We face a crisis – Climate change is upon us, and its impacts are getting more severe with each passing year.
Adaptation can deliver high rates of return, bringing multiple benefits to people and the economy
Global center for adaptions research finds that investing $1.8 trillion globally in five areas from 2020 to 2030 could generate $7.1 trillion in total net benefits. The five areas they consider are early warning systems, climate-resilient infrastructure, improved dry land agriculture, mangrove protection, and investments in making water resources more resilient. This represents only a small portion of the total investments needed and total benefits available.
Executive Summary of the report –
ADAPT NOW: THE URGENCY OF ACTION
Climate change is one of the greatest threats facing humanity, with far-reaching and devastating impacts on people, the environment, and the economy. Climate impacts affect all regions of the world and cut across all sectors of society. People who did the least to cause the problem—especially those living in poverty and fragile areas—are most at risk.
- Without adaptation, climate change may depress growth in global agriculture yields up to 30 percent by 2050. The 500 million small farms around the world will be most affected.
- The number of people who may lack sufficient water, at least one month per year, will soar from 3.6 billion today to more than 5 billion by 2050.
- Rising seas and greater storm surges could force hundreds of millions of people in coastal cities from their homes, with a total cost to coastal urban areas of more than $1 trillion each year by 2050.
- Climate change could push more than 100 million people within developing countries below the poverty line by 2030. The costs of climate change on people and the economy are clear. The toll on human life is irrefutable. The question is how will the world respond: Will we delay and pay more or plan ahead and prosper?
The Imperatives for Accelerating Adaptation
Accelerating climate change adaptation is a human, environmental, and economic imperative:
THE HUMAN IMPERATIVE
Climate change exacerbates existing inequities by widening the gap between people with wealth and people living in poverty. It has a disproportionate impact on women and girls, who, in most of the world, have little voice in decisions that affect their lives. It also puts an unfair burden on future generations. Solutions to these climate-related inequities must address underlying power structures and dynamics. We will not accept a world where only some can adapt, and others cannot.
THE ENVIRONMENTAL IMPERATIVE
The natural environment is humanity’s first line of defense against floods, droughts, heat waves, and hurricanes. A thriving natural environment is fundamental to adaptation in every human enterprise. Yet, one in four species is facing extinction, about a quarter of all ice-free land is now subject to degradation, ocean temperatures and acidity are rising, and climate change is accelerating the loss of natural assets everywhere. There is still time to protect and work with nature to build resilience and reduce climate risks at all scales, but the window is closing.
THE ECONOMIC IMPERATIVE
Adapting now is in our strong economic self-interest. The Commission found that the overall rate of return on investments in improved resilience is very high, with benefit-cost ratios ranging from 2:1 to 10:1, and in some cases even higher.
Specifically, our research finds that investing $1.8 trillion globally in five areas from 2020 to 2030 could generate $7.1 trillion in total net benefits. In other words, failing to seize the economic benefits of climate adaptation with high-return investments would undermine trillions of dollars in potential growth and prosperity.
Three Revolutions for a Better Future
The case for ambitious adaptation is clear, but it’s not happening at nearly the pace and scale required. This is because climate impacts and risks are not yet adequately factored into decisions by those who make choices about the future. Achieving the change needed requires revolutions in three areas:
A Revolution in Understanding to ensure that the risks societies and economies face are fully understood—and reflected in the decisions that public and private actors make. A key element is the need to make risk visible, requiring more precise characterization of who and what is at risk—and why. As part of making risk visible, the public and private sectors can work together to more explicitly price risk in both economic and financial decision-making. Equally important is to understand what works and what options to prioritize by supporting experiential learning, stimulating innovations in science and technology, sharing solutions, and piloting new business models and financial services. It is important to consider all forms of knowledge, recognizing that valuable local knowledge rests with communities and indigenous populations.
A Revolution in Planning to improve how we make policy and investment decisions and how we implement solutions. The climate challenge is both urgent and pervasive across virtually all economic sectors. Mainstreaming in the public sector begins with upstream macroeconomic analysis and extends through risk screening, environmental and social impact assessments, budgeting, permitting, and project design. Since many climate impacts are local, devolving planning and even financial responsibility to those most affected is critical. In the private sector, companies worldwide are starting to improve planning to protect their operations and assets from climate risks, but current levels of physical risk disclosure remain low. Both the public and private sectors need to learn to better incorporate high levels of uncertainty in their decision-making, as choices will need to be made soon between radically different options—long before we know if the world will actually be on a 1.5°C or a 4°C pathway.
A Revolution in Finance to mobilize the funds and resources necessary to accelerate adaptation. Even though the imperative for action is clear, money is not flowing at the pace or scale needed. The public sector, first, is an essential provider of finance to protect people and livelihoods across communities and sectors; and second, is an enabler of increased private sector finance through disclosure requirements, metrics, and incentives, like buying down the risk of providing financial services to small-holder producers. The private sector will increase investments on its own account, but it should also increasingly complement the public sector in sharing the costs and benefits of adaptation investments, such as for infrastructure, contingency finance, and insurance. Finally, there is a critical need for higher levels of international financial support for adaptation in developing countries. Fully implemented, these three revolutions will protect lives, livelihoods, homes, and jobs in the face of climate change.
Accelerating Adaptation in Key Economic Systems
We must apply these revolutions to the key economic systems affected by climate change: systems that produce food, protect and manage water and the natural environment, plan and build our cities and infrastructure, protect people from disasters, and provide financing for a more resilient future. The report shows how the climate crisis is disrupting these systems and offers specific, actionable recommendations for how to respond.
Food: Global demand for food will increase by 50 percent and yields may decline by up to 30 percent by 2050 in the absence of ambitious climate action. A more resilient food future will rely on sharp increases in agricultural R&D, which has demonstrated benefit-cost ratios between 2:1 and 17:1; better alignment of government finance and incentives for farmers with long-term, sustainable, climate-smart production; and a step change in access to information, innovative technologies, and finance to enhance the resilience of 500 million small-scale farming households whose livelihoods are most critically impacted by climate change.
Natural Environment: Nature-based solutions regulate water flows, protect shorelines, cool cities, and complement built infrastructure. Despite underpinning the resilience of communities and economies, nature is rapidly being degraded. Large-scale protection and restoration of nature will require accelerating progress to meet existing political commitments, such as through the Convention on Biological Diversity; appropriately valuing natural assets in land use and investment decisions; and increasing the scale of public and private resources to safeguard nature. Many nature-based adaptation solutions are also beneficial for mitigation and can provide one-third of the climate mitigation needed between now and 2030 to keep global warming below 2°C.
Water: Climate change is integrally connected to water systems and resources. Successful adaptation will require scaled-up investments in healthy watersheds and water infrastructure, dramatic improvements in efficiency of water use, and the integration of new climate risks, such as floods and droughts, at every level of planning and operation. More efficient water allocation and use will be vital to economic growth in the face of climate change: without such approaches, the GDPs of India, China and Central Asia would be from 7 to 12 percent lower, and much of Africa would be about 6 percent lower by 2050. Countries that make water management a top national priority, backed up by major governance changes and investments, are more likely to adapt and prosper; those that do not will experience serious challenges.
Cities: Urban areas are home to more than half the global population and are centers of opportunity and innovation. Adaptation efforts, if designed well, can take advantage of this transformative energy and generate high economic returns. In coastal cities, for instance, the cost of good adaptation is one-tenth the cost of no action. To plan and deliver more resilient urban services, cities everywhere need to invest in better climate risk information and technical capacity, drawing on credible topographic and community-level data. They should also invest in nature-based solutions to tackle water and heat risks, and in upgrading the living conditions of the 880 million people living in informal settlements that are highly vulnerable to climate change.
Infrastructure: Ports, roads, power, sanitation, sewer, and communications systems are all examples of infrastructure assets at risk from climate change. Climate-proofing existing infrastructure and building new infrastructure that is more climate resilient makes sound economic sense—on average, the benefits outweigh costs by 4:1. Investments in infrastructure need to directly build resilience, whether for storm-water drainage in cities or protecting coastal communities against sea-level rise. This will require developing blended public-private approaches that share the costs and benefits of investing in resilient infrastructure. Finally, we need to go beyond protecting individual assets to ensuring that whole systems are more resilient by making the right choices about where and what to build, which existing assets to upgrade, prioritizing green infrastructure wherever possible, and ensuring infrastructure continues to function even as damages occur.
Disaster Risk Management: Climate change is often most visible when seen through changes in the intensity and frequency of disasters: hurricanes, floods, heat waves, and wildfires. In the face of more common extreme weather events and climate-related disasters, we need to prevent, protect and recover. We need to proactively yet voluntarily move people and assets out of harm’s way through better planning and investment decisions. At the same time, we need to scale up efforts to warn and prepare people ahead of disasters, actions that can dramatically reduce the loss of life, and exhibit very high returns on investment. Finally, social safety nets and improvements in forecast-based planning can help hasten recovery from disasters when they do strike.