We propose a macroeconomic model to assess optimal public policy decisions in the the face of competing funding demands for climate change action versus traditional welfare-enhancing capital investment. How to properly delineate the costs and benefits of traditional versus adaption-focused development remains an open question. The paper places particular emphasis on the changing level of risk and vulnerabilities faced by developing countries as they allocate investment toward growth strategies, adapting to climate change and emissions mitigation.
We propose a macroeconomic model to assess optimal public policy decisions in the face of competing funding demands for climate change action versus traditional welfare-enhancing capital investment. How to properly delineate the costs and benefits of traditional versus adaption-focused development remains an open question. The paper places particular emphasis on the changing level of risk and vulnerabilities faced by developing countries as they allocate investment toward growth strategies, adapting to climate change and emissions mitigation.
"Cognisant of the many facets of climate change, this report looks through the lens of economics, that is, the social science that measures the economic impact of climate change and the costs and benefits of trying to mitigate it and adapt to it. From an investment perspective, issues for study include the balance between investment in mitigating greenhouse-gas emissions and adaptation to climate change; the urgency and timing of investing in both; obstacles to investment; and policies to remove them and make investment profitable. From a growth perspective, issues of interest include the link between climate action and economic growth; the short-term and the long-term dimensions of this link; and the importance of innovation as an interface between climate action and economic growth. One of the key messages from this report is that there is unexploited scope for making Europe's climate action more efficient, growth-friendly, and in tune with fiscal constraints."--publisher's description.
This book serves as a guide for local governments and private enterprises as they navigate the unchartered waters of investing in climate change adaptation and resilience. This book serves not only as a resource guide for identifying potential funding sources but also as a roadmap for asset management and public finance processes. It highlights practical synergies between funding mechanisms, as well as the conflicts that may arise between varying interests and strategies. While the main focus of this work is on the State of California, this book offers broader insights for how states, local governments and private enterprises can take those critical first steps in investing in society’s collective adaptation to climate change.
Financially constrained governments, particularly in emerging and developing economies, tend to face a fiscal trade-off between adapting to climate change impacts and pursuing broader development goals. This trade-off is especially relevant in the agriculture sector, where investing in adaptation is critical to ensure food security amidst climate change. International trade can help alleviate this challenge and reduce adaptation investment needs by offsetting agricultural production shortages. However, in the presence of trade fragmentation, the adaptive role of trade diminishes, exacerbating food insecurity and increasing investment needs for adaptation. In this paper, we present a model to guide policymakers in deciding on the cost-efficient balance between investing in adaptation in the agricultural sector versus in broader development under financing and trade constraints. We apply the model to Ghana, Egypt, and Brazil, to examine the adaptation-development trade-off and highlight factors that would potentially lower adaptation investment needs. These factors include trade openness, higher agricultural productivity and efficiency of adaptation spending, and reduced labor market distortions. The key takeaways from the model applications suggest that (i) promoting trade openness and accessing concessional finance for adaptation help tackle climate challenges and ensure food security in lower-income countries; and (ii) domestic structural reforms are necessary to facilitate adaptation investments and reduce investment needs, by improving labor market flexibility, adaptation efficiency, and agriculture productivity.
Investing in Resilience: Ensuring a Disaster-Resistant Future focuses on the steps required to ensure that investment in disaster resilience happens and that it occurs as an integral, systematic part of development. At-risk communities in Asia and the Pacific can apply a wide range of policy, capacity, and investment instruments and mechanisms to ensure that disaster risk is properly assessed, disaster risk is reduced, and residual risk is well managed. Yet, real progress in strengthening resilience has been slow to date and natural hazards continue to cause significant loss of life, damage, and disruption in the region, undermining inclusive, sustainable development. Investing in Resilience offers an approach and ideas for reflection on how to achieve disaster resilience. It does not prescribe specific courses of action but rather establishes a vision of a resilient future. It stresses the interconnectedness and complementarity of possible actions to achieve disaster resilience across a wide range of development policies, plans, legislation, sectors, and themes. The vision shows how resilience can be accomplished through the coordinated action of governments and their development partners in the private sector, civil society, and the international community. The vision encourages “investors” to identify and prioritize bundles of actions that collectively can realize that vision of resilience, breaking away from the current tendency to pursue disparate and fragmented disaster risk management measures that frequently trip and fall at unforeseen hurdles. Investing in Resilience aims to move the disaster risk reduction debate beyond rhetoric and to help channel commitments into investment, incentives, funding, and practical action
This edited book aims to ignite both an academic and practitioner-oriented discussion regarding the question how the business and government sector can adapt to today’s fast-changing climate. Specifically, the collection seeks to explore how businesses and policy makers can prepare for a world where freshwater is scarce, extreme weather events are common, floods and wildfires are frequent, and global sea levels rise by more than two meters. In addition to assessing incremental approaches, it explores strategies that employ interdisciplinary and innovative solutions to climate change adaptation. The chapters included in this book examine and propose business and policy solutions for climate-induced economic, technical, urban, and societal challenges. It draws on an international range of prominent authors and, therefore, will be of interest for academics and practitioners working in the field of sustainability management, sustainable finance, sustainable operations management, food management, strategy, and environmental management. It can also serve as a valuable guide for practitioners and policymakers in those fields.
Part of the Greenleaf Publishing Responsible Investment Series.Mitigating and adapting to risks and changing circumstances is a natural part of doing business. But methods of mitigating and adapting can be quite different in terms of time, cost and observed impacts. The impacts of mitigation activities are more immediate while the benefits of adaptation activities may take many years to take effect. Nowhere is this difference more apparent than in the case of the corporate response to climate change.In the context of climate change, adaptation is the process of changing behaviour in response to actual or expected climate change impacts. Climate change adaptation is now emerging as a critical partner to mitigation, and indeed may even become the primary protection mechanism for future generations.In this unique book, Jason West provides a comprehensive assessment of the management of climate change adaptation in the corporate sector. The book provides a formal overview of the range of approaches available along with a series of practical case studies and examples that can be used by companies and other organizations to identify, assess and manage climate change adaptation.A major focus is on the financial and investment implications of climate change adaptation. West examines how firms can evaluate the investment decisions associated with long-term climate change adaptation measures, including how such investments can be valued and funded, the appropriate accounting treatment of such measures and appropriate risk management and governance practices in relation to such measures. The book also considers the needs and interests of investors and other stakeholders, and considers how they can assess the adequacy and appropriateness of corporate action on climate change.The Long Hedge will be essential reading and a key text for risk-practitioners, investors, financiers, scholars and policy makers in the field of climate change.
This report provides an assessment of how governments can generate inclusive economic growth in the short term, while making progress towards climate goals to secure sustainable long-term growth. It describes the development pathways required to meet the Paris Agreement objectives.
In 2008, the United Nations Framework Convention on Climate Change (UNFCCC) estimated that investments of between US 30 billion between 2010 and 20124 and to mobilize approximately US 100 billion per year by 2020 for climate change activities. Due to those high costs, and the relatively low sums governments are willing and able to directly provide for mitigation and adaptation, much of that funding for climate change-related efforts will have to come from the private sector. Timely mobilization of that capital will require coordination between the public and private sector to "scale up, shift and optimize" investment and financial flows contributing to climate change mitigation and adaptation. Governments must therefore adopt policies and implement tools furthering that coordination.
