Tuesday
November 1
2022

Climate Adaptation: The $2 Trillion Market the Private Sector Cannot Ignore

By Wonsik Jeong, Kimberly Chen, Lauren Shum

Climate change is impacting virtually every industry and region of the world, but most of our climate funding has been for mitigation, not adaptation. This is a problem.

Even if mitigation stabilises the climate, we must still live with the effects of climate change. Many are already here: increased prevalence of wildfires and more destructive storms, for example.

Climate adaptation, therefore, is essential.

The cost of adaptation in developing countries is expected to reach $300 billion per year by 2030. By contrast, global adaptation finance flows were only $46 billion in 2020, of which only $28.6 billion went to developing countries. This is insufficient.

Developing countries are more seriously impacted by climate change. The world’s 55 most climate-vulnerable economies have already lost 20% of their GDP. There is a clear need for increased climate adaptation finance, especially in developing countries.

The private sector can help meet this investment gap. Currently, only 1.6% of all adaptation funding comes from private investment — making climate adaptation an untapped opportunity.

Photo courtesy of Ryk Porras.

 

Source: World Economic Forum (link opens in a new window)

Categories
Energy
Tags
climate change, environment, finance, sustainability