Three examples illustrate a need to inspire an adaptation marketplace. 1. the 2015 Paris Climate Agreement, unlike its 20 predecessors, prioritized adaptation & finance. 2. the 2016 Global Risk Perceptions Survey (WEF 2016) ranks failure to adapt to climate change 1st of 28 risks in terms of potential negative impact. 3. UNEP (2015) calculates the adaptation finance gap will be US$140-300B/year by 2030. There is a need for increased funding for adaptation projects, many of which create jobs & stimulate economies as a co-benefit of protecting human & natural communities from the effects of climate change. One barrier is the absence of an adaptation market, a mechanism by which adaptation projects can be traded as commodities, financed by private, government and development investors.
This absence is partly due to a lack of a standard measure for adaptation success that would e.g. create tradable adaptation credit, increase adaptation project bankability, and direct finance to short- and long-term adaptation projects.
What type of measure is needed to evaluate the potential success of adaptation projects? What types of investment decisions will it influence? Is it the same need for development and private sector investors? Addressing these questions will help to benchmark and establish a draft adaptation Standard in collaboration with the private and development sectors.
A nascent investor-lead Global Adaptation & Resilient Investment (GARI) group is attempting to address this need. ND-GAIN & GARI have identified missing knowledge that will spur the adaptation market: a globally accepted project-level measure of adaptation success that assesses progress thereby quantifying opportunity for investors & inspiring a new marketplace that will improve both lives & economies in the face of climate change. The standard will direct investment flows into projects that have climate adaptation & market benefits, inspire investment for adaptation projects not previously considered, credit existing projects, & shape growth of investor tools, such as debt instruments.
This standard will be comprised of a unique & efficient set of indicators that measure the success of adaptation investments. Potential indicators will be evaluated against outcomes including avoided death & damage, avoided cost & collateral job, ecosystem & greenhouse gas mitigation benefits.
The creation of an international standard to measure climate risk & opportunity entails:
- Establish theoretical baseline standard of adaptation measurement
- Improve Standard concept through feedback from users
- Support investor community to pilot the Standard on existing & proposed adaptation investments
- Draft paper proposing a standards for adaptation project measurement
- Share knowledge with marketplace
The goal is to reduce barriers and foster growth in a global market for adaptation projects by expanding the number of projects, investors and improved human lives.
The ultimate outcome of this Standard will be to inspire a global market for adaptation projects that save lives & improve livelihoods through private sector & development agency investments that help prevent the avoidable & manage the unpreventable in the new era of droughts, super-storms, flooding, fires & other climate stresses & shocks.
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