Resilience to severe climate impacts will only be possible when existing systemic market failures are addressed according to a new report Risk & Resilience by Coalition for Climate Resilient Investment (CCRI).
The first report by CCRI since its launch in 2019 cautions that as climate disasters intensify and prospects for avoiding even more catastrophic warming diminish, systemic market failures must be addressed before it will be possible to unlock the scale of private finance needed to support climate adaptation and resilience in both vulnerable and developed countries.
CCRI is a UN Climate Action Summit and COP26 flagship initiative and represents the global private financial industry, in partnership with major private and public institutions, to foster more efficient integration of physical climate risks in investment decision-making.
According to the report three main factors are responsible for the chronic underinvestment in climate resilience by the private sector.
The report details progress made by CCRI to support and accelerate the shift towards greater investment in resilience, including development of a framework for approaching different levels of physical climate risk within the global economy.
Latest assessments revealed that adaptation in developing countries is estimated to require as much as $300bn investment per year by 2030, overshadowing the $79.6bn spent in 2019 on both mitigation and adaptation in these countries.
In fact, the same analysis showed that investment in resilience for small island developing states has actually declined, revealing a global ‘adaptation gap’ that is widening.
CCRI executive director Carlos Sanchez said, “The warming we have experienced to date has caused irreversible changes to many of our planetary support systems on timescales of centuries to millennia. There is increasing demand for practical approaches to deal with the challenge of scaling up adaptation.” M