Investment in Climate Adaptation Could Yield Trillions in Benefits

    Stockholm (NordSIP) – The Global Commission on Adaptation published a report putting forward a bold vision for the transformation of key systems to improve resilience and productivity in the face of climate change. The report finds that US$1.8 trillion worth of global investments in five specific areas from 2020 to 2030 could generate US$7.1 trillion in total net benefits. “In other words, failing to seize the economic benefits of climate adaptation with high-return investments would undermine trillions of dollars in potential growth and prosperity,” the report warns.

    It’s leaders – retired UN Secretary-General Ban Ki-moon, Bill Gates and Kristalina Georgieva, CEO of the World Bank – called on governments and businesses to take urgent action to innovate and advance climate adaptation solutions in light of new research findings. The Global Commission on Adaptation was created on 16th October 2018 with the mandate to encourage the development of measures to manage the effects of climate change through technology, planning and investment.

    “The five areas we considered for this estimate are early warning systems, climate-resilient infrastructure, improved dryland agriculture crop production, global mangrove protection, and investments in making water resources more resilient,” the report explains.

    The Commission finds that adaptation can produce significant economic returns. The overall rate of return on investments in improved resilience is high, with benefit-cost ratios ranging from 2:1 to 10:1, and in some cases even higher. Climate adaptation can also deliver a “triple dividend”, avoiding future losses, generating positive economic gains through innovation, and delivering additional social and environmental benefits.

    The report calls for adaptation that addresses underlying inequalities in society and brings more people, especially people most vulnerable to climate impacts, into decision making.

    The report considers various examples of climate change adaptation actions with clear economic, social and environmental benefits. The restoration of mangrove forests in Thailand, India and the Philippines also protects coastal communities from deadly storms while providing critical habitat to local fisheries and boosting the regions’ prosperity. In the Netherlands’s, the “Room for the River” strategy of moving dykes inland, widening rivers and creating water-absorbing plazas, also increases infrastructure robustness against increased flooding. Another example includes the use of drought-tolerant maize were able to increase harvest yields in Zimbabwe.

    “People everywhere are experiencing the devasting impacts of climate change,” said Bill Gates, Co-chair of the Bill and Melinda Gates Foundation and Co-chair of the Global Commission on Adaptation. “Those most impacted are the millions of smallholder farmers and their families in developing countries, who are struggling with poverty and hunger due to low crop yields caused by extreme changes in temperature and rainfall. With greater support for innovation, we can unlock new opportunities and spur change across the global ecosystem. Adaptation is an urgent issue that needs support from governments and businesses to ensure those most at risk have the opportunity to thrive, he added.

    “The report clearly shows that if we do not deal with climate change, it will result in great costs both humanitarian and economic. It requires us to work together across governments, civil society and, not least, the private business community,” commented Peter Damgaard Jensen, CEO of Danish pension PKA and Denmark’s representative in the Global Commission on Climate Change. “Climate change is the biggest challenge we face in our lifetime, and it is a challenge that cannot be solved by governments alone. The private sector plays a key role in supporting and financing the necessary restructuring. By investing in, for example, green infrastructure and micro-loans to the world’s poorest farmers, we can help those most affected by climate change.”

    Denmark is the only Scandinavian country that is a convening party to the commission.

    Image by Dominicus Johannes Bergsma from Wikicommons

    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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