congressional staff on how international climate adaptation work relates to what is going on at home?

  • Webster: The agenda around early warning and early action is applicable domestically and internationally: all of us are impacted by changing climate and we need to adapt. We are seeing that much of the good practice is in the more disaster-affected countries, so Bangladesh is leading the way when it comes to integrating these approaches into their standing orders and their local-level disaster plans. We can absolutely learn from each other.

One of the main issues on the international side when supporting other countries bilaterally or multilaterally are silos between government departments with climate and environment and those with humanitarian focuses. But also domestically, between decision makers responsible for climate adaptation, disaster risk management, the economic side. Having a holistic plan and integrating these risks into everything we do is crucial, and that is as relevant for the United States as it is for the rest of the world.

  • Coger: This conversation is relevant to the United States in terms of the foreign assistance angle and how we can integrate locally led adaptation into our work with international partners. But this is also relevant in that small, local organizations and local governments in the United States face the same types of challenges in accessing funding. We have the same sort of systemic barriers to agency and inclusion and decision-making processes.

COP26 will feature stories from the frontlines of climate change and showcase and amplify these experiences. There has been a deliberate focus on bringing in stories from the United States to emphasize that this is truly a global issue. This also aligns really well with, for example, the Justice40 initiative of making sure that climate benefits are reaching disadvantaged communities here in the United States.

  • Sanchez: CCRI counts among its members a series of countries and jurisdictions that are Organization for Economic Co-operation and Development (OECD), and it is not just OECD countries supporting non-OECD countries in improving, rather they are all benefiting and have the same interest in adopting and piloting CCRI solutions. There are discussions with OECD jurisdictions about domestic-level applications of CCRI solutions to upstream and downstream infrastructure planning and about determining where the most value would be and where private and public capital can be brought together. In the United States, the municipal-bond space is a particularly important area where there is a lot of potential to mobilize investment for resilience, so there is a lot to learn and collaborate on.

Q: What specific messages could sub-national leaders, such as U.S. governors, amplify at COP26 that would support the call for equal attention to adaptation and mitigation?

  • Coger: Subnational actors are in a really good place to carry forward a lot of these messages. I would recommend reinforcing a lot of what we have talked about in terms of recognizing climate risks and providing some context. In the United States, there is a broad range of risks depending on where in the country you are, so using COP26 as an opportunity to provide that context would be valuable.
  • Webster: Risk and vulnerability exposure vary from state to state, city to city, and those decision makers have a crucial role to play to work out what adaptation looks like in their context. For cities to become more resilient, the states have to become more resilient.
  • Sanchez: We need to tailor that message to what the dimension of decision-making is that we are talking about. It is crucial to have messages of support and leadership to bring us to the next level.

Compiled by Amber Todoroff and edited for clarity and length. This is not a transcript.