The Landmark COP26 Calls for Increased Climate Finance for Adaptation

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The Landmark COP26 Calls for Increased Climate Finance for Adaptation

Under a scenario with 1.5°C of warming above preindustrial levels by 2030, almost half of the world’s population—approximately 5.0 billion people—could be exposed to a climate hazard related to heat stress, drought, flood, or water stress in the next decade. Today, this figure is 3.3 billion people. There is thus an urgent need to focus on boosting resilience in both cities and rural areas. During the just-ended COP26, the World bank Group turned the spotlight on its Climate Change Action Plan 2021-25 which prioritizes a green, resilient and inclusive development (GRID) approach for maximizing the impact of climate finance. The new Action Plan focuses on (i) integrating climate and development; (ii) identifying and prioritizing action on the largest mitigation and adaptation opportunities; and (iii) using those to drive the World Bank Group’s climate finance and leverage private capital in ways that deliver the most results. The World Bank Group together with eight other multi-lateral development banks signed a joint statement to increase ‘nature-positive’ investments.

On the back of COP26, IFC received €10 million from BMZ for a proposed new initiative – the “Africa Inclusive Climate Risk Insurance Program” – aimed at protecting farmers and MSMEs against risks that could lead to business interruption, poor health outcomes or losses in crop or livestock production. Through developing, testing and distributing inclusive insurance products, the new initiative will increase last-mile access and affordability for the most vulnerable including women . 

Noteworthy outcomes from COP26 include calls for increased private capital mobilization for climate adaptation since only 2% of tracked climate adaptation finance currently comes from the private sector. Other actions include doubling of financing for vulnerable nations’ efforts for resilience and transition together with making ‘nature-positive’ investment decisions across portfolios.

For the duration of the COP26 deliberations, actors were urged to foster cross-industry coordination, commitments and collaboration in addressing the effects of climate change especially on health, urbanization and resilience. Innovative partnerships, investments and technologies will be vital in the race to reducing global warming levels to 1.5°C of warming above preindustrial levels by 2030 as well as reducing greenhouse gas emissions to zero by 2050.

Despite the challenges, emerging opportunities exist for creating new jobs, building resilient cities and strengthening core sectors including agriculture, health and infrastructure to make them more ‘disaster-proof’.  Science, through early warning systems for instance, will play a critical role in guiding interventions and investments across interconnected sectors. The Glasgow Climate Pact signed on the final day of COP26 seeks to bring all these ideals and visions to fruition in the coming years.