The Climate Policy Initiative (CPI), based in San Francisco, studies public and private global investment in climate change. Its 2021 report, titled “Global Landscape of Climate Finance,” sounded the alarm about the need for much more robust investments in climate adaptation and resiliency.
The Climate Policy Initiative (CPI), based in San Francisco, studies public and private global investment in climate change. Its 2021 report, titled “Global Landscape of Climate Finance,” sounded the alarm about the need for much more robust investments in climate adaptation and resiliency. These are strategies that are desperately needed to help communities around the world cope with the climate impacts that are already putting them in danger.
But investment in mitigation strategies, designed to reduce greenhouse gas emissions through renewable energy systems, renewable fuels and carbon capture, accounts for more than 90 percent of total climate finance. Investment in adaptation garners only about seven percent, and attracts very little private investment. Most critically, only a fraction of that adaptation funding goes to nature-based projects like the restoration of wetlands, coastlines, river shorelines and forest ecosystems.
Why is this so significant? For one thing, nature-based measures are consistently more effective and less expensive than more high-tech engineered strategies like sea walls, levees, storm-surge barriers and sea gates. For another, nature-based measures can grow organically to meet needs. For example, mangroves self-seed inland as sea levels rise, while man-made surge barriers may simply shift flooding from one community to others nearby.
There are plenty of examples of successful nature-based projects. The Netherlands-based nonprofit Wetlands International is working with numerous partners and investors to restore coastlines using methods like replanting mangroves and seagrasses and restoring mudflats and saltmarshes that protect coastal communities in South and Central America, Asia, Indonesia and Africa. Communities, government agencies and nonprofits have organized a massive coastal restoration initiative in southeast Louisiana, with more than 100 projects that will restore the marshlands, barrier islands, reefs and shorelines that provide natural protection from storm surges for New Orleans and hundreds of smaller communities.
CPI’s report touches on several reasons why adaptation funding gets short shrift, including a lack of accurate and robust information about adaptation strategies—a knowledge gap—and a perception that investors will not be able to realize a favorable return on investments in adaptation. That’s a profit gap.
Most critically, the report invokes the work of Mark Carney, former governor of the Bank of England, who coined the phrase “the tragedy of the horizon” to describe how our relatively short business and political cycles (roughly three to four years) are not conducive to dealing with the slow-moving catastrophe of climate change, the worst impacts of which will be experienced by future generations.
Investors and politicians are not incentivized to take responsibility for events they perceive as far out on the risk horizon. In addition, the value-added benefits realized through nature-based strategies, including habitat restoration, enhanced biodiversity, recreational opportunities and improved human health, are complex and difficult to quantify.
In 2015, Carney joined with Michael Bloomberg to establish the Task Force on Climate-Related Financial Disclosures (TFCD), aiming to address what he has called the cognitive dissonance in the financial world regarding climate change. TFCD aims to help individual companies, industries and financial markets accurately price climate risks and identify related opportunities as they would any other risk, through accurate and timely disclosure and analysis.
The phrase “tragedy of the horizon” came back to me viscerally when I recently caught up with a report published last September in the journal Lancet Planetary Health. Researchers in Britain, Finland and the U.S. shared the results of an unprecedented survey of 10,000 young people aged 16-25 in Australia, Brazil, Finland, France, India, Nigeria, the Philippines, Portugal, the U.K. and the U.S. The results indicated deep and widespread feelings of anxiety, betrayal, abandonment and moral injury stemming from the lack of effective governmental response to climate change. Three out of four young participants said they were frightened about the future.
Ultimately, the tragedy of the horizon signifies a set of failures—moral, perceptual, political and economic—that are endangering vulnerable communities right now, and also placing severe mental stress on children and young adults around the world.
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