Finance strategies for adaptation. Presentation for CANCC

Presentation by Alessio Giardino Senior Climate and Coastal Adaptation Specialist, ADB, at the Coalition Of Low-Lying Atoll Nations on Climate Change (CANCC) peer learning cohort workshop on “National Adaptation Planning With a Focus on Coastal Adaptation” in North Malé Atoll, Maldives, between May 1 - May 3, 2024.

1. Finance strategies
for adaptation
3 May 2024
Alessio Giardino
Senior Climate and Coastal Adaptation Specialist
Peer Learning Cohort CANCC Maldives May 1 – May 3, 2024

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This diagram provides a
snapshot of climate finance
flows through the lifecycle.
Starting from the left, it
highlights the original source
of financing through to how
that finance is used on the
right.
Global Climate Finance Landscape
Source: Climate Policy Initiative, 2023

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Global Climate Finance Landscape
Source: Climate Policy Initiative, 2023
•Average annual climate
finance flows reached almost
USD 1.3 trillion in 2021/2022,
nearly doubling compared to
2019/2020 levels.
•Increase was primarily driven
by a significant acceleration in
mitigation finance (up by USD
439 billion from 2019/2020).
•The remainder of the growth
observed in 2021/2022 (USD
173 billion each year) stems
from methodological
improvements and new data
sources, which augment the
flows tracked in 2019/2020.

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Global tracked climate finance and average estimated needs

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•The adaptation finance gap is likely 10–18 times as great
as current international adaptation finance flows – at
least 50 per cent higher than previous range estimates.
•The adaptation finance gap – that is the difference
between estimated adaptation financing needs and
costs (US$215 billion to US$387 billion) and finance
flows (US$21.3 billion) – has grown.
•The AGR 2023 estimates that the plausible central
adaptation finance gap for developing countries is
currently in the range of US$194 billion to US$366
billion per year
Global Climate Finance Landscape

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ADB Approach for Scaling up Climate Adaptation and Resilience
Engage
upstream
engagement
with countries
and private
sector on
adaptation.
1
Scale-up financing
for investments
that enable
adaptation
(sovereign and
non-sovereign).
2
Enhance
capacity,
knowledge and
partnerships on
adaptation.
3

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The Challenges
Many countries have produced NDCs and NAPs and many include costed adaptation actions
But
•Actions are usually wish lists of of projects
or technical options, not prioritized
•Costings are usually high level (generic),
no analysis of the economic benefits
•Little consideration of potential for
funding and large adaptation finance
gap (needs>>flows)
•
NDCs and NAPs are not investment
ready – no ‘bankable’ projects
And
•NDCs and NAPs typically led by Ministries of Environment
•Often low buy- in from Finance and
Line Ministries
•NDC and NAPs often disconnected from development
plans, sector
investment plans, MTEF, budget

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Climate Adaptation Investment Planning (CAIP)
A Program to Bridge the Gap between Climate Adaptation Planning and
Financing
•A regional program supporting
developing member countries
(DMCs) of ADB in translating
their national adaptation
priorities for key sectors, as
outlines in their NAPs and
NDCs, into adaptation
investment plans
•Country led
•Reflect medium and long- term
priorities
•Focusing on adaptation benefits and
co-benefits to identify investment
cases for adaptation
•Enable exploration of financing
options beyond grants, e.g. blended
finance, private sector

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National
Adaptation
Plan
Adaptation Investment Planning
Country and sector context
Climate diagnostic
Adaptation prioritization
Public financial management
Finance matchmaking
Strategic
pipeline of
adaptation
investments
Inform:
•Annual
Development Plan
•Country
Programming of
Development
Partners and Global
Climate Funds
•Private Sector
Projects
Climate Adaptation Investment Planning Program

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Initial support to 12 Countries
Focus countries: Armenia, Bangladesh, Bhutan, Cambodia, Indonesia, the Kyrgyz Republic,
the Lao People’s Democratic Republic, Mongolia, Nepal, Palau, the Philippines, and Timor-
Leste.
Support will be provided for key priority sector(s) identified in the NAP or equivalent plans.
Examples include support for the transport sector in Armenia, the urban sector in the
Kyrgyz Republic, and the agriculture sector in Indonesia.

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Example: CAIP Palau (on-going)
1. Framework for State prioritization
Climate Exposure Context
•Multi-hazard Exposure
•% Critical infrastructure Exposure (Tropical Storm
Wind, SLR + Storm Surge, Landslide)
Socio-economic Context
•Population
•Poverty (%)
•Temporary Structures as Housing (%)
•Households without Access to Public Water (%)
Institutional readiness
•Land use planning and readiness to implement plans
Ownership and political commitment
•Expressed interest in adaptation:
»E.g. Budget allocations for adaptation
»Prioritised in National Climate
Change Policy
•Importance for supply of key services
(e.g. water supply) to neighbouring
states
•Opportunities for mobilising private
sector investment
•National government (co-)financing
commitments

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Example: CAIP Palau (on- going)
2. Climate diagnostic (housing sector)
Climate Risk and Vulnerability Assessment
for Housing Sector
•Inundation maps including SLR
•Tropical storm hazard maps
•Identifying risk hotspots for housing
•Informing priorities for sustainable
climate resilient housing
»Projects
»Planning and policy environment

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Example: CAIP Palau (on- going)
2. Climate diagnostic (water
sector)
Climate Risk and Vulnerability
Assessment for Water Sector
•Inundation maps including SLR
•Drought mapping based on
existing information
•Identifying risk hotspots for water

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Shukuriyaa!
(Thank you)
Alessio Giardino
Senior Climate and Coastal Adaptation Specialist
[email protected]