By Vanora Bennett
LONDON, Nov 16 2022 (IPS)
As it moves to increase its climate adaptation finance, the European Bank for Reconstruction and Development (EBRD) has launched the EBRD Climate Adaptation Action Plan (CAAP) at COP27, the global climate summit taking place in Sharm el-Sheikh, Egypt.
Climate adaptation – adapting to already existing climate change and anticipating future changes in long-term planning – has been an increasing focus of attention in recent years as the current level of global warming is already causing extreme weather events to multiply and intensify. It is one of the core themes of COP27.
The EBRD is a leader on climate finance but its business model, with a focus on the private sector, means that it has done more mitigation than adaptation, which is often publicly financed.
The EBRD Climate Adaptation Action Plan brings together a number of elements to strengthen the Bank’s adaptation work: integrating adaptation into project and policy design, building partnerships, developing business and mobilising private finance.
“We don’t have one single answer on adaptation; our response is a combination of a number of different tools and approaches,” said Harry Boyd-Carpenter, EBRD Managing Director, Climate Strategy and Delivery. “We increasingly see adaptation not as a cost but rather as an investment that protect economic development and preserve the competitiveness of our clients.”
At last year’s climate summit, COP26, the Glasgow Climate Pact included a commitment from developed countries to at least double – from the 2019 levels of US$ 20 billion – the collective adaptation finance to developing countries by 2025. Increased adaptation finance is particularly important to address the climate vulnerability of EBRD regions
Several EBRD countries – especially those in the Southern and Eastern Mediterranean (SEMED) and Central Asia – are extremely vulnerable to the impacts of climate change. Between 2008 and 2018, insured losses to extreme weather events in EBRD economies totalled US$ 25 billion.
Chronic water stress has already changed the landscape, and warming in the region is expected to exceed the global average. In the face of these risks, the EBRD is building new partnerships to identify and support opportunities for investing in greater resilience.
During COP27, the EBRD signed a Memorandum of Understanding (MoU) to expand its partnership with the Global Centre on Adaptation. In line with the Bank’s conviction that Africa has strong potential as a global leader in climate adaptation, it also endorsed the Africa Adaptation Acceleration Programme (AAAP), which aims to mobilise US$ 25 billion over five years to scale climate adaptation action.
President Odile Renaud-Basso spoke at multiple events on the need for more adaptation finance, including the COP27 World Leaders event, Accelerating Adaptation in Africa, and discussed adaptation with the African Development Bank’s President Akinwumi Adesina.
Over the past decade, the EBRD has financed over 350 climate resilience investments with a business volume of more than €10 billion and adaptation finance exceeding €2.8 billion.
Since issuing the world’s first dedicated climate resilience bond in 2019, the EBRD has also prepared the Guide for Issuers on Green Bonds for Climate Resilience, together with the Global Center on Adaptation (GCA) and the Climate Bonds Initiative (CBI), to provide practical guidance to sovereigns, sub-sovereigns, financial institutions and corporates on raising capital in the green bond market to invest in climate adaptation and resilience.
At the forefront of climate finance, the EBRD has committed to make more than half of its investment green by 2025 and to align all its operations with the goals of the Paris Agreement by 1 January 2023. In preparation, the Bank now screens every project for its climate resilience and systematically identify adaptation opportunities.
Footnote: The European Bank for Reconstruction and Development (EBRD) was established to help build a new, post-Cold War era in Central and Eastern Europe. It has since played a historic role and gained unique expertise in fostering change in the region – and beyond – investing €170 billion in more than 6,400 projects.
At COP27, the EBRD launched its Climate Adaptation Action Plan to boost adaptation finance. The plan involves integrating climate resilience into project design, building new and enhanced partnerships, and mobilising private finance. Adaptation finance is deemed crucial to address climate vulnerability of EBRD regions.
Vanora Bennett is EBRD green spokeswoman / Ukraine, Moldova, Romania, Georgia and Armenia
IPS UN Bureau