Climate Action Beyond Net Zero Emissions: the Challenge of Adaptation
Adaptation to climate change has become a must.
With 2021 looking to be yet another record year in terms of extreme weather events and surface temperature, news of devastating floods and wildfires have become commonplace. The trend at large is clear: climate change is not something for the 2050s or 2100s. It is happening now and it is accelerating at an alarming pace.
Adaptation and resilience are critical to confront climate change and align with the pledges of the Paris Agreement. Even if mitigation measures were implemented as planned in the nationally determined contributions (NDCs), future heating would still be at least 3°C above pre-industrial levels, emphasizing the need for adaptation. In this context, the upcoming climate conference in Glasgow, COP 26, will focus on adaptation amid global demand for more adaptation financing. Increasingly, resources become available to finance adaptation and resilience in the private sector.
The private sector is showing significant progress in mitigation action. Net zero commitments in alignment with the Paris Agreement have increased as momentum grows to tackle a climate crisis underlined by the Intergovernmental Panel on Climate Change. Adaptation and resilience must become part of the equation for the private sector. Companies can benefit from establishing a robust and resilient climate strategy that covers both adaptation and mitigation actions in tandem.
The business case for adaptation is strong
Adaptation and resilience have direct benefits for companies, projects and communities. As the Global Center on Adaptation points out, they provide a triple dividend by avoiding future losses, generating economic gains and creating other social and environmental co-benefits.
Just like every sector is and will be affected by climate change, every sector can adapt. Adaptation and resilience can take the form of early warning systems, building stronger infrastructure and investing in nature-based solutions. It can also mean climate-smart agriculture or supplier diversification to deal with disruptions from extreme events. Understanding context-specific vulnerabilities through a climate risk assessment and addressing them strategically is key to maximize the cost-benefit proposition.
With a target of at least 30% climate finance, IDB Invest strategically supports the private sector in Latin America and the Caribbean. Given the private sector currently is focusing mainly on mitigation, there is still a low supply of adaptation projects to finance. IDB Invest looks forward to supporting clients in developing and financing adaptation projects.
IDB Invest is committed to supporting clients in building resilience to climate change along their supply chains. For instance, IDB Invest is providing finance and advisory services to foster the sustainability of Naturasol’s vulnerable honey suppliers, who have been impacted by increasingly frequent floods and droughts in Yucatán, Mexico. The technical assistance and supplies will allow 400 beekeepers of Mayan descent to adopt sustainable and biodiversity-friendly practices that are expected to increase their productivity and climate resilience.
The climate vulnerability assessment of Naturasol’s honey suppliers analysed climate change projections, flood risk, sensitivity to climate variables and adaptive capacity and was the foundation for the development of a capacity building program and investment plan. This program aims to provide technical assistance on best practices for production and feeding, pest management, rearing of queen bees, apiary management, reforestation with native species as well as prevention measures based on weather forecasts.
Technical assistance is complemented by the provision of inputs to feed the hive in critical times, supplies for dividing colonies and recovering from the losses, investments in genetic improvement, reforestation to preserve the native flora as well as supplies to relocate the beehives in low-risk areas.
The Paris Agreement has been a watershed moment for limiting global warming well below 2°C. It likewise acknowledges the pertinent role of adaptation and resilience. For the private sector to be “Paris-aligned” incorporating adaptation in addition to mitigation objectives is pivotal.
Through finance and advisory services, IDB Invest can help clients assess their climate vulnerability and adopt business models that are resilient and productive in the face of climate variability and more frequent extreme weather events as well as growing sustainability demands in markets at large.
By elevating adaptation and resilience as essential elements in the climate action agenda of the private sector and encouraging clients to incorporate targets on adaptation and resilience, IDB Invest is looking to help partners join this important global cause.
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