Investec analyses this and other critical questions about adaptation finance — one of the key themes of the UN Climate Change Conference Part of Caversham road in Pinetown was washed away during the devastating floods in KwaZulu-Natal in April 2022. Picture: Gallo Images via Investec
There's a pressing need to invest in climate adaptation to build resilience and protection capacity to limit or eliminate the negative impacts of climate change on African lives and livelihoods.Climate adaptation refers to the climate impacts that come as a result of a steady deterioration in the environmental conditions required for daily living, for example access to water, energy, air quality and tolerable working temperatures.
There is a pressing need to invest in climate-change adaptation to support people, small and medium enterprises , municipalities, corporations, financial players and governments in building resilience to these climate impacts.The global climate financing needed to address climate issues is severely lacking, despite many pledges from the developed world at recent Conference of Parties meetings.
Adaptation finance tends to be in the form of loans that need to be repaid, increasing the burden of debt for developing countries who have limited public finances available.These countries require grant-based funding from a climate-justice perspective, which argues that vulnerable, less-developed countries have had little responsibility for climate change and should therefore be financially assisted by the developed world.
Besides providing further capital, commercial banks are able to leverage their critical banking relationships with farmers, co-operatives and SMEs — all of whom contribute valuable adaptation solutions.There are many challenges and barriers to adaptation finance that must be addressed. Investment needs to be activated from an extensive range of public and private sources with many hurdles to be overcome, such as regulatory barriers and a dire lack of robust climate data.