Global Climate Change Investment Heavily Tilted Towards Mitigation and Low on Adaptation

A farmer tends to vegetables in a greenhouse in Antigua, where a
climate-smart agricultural initiative seeks to improve farm
productivity. Participants at the Green Climate Fund (GCF) Private
Investment for Climate (GPIC) Conference heard that will climate
change funding has increased, most of it is being spent on mutation
and not adaptation projects like this. Credit: Desmond

By Stella Paul
INCHEON, South Korea, Oct 8 2019 (IPS)

Good news: the graph depicting climate investments has been
steadily increasing. Climbing from the 2012 figure of $360 billion
in climate investments across the world to close to $600 billion

But despite the upward trend, its not even halfway to the
$3trillion needed each year till 2030 to meet the development goals
for capping global warming to 1.5 ° Celcius.

This was the broad picture that emerged on the first of the
three-day Green Climate Fund
(GCF) Private Investment for Climate (GPIC) Conference
, which
began on Monday, Oct. 8, in Incheon, South Korea. Attended by 600
people, including private investors, government officials and
international finance experts from a diverse sector, this is the
2nd edition of the conference.

Addressing the conference at the opening ceremony, executive
director of the GCF Yannick Glemarack said that the world needed to
dramatically scale up adaptation and mitigation efforts and both of
these had enormous investment opportunities. The conference, he
reminded the attendees, was designed to act as an ideas marketplace
to explore how to redirect the huge amount of funds held by large
banks and other institutional investors into driving climate action
in developing countries.

“Opportunities for private sector investment in energy in
developing countries alone are estimated  more than $23 trillion
from now to 2030. Today, the private sector manages more than $210
trillion in assets but invests only a very limited amount in
climate finance due to severe market barriers,” Glemarec

At the conference, he hoped, the participants would be able to
“reflect on these barriers and provide some actionable

Barbara Buchner, Executive Director of the widely
renowned Climate Finance programme at the Climate Policy
Initiative, says global investment is heavily tilted towards
mitigation and is low on adaptation. Credit: Stella Paul/IPS

Mitigation- Adaptation gap

Most of the current private investments are in climate
mitigation sectors, such as e-transport and renewable energy.
Adaptation projects around the world, including agriculture and
land, still fail to attract private investments, they noticed.

“Globally, private investment is heavily tilted towards
mitigation and is low on adaptation,” says Barbara Buchner,
Executive Director of the widely renowned Climate
Finance programme at the Climate Policy Initiative — a global
policy think tank that works to improve energy and land use
policies around the world.

  • According to Buchner, CPI has been tracking private investment
    in climate change since 2011 and right from the beginning, private
    investors have shown their preference for projects that cap carbon
    emissions such as renewable energy and transport projects, instead
    of forests or agriculture.
  • In 2016, the total climate finance in climate adaptation
    projects globally was $22 billion, while in mitigation projects it
    was $436 billion. Though investment has increased since then –the
    mitigation investments are now around $600 billion, Buchner

The reasons, she says, are many: lack of awareness and knowledge
of climate risks, domestic policy and regulations that hinder
mitigation, denied market access, social attitudes, multi-layer
complexities of investing in adaptation projects on agriculture,
water and land and a general lack of understanding in how such
projects can result in profits.

“Mitigation projects, on the other hand, are more investment
ready as the technology is already available and therefore one can
just go and invest. The impact of the investments also are more
direct and visible,” she said.

Yannick Glemarec (left), executive director of the Green Climate
Fund (GCF), and Andrew Holness (right), prime minister of Jamaica,
talk at the 2nd Private Investment for Climate Conference. Credit:
Stella Paul/IPS

Leadership matters

While risks and a lack of attraction and understanding were more
common barriers for private investment, a lot was also dependent on
political leadership, said some experts.

For example, Africa needs infrastructure funding worth $130-170
billion a year, but government and public funding will alone will
not be enough to meet this goal.

So, the region needs to attract private investment. However, at
present, there are few business opportunities for the private
investment, said Koffi Klaousse, project development director at
Africa 50 – an infrastructure fund.

“We have numerous projects, but very few of them offered an
actual investment and business opportunity for the private
sector,” Klausse said, before emphasising that political
leadership at the country level could change the scenario by making
it more possible for private investors to play a significant

Earlier on the day, an example of positive leadership was also
shared by Andrew Holness – prime minister of Jamaica – a
country that has attracted nearly $1 billion worth of private
investment. The only head of the state at the conference, Holness
described how his government has been trying to interpret the
climate threats as a great opportunity for private investment

“For us, climate change is a disaster. But if we embrace the
challenge, it could also mean an opportunity,” said Holness.

“If weather is going to be more severe, then we must build
more resilient and climate smart infrastructure and mobile more
public and private resources to support the effort,” he said
before asserting to attendees that Jamaica would continue to be
“fiscally responsible” and  continue to reduce its debt burden
to make itself more investment friendly.

In past decade alone, the country had been able to reduce its
debt burden to 60 percent from over a 100 percent. And it is on
track to meeting the goal of 50 percent of energy being produced by
renewable sources.

The conference, which ends on Oct. 9, will continue discussions
on a number of issues, including exploring how to shift the
trillions of dollars held by institutional investors, how to tap
climate bonds to fund climate-focused action, and expanding the
role of financial innovation to boost climate investments in
infrastructure, energy and land use.

The post
Global Climate Change Investment Heavily Tilted Towards Mitigation
and Low on Adaptation
appeared first on Inter Press Service.

Source: FS – All – Ecology – News
Global Climate Change Investment Heavily Tilted Towards Mitigation and Low on Adaptation