We are currently in the implementation phase of the Paris Agreement, which is a major focus on the 2022 UN climate negotiations in Sharm El Sheikh, Egypt. Mobilizing climate finance is key to any implementation of solutions.
Yet it is well-documented that current levels of public and private financing have fallen short of global targets relative to mitigation, adaptation, resilience-building, and even loss and damage. While government leaders debate on the language being placed in decision texts, the costs and burden imposed by the climate crisis on the most vulnerable communities, including those in the Asia-Pacific, continue to increase with every second of inadequate action.
Balancing the urgency of implementing climate solutions and enacting a just transition that would take years to fully realize is a difficult task awaiting decision-makers, financing institutions, and other stakeholders. Yet this question must be answered if the world is truly committed to achieving a net-zero, climate-resilient world by 2050.
Scaling up investments
A key recommendation for scaling up investments in adaptation and resilience in the Asia-Pacific is for proponents to emphasize the co-benefits that their projects can provide in terms of climate change mitigation, achieving the Sustainable Development Goals, or recovering from the COVID-19 pandemic. This would allow for a wider range of investors and funders that could potentially support such endeavors, and maximize the readily accessible finance and technologies to simultaneously address economic, social, and environmental issues affecting areas of concern.
Understanding the interlinkages between adaptation, resilience, and other facets of development remains a challenge for different stakeholders in the Asia-Pacific. This also applies to investors, banks, and other funding entities at the national level across the region, which may lack the necessary institutional capacity to incorporate these interlinkages into investment planning. The long-term nature of adaptation-related investments contrasts with the short maturities of available financing also restricts opportunities to support such projects.
This highlights the value of capacity-building across all sectors, from the planning to the monitoring phase, to ensure that not only the adaptive capacities of targeted stakeholders increase enough to deal with local climate change impacts, but also for project financers to get their expected returns of investment.
Another key recommendation is for governments and businesses to make localized climate risk data and information available to enable more holistic planning that is needed for scaling up investments. Decision-makers need to conduct more inclusive consultations with stakeholders of adaptation projects, partner with civil society organizations and academic institutions for additional support in data generation, and embedding climate risks in investment planning conducted by national and/or local governments and development partners.
Governments in the Asia-Pacific must also finalize their National Adaptation Plans and relevant investment plans, containing clear, well-defined statements of adaptation and resilience goals at the national level. Setting the policies and standards, key actors and functions, and timelines would enable more private sector participation through improving the screening process for projects they deem profitable and avoiding mismatches that have hindered adaptation and resilience-related financing within the region.
Inclusive just transition
Scaling up investments for adaptation and resilience is one integral component in the just transition necessary for the Asia-Pacific region to thrive in the era of the climate emergency. At COP27, Parties must not forget to build up on the clean energy transition that is essential to addressing the climate crisis.
Studies have already shown a clear image of what awaits a world still dependent on fossil fuels. In its recent series of reports, the IPCC states that USD4 trillion of assets of fossil fuel infrastructures would become stranded, which makes them economically undesirable. The IEEFA also reports that investors risk being exposed to USD14 billion of stranded assets on liquefied natural gas.
While dialogues on transition have mostly focused on decarbonization of economic sectors including on energy, transport, and agriculture, adaptation and resilience-building must also be integrated into programs and projects to be undertaken across all levels.
To ensure that no one will be left behind, it is imperative for decision-makers to implement comprehensive data management systems on climate risks and solutions, which is a problem found across the Asia-Pacific. Capacity-building schemes should complement data collection, modeling through Shared Socioeconomic Pathways, sectoral and multisectoral analysis, and other activities, accompanied by mobilized finance from public and private sectors.
Proponents of just transition-related projects must also establish spaces and mechanisms to enhance inclusivity. Consultations need to be conducted in a facilitative manner, accounting for the needs and priorities of local stakeholders, especially highly-vulnerable groups such as women, youth, indigenous peoples, and the urban poor. This would aid in creating a network for different types of partnerships would help ensure project sustainability across all stages of its life cycle.
What should never be lost in the process of just transition or any aspect of climate action is the aspect of social and intergenerational justice. All financial flows must be designed such that they can be readily accessed, especially by those who need them the most. The accessibility issues experienced by developing countries with existing public and private finance sources across all levels should serve as lessons to avoid further worsening climate change impacts.
Developing nations, especially those most vulnerable to the climate crisis, must not be further burdened by terms of financing agreements that hinder their pursuit of sustainable development. A transition to a climate-resilient economy and society should not primarily be about ensuring that financers do not lose their profits or their shareholders.
This is not just a transition. This is a just transition. The time has come to invest in our future, and not just in a monetary sense.
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