Finance

Your Excellencies, Ladies and Gentlemen,

The United Nations Environment Programme estimates that adapting to the devastating impacts of climate change will require between USD140 to USD300 billion annually by 2030. As they grapple with the Covid-19 crisis, developing countries do not have the resources to finance urgent adaptation needs.

The Green Climate Fund is the world’s largest climate fund and allocates half of its resources to finance transformative climate adaptation initiatives. With our partners, we have identified four key avenues to scale up adaptation finance.

First, we need to leverage the new generation of NDCs to foster synergies between adaptation, mitigation, development finance, as well as Covid-19 economic stimulus measures. Integrated policies that capture triple wins for health, growth and climate could reduce by 40% the required total investment to achieve the SDGs and the Paris Agreement.

Second, we need to develop new valuation methodologies that balance off the higher upfront costs of climate resilient infrastructure with their lower operating costs and lower climate physical and transition risks. Such methodologies will enable financiers to better assess the rates of return of climate resilient investment in a changing climate.

Third, we need to create new climate-resilent financial products to match the risk profile of products familiar to institutional investors. Those could include resilience bonds or green ABS for example.

Fourth, the international community needs to deliver on the US$100 billion goal in climate finance. This is a precondition to develop the capacity and transform the markets needed to align financial flows to reduce emissions and adapt to climate change.