KUALA LUMPUR (Thomson Reuters Foundation) - Governments and aid agencies are failing to tap into the hundreds of millions of dollars available to protect vulnerable people from the impacts of climate change, an Asian climate forum heard on Thursday.
Contrary to the common belief that few funds are on offer for measures to cope with rising sea levels and more extreme weather, there is “no shortage of money”, said Peter King, senior policy advisor at the Japan-based Institute for Global Environmental Strategies (IGES).
“There is a shortage of creativity, ingenuity and capability to find new and additional ways of accessing the large amount of money which is flowing around the global system,” he told the Thomson Reuters Foundation on the sidelines of the Asia-Pacific Climate Change Adaptation Forum.
Since 2007, companies have spent $484 billion in the water sector alone under social responsibility initiatives, said King, a former environment specialist at the Asian Development Bank.
Pension funds have $32 trillion under management, while $674 billion a year is invested in fossil fuels, he noted. “If we start to move away from fossil fuels, where will that money go? Can it be re-directed to climate change adaptation?” he asked.
Adaptation projects range from building higher sea walls and better roads, to developing resilient crop varieties and early warning systems.
Richard Klein, senior research fellow at the Stockholm Environment Institute (SEI), said adapting to climate change has become a priority because of insufficient efforts to reduce greenhouse gas emissions which are “increasing every year”.
As a result, many scientists say the world is not on course to limit global temperature rise to 2 degrees Celsius, as governments have promised to do.
To deal with the fallout, governments and aid groups should consider new revenue streams, including from the private sector and capital markets, said King.
Business is already on board the fight against climate change, King said, pointing to environmental initiatives by financial institutions like Citigroup and Bank of America worth tens of billions of dollars.
With global associations of institutional investors looking to make environmental, social and governance investments, “we’ve just got to find a way of directing some of the attention to climate change adaptation”, King said.
“The first thing is for governments to stop treating the private sector as the enemy, to work in a collaborative sense with them,” he added.
But the SEI’s Klein said financing is just one of the many barriers facing implementation of climate adaptation programs. “There’s also lack of technology, lack of knowledge and lack of functioning institutions,” he said.
The way adaptation has been funded so far - on a project-by-project basis - may have to be reconsidered as more money becomes available, Klein told the Thomson Reuters Foundation.
“It will require an enormous amount of overhead,” he said. Costs include staff to prepare and evaluate proposals, and setting up mechanisms to disburse money to and within countries.
Governments and the fledgling U.N. Green Climate Fund (GCF) are still figuring out how to organize the process, Klein said. There are also risks of corruption, mismanagement of money and lack of government capacity to handle large sums, he warned.
The GCF, intended to become a major international finance channel for clean energy and adaptation, has been promised some $2.3 billion so far. It plans to hold a first pledging conference in Berlin on Nov. 19-20.
Tao Wang, the GCF’s director of mitigation and adaptation, said the fund aims to maximize its impact and efficiency. “We do want to simplify the process and reduce the transactional cost,” he said.
Reporting by Thin Lei Win; Editing by Megan Rowling