Climate Mitigation VS Climate Adaptation
Increasing concentrations of greenhouse gases (GHG) pose serious health and environmental threats to the world. Which is why, "climate mitigation," which refers to efforts to lessen the severity of climate change by preventing or reducing atmospheric GHG emissions, is paramount. Although mitigation stabilizes the climate, the effects of climate change that are already present will not simply disappear overnight. The world will continue with these effects for years, which is why climate adaptation is now essential.
CLIMATE ADAPTATION AT COP27
At COP27, climate adaptation is one of the key focus areas. With 3.3 billion people living in highly vulnerable climate contexts, it is clear that real climate adaptation action and progress must be made. Developing countries continued to stress how many of them lacked the resources to respond to climate impacts and urged rich countries to honor their promises of providing $100 billion a year in climate finance. Dina Saleh, the Regional Director of the International Fund for Agricultural Development, added, "and to channel half of that amount to climate adaptation.”
CLIMATE ADAPTATION: PRIVATE SECTOR OPPORTUNITIES
According to the World Economic Forum, the climate adaptation market could be worth $2 trillion by 2026, and the need for adaptation solutions will continue to grow as climate impacts become more prevalent. As the opportunities in the climate adaptation sector remain relatively unknown, becoming an early market entrant could be highly beneficial for businesses. An example is E Green Global, a Korean company producing the world’s first disease-resistant potato seedlings. It promotes climate adaptation by improving crop resilience against changing climate conditions and has secured $92 million in funding thus far.
"Blended finance" is also becoming increasingly popular as a way to incentivize private sector investments. According to the International Finance Corporation, blended finance is "small amounts of concessional donor funds to mitigate specific investment risks." This rebalances the risk-reward equation for pioneering investments that wouldn’t be able to proceed on strictly commercial terms." The UN’s Green Climate Fund has invested $3.9 billion in 45 private-sector climate projects and was able to mobilize over four times the amount of total capital from private investors. This blended finance structure creates a win-win situation for the private sector and wider society.
There is no questioning the importance climate adaptation in today’s context. Simultaneously, it presents businesses with an opportunity for GREAT financial returns while creating a positive and long lasting impact on the world.
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