Report summary: Finance sector opportunities in emerging adaptation and resilience markets
This paper examines the private financial sector’s progress on climate adaptation and resilience. It assesses how the private sector can scale existing solutions within the public sector and within the ongoing evolution of international financial architecture reform.
The analysis highlights the key barriers to private sector mobilization, the tools and policies that could create a thriving adaptation and resilience market, the critical role private finance can play, and a proposed way forward.
The importance of private finance action for climate adaptation
If the world continues on the same climate trajectory, the global economy is expected to lose 10 percent of its value due to extreme weather events by 2050.
Mitigation alone will not be able to offset these loses. Alongside work to reduce global emissions, it is incumbent on stakeholders around the world to prioritize climate adaptation and the resilience of our societies and economies. However, the projected expenses for adaptation in developing nations during this decade are anticipated to reach up to $387 billion each year.
There is an opportunity for private finance stakeholders to mobilize action to help close the gap. Private financial institutions are already creating products and taxonomies, risk sharing mechanisms, risk analytics, and investing in adaptation and resilience. However, to meet the urgency of the climate crisis, a coordinated effort and the creation of enabling policies are necessary to create a functioning market for adaptation and resilience.
Arsht-Rock’s paper explains how to harness the potential of the private sector to better collaborate with the public sector and existing solutions to advance climate resilience around the world.
