Roundup: More climate change financing urged for adaptation projects

Financial institutions and investors need to act more decisively on climate change adaptation, business executives and climate experts pointed out on Wednesday at a conference to follow up to the Paris climate agreement.

"The only way to respond adequately to climate change is by mobilizing the market. We have to make changes so quickly that unless they are driven by market forces they are not going to happen fast enough," Robert Glasser, Special Representative of the UN Secretary-General for Disaster Risk Reduction, told the three-day conference, which started on Tuesday.

"Not many companies are spending funds on research and development on climate change adaptation. We need to close the gap between businesses and action towards climate change adaptation," said David Walker, chief development officer of the DNV GL Group.

"Businesses and investors still hesitate to commit to projects on climate protection other than mitigation," said Frank Goossensen, water and client development director of Arcadis Europe, an Amsterdam-based global design, engineering and management consulting company.

"It is easier to mobilize business in reducing gas emissions rather than investing in adaptation measures. Businesses ask what growth opportunities lay in climate change adaptation," he explained. "There are more signals coming from investors yet it takes time."

Adaptation projects range from building higher sea walls and better roads, to developing resilient crop varieties and early warning systems.

But these climate change adaptation measures that protect people and assets in relatively longer term have gained far less funding and attention than mitigation efforts which aim at reducing planet-warming greenhouse gas emissions.

Awareness on mitigation is larger as highlighted by the use of "carbon pricing," a mechanism allowing companies to measure and disclose their emissions. "Business cases in adaptation are more difficult. Adaptation is a long-term issue," said Roger Steens, sustainability director of Tata Steel Europe.

Companies focus more on the short term and are unclear about the costs of long term investments on climate resilience, while many investors dismiss global warming as too complex, he said.

At the end of last year, nations agreed a landmark deal in Paris to cut rising greenhouse gas emissions blamed for global warming. The Paris agreement was expected to make the issue more of a priority in the business and financial world.

The Rotterdam conference co-organized by the European Commission and the Dutch government, which holds the EU presidency, is viewed as a follow-up to the Paris climate agreement. It has brought together some 1,700 researchers, scholars, policymakers, high ranking government officials and business people.

Deputy Director of International Cooperation and Development at the European Commission Marjeta Jager stressed that financial institutions should engage more in investment directed towards climate change adaptation measures.

According to the development expert, the European Union (EU) is the biggest provider of climate funding, amounting to 68 billion euros (77.69 billion U.S. dollars) in 2015. And 20 percent of the 2014-2020 budget is directed towards climate related issues.

"But our resources are not enough. We are counting on the private sector. We need the financial institutions to share the burden," Jager said.

Earlier Queen Maxima of the Netherlands, UN Special Advocate for inclusive Finance for Development, called on the financial and private sectors to "break down the barriers for those who are outside the financial system" and stressed the importance of financial inclusion as a tool to enhance climate change adaptation.

"Financial inclusion is vital in improving resilience for individuals, households, communities, small holder farmers and SMEs," Maxima said. "We do need more private investment commitment. The financial sector will have to play a much more important role in contributing to climate change adaptation." Enditem