APAN Climate Adaptation Forum: 3 Takeaways

By Feng Hu 15 November, 2018

CWR’s Hu shares 3 key takeaways on how to accelerate climate adaptation actions from the recent APAN Forum

With the launch of IPCC 1.5 degree report, the urgency to take climate actions is high. The increasing occurrence of extreme weather events around the globe shows that climate change is not something obscure or a future scenario. It is the current reality. We not only need to reduce GHG emissions, but also improve our capacity to adapt to the new reality.

During 16-19 October, I participated in the 6^th Asia Pacific Climate Change Adaptation Forum and spoke at one session on Policy & Governance (see photos). It is evident from discussion throughout the forum that the conversation on adaptation has been mainstreamed and the focus has moved onto how to accelerate & scale up actions.

It is evident from the forum that the conversation on adaptation has been mainstreamed & the focus has moved onto how to accelerate & scale up actions

In the same week, on 18 October, the Global Commission on Adaptation (GCA), consisted of 17 convening countries such as China, India & Bangladesh, was set up. Branding itself as a solution broker, it aims to accelerate adaptation action and support globally. One of its discussion papers identified 5 key factors that drive action: 1) political will and sustained leadership; 2) policy commitments, mandates, or legislation; 3) coordination across agencies and sectors; 4) information and knowledge; and 5) finance and supportive budgetary processes.

The first three are related to governance. The discussion below will thus focus on the 3 aspects: governance, information & knowledge, and finance.

1. Strong governance & better coordination needed to fill “action gaps”

By April 2016, 83% of countries included an adaptation component in their INDCs…

…however, concrete projects & activities are still lacking

Adaptation needs have been widely acknowledged and assessed by countries. According to UNFCCC, by April 2016, 83% of countries, a total of 137 Parties, included an adaptation component in their INDCs, which all covered information on key impacts and vulnerabilities. Countries are also moving to integrating adaptation into social and economic development planning.

However, concrete projects and activities are still lacking. As pointed out by the GCA brief, “as governments shift from developing climate policies to implementing them and mainstreaming climate action into development processes, the political will often plummets, especially if climate action conflicts with other, more immediate priorities.”

Given such gaps, more strategic & collaborative approaches are required. As proposed by one recent brief from NAP Global Network, country efforts can be better aligned to improve “coherence, efficiency & effectiveness” of adaptation actions:

• Globally, alignment across three global agendas: the 2030 Agenda for Sustainable Development, the Paris Agreement and the Sendai Framework for Disaster Risk Reduction; and
• National governments could look for synergies between different national goals & strategies, such as the Sustainable Development Goals (SDG), Nationally Determined Contributions (NDC), National Adaptation Plan (NAP) and disaster risk reduction (DRR) strategies, etc.

At the very local level, especially cities, there is also progress in adopting a more integrated approach. Representatives from Arup shared on China’s ‘sponge cities’. The Chief Resilience Officer (CRO) of Bangkok city, one of the 17 Asian cities under the “100 Resilient Cities” initiative, shared their experience of adopting both nature-based adaptation solutions and grey infrastructure.

For countries sharing the same river basin, transboundary cooperation should also include climate adaptation & disaster management

Moreover, for countries sharing the same river basin, transboundary cooperation should also include climate adaptation and disaster management. As proposed in our recent report “No Water No Growth – Does Asia Have Enough Water To Develop?”, through better water-nomic cooperation, riparian countries could focus on shared benefits & development and resolve transboundary issues. One positive development is, more cooperation between Mekong countries and existing regional bodies is expected, as shown in the First Lancang Mekong Water Resources Cooperation Forum held during 1-2 Nov 2018.

2. We still need more data; but more importantly, better ways to work with uncertainty in decision making

We often hear the complaint: there is lack of data. For many parts of the world, with technological advances, we actually have access to a significant amount of data, from near real-time earth observation to government statistics, most of which are also free. What is often lacking is, however, data with usable resolution/precision and accuracy.

“It is not only gaps in info, but also gaps in use of info in decisions & how to use info within the organisation”

As pointed out by Paul Watkiss from SEI, it is not only gaps in information, but also gaps in use of information in decisions and how to use information within the organisation. There are growing number of tools that try to offer comprehensive visualisation or interpretation of data. For instance:

• UNESCO and ICIWaRM launched Climate Risk Informed Decision Analysis (CRIDA), a stepwise planning guidance for water management under uncertainty;
• WRI and its partners launched Resource Watch, a free, open data visualization platform that overlays various topics from climate, energy, food to water;
• ADB has been using spatial databases for screening of investment projects against climate risks; and
• Japan is trying to establish an Asia Pacific Adaptation Information Platform (AP-PLAT) by 2020 to share climate risk information online. It has already established its national system (A-PLAT) and is also helping Thailand in developing one.

However, there still remains the challenge of uncertainties in adaptation decision making, as highlighted by several economists during the forum. Such uncertainties come not only from the nature system and our current climate modelling, but also the human and social systems. But, it “should not be the excuse for inaction”, notes one expert.

Rentschler from the World Bank highlighted the importance of local stakeholder consultation in identifying investment options

To overcome such challenge, Paul suggested that we should first understand the project (rather than the projections) and focus on what matters for the region. Jun Rentschler from the World Bank highlighted the importance of local stakeholder consultation in identifying investment options: the final decision may not be the “optimal” option but the least “regretful” one.

In short, it is not enough to simply put out information. For users, especially the private sector and many vulnerable communities, guidance will be needed on how to use information.

3. A “nexus” approach to financing climate adaptation through multiple channels & by delivering multiple benefits

Many experts highlighted the role of the private sector in mobilising finance for adaptation. This is because, international climate finance and national funds alone simply won’t be enough.

For example, only USD2 billion in climate finance from multilateral, bilateral national funds was approved for the HKH 8 from 2003 to May 2017. This is far less than the needs: three of the HKH 8 specified their adaptation finance needs in their NDCs, which are Afghanistan (USD10.785 billion, 2020-2030), Bangladesh (USD40 billion, 2015-2030) and India (USD206 billion, 2015-2030). This is not to mention that for the four most at-risk HKH river basins (the Ganges, Indus, Yellow & Yangtze) alone, the estimated total GDP is already at USD3.8 trillion in 2015.

Patwardhan from the GCA proposed “Nexus” financing to support projects that delivers multiple benefits and/or covers multiple sectors

To fill the finance gap, multiple channels and innovative mechanisms need to be sought after. For instance, Anand Patwardhan from the GCA proposed “Nexus” financing to support projects that delivers multiple benefits and/or covers multiple sectors. ADB commits USD80 billion in climate finance from 2019 to 2030. In China, water rights trading has been piloted in 7 provinces since 2014, whose experience could be shared in the region.

Moreover, for the private sector to take part, it is not only important to create economic incentives, but also to push for better disclosure. Xianfu Lu from ADB stressed that “disclosure is the first step…[because] what cannot be measured cannot be managed”.

From July 2016 to July 2018, S&P Global Ratings found 147 cases globally where ESG factors resulted in a rating action

Already, financial rating agencies have started looking to factor in climate risks and the broad ESG issues. From 31 July 2016 to 31 July 2018, S&P Global Ratings found 147 cases globally where ESG factors resulted in a rating action. Tools such as S&P Global Ratings’ Green Evaluation provide an asset-level assessment framework of the environmental impact and climate risk attributes of investment portfolios.

Last but not least, it is very important that our current modelling & measurement cover the poor. As highlighted by David Simmons from Willis Towers Watso, in the face of climate disasters, the poor often has the least to lose in capital terms, but the most in all other terms. He also asked, if we embed climate disasters into sovereign rating, what about the potential loss of economic opportunities for the poor?

The forum has ended, but it leaves us a lot more questions & challenges to work on.

Further Reading

• Have Investors Incorporated Climate Risks Into Portfolios? – Hear from WWF HK’s Jean-Marc Champagne & Sam Hilton on their new report that introduces climate change & financial risks to institutional investors, focusing APAC & the energy sector
• Upgraded Water Risk Filter: From Assessment To Response – WWF’s Water Risk Filter has been upgraded, from expanded data sets & climate change projections to new response & valuation sections. Their Ariane Laporte-Bisquit highlights everything new
• Dell’s Water Stewardship – Dell is not only reducing water use in its supply chain but also managing water as a shared resource at a watershed level through water stewardship. Find out more from their Jason Ho
• Big Data Accelerates The Expansion Of Green Supply Chains – Check out which brands are leading on green supply chains in China as IPE’s Erin Wong & Helen Ding share results from the 5th CITI report, which also includes a new GHG emissions index
• Belt & Road Initiative Injects Vitality Into Economies – Professor Asit Biswas & Cecilia Tortajada from the National University of Singapore show how China’s Belt & Road Initiative can benefit developing economies in Asia & Africa by promoting connectivity

• CWR Report: No Water No Growth – Does Asia Have Enough Water To Develop? – Rivers are important to Asia. The Amu Darya, Brahmaputra, Ganges, Indus, Irrawaddy, Mekong, Salween, Tarim, Yangtze and Yellow are the continent’s cradles of civilization. Much of Asia’s population and economy are clustered there. Yet, climate change, evident in their common source region, the Hindu Kush Himalayas (HKH), threatens their upper watershed.The flow of these 10 mighty rivers that provide water to 16 countries could be affected. One in every 2.5 Asians live along these rivers and over USD4 trillion is generated in these 10 river basins, but there is little conversation on the threats to Asia’s Water Towers or water and climate risks faced by these rivers.To catalyse such conversations, this report seeks to provide an overview of the challenges that are extremely critical to Asia.

• Hindu Kush Himalayas – Why The Third Pole Matters – What is the Hindu-Kush Himalayan (HKH) region and why does this “Third Pole” matter for Asia’s economy? How we can protect the region better? We sat down with Dr David Molden, the Director General of ICIMOD to find out more
• Tackling Asia’s Water Challenges – Following China Water Risk’s new report highlighting Asia’s water challenges and the Hindu Kush Himalaya region, Cecilia Tortajada from the Lee Kuan Yew School of Public Policy calls for action from the investment community
• Water Rights In China: 4 Years On – 4 years on, what is the status of the water rights trading system in China? Find out in our in-depth interview with Prof. Jia Shaofeng, the Deputy Director of the Center for Water Resources Research at the Chinese Academy of Sciences
• Can APAC Lead In Adaptation Finance? – After attending two key climate conferences, including COP 22, CWR’s Hu shares why adaptation financing in APAC is crucial though it’s lagging and how the private sector can lead this effort
• ‘Science Unusual’ to Counter Fake News! – Science & policy have their own language but given significant climate risk overshadowed by fake news, can we afford to speak in tongues? Hu & Tan on why it’s time to step up efforts to bridge science and policy with finance
• Upper Yangtze: Integrated Water Management & Climate Adaptation – Experts from China & Switzerland introduce their joint project to enhance water management & climate adaptation in the Jinsha River Basin. What lessons have been learned & what is next?