This is the world’s reality, one in which climate adaptation is critical because even with rapid and substantial greenhouse gas emission reduction over the next decade and beyond, countries still need to adapt to protect themselves from the continuing negative effects of climate change, which are expected to worsen.
“This is what adaptation is all about,” says Cinzia Losenno, lead climate adaptation expert at the European Investment Bank. “It’s about taking urgent action based on an understanding of how the climate has changed and will change, and what that means to our way of living, to our economic activities, to people, communities, businesses, and everything that we do.”
While in the past, developing countries remain the most vulnerable and adversely impacted by climate change, the developed world has become acutely aware of the threat, having been hit increasingly hard by the negative impacts over the last decade.
“There are no safe havens,” says Losenno. “Climate change poses a global threat. It's a global problem. And we need to adapt now in every region.”
Losenno speaks from authority and experience. She has advised on climate adaptation for nearly two decades, including six years in Asia working as the lead climate change adaptation specialist at the Asian Development Bank and four years as a policy adviser to the UK government in its department for environment, food, and rural affairs.
There are no safe havens. Climate change poses a global threat. It's a global problem. And we need to adapt now in every region.
At the EIB, she is leading the institution’s work on climate adaptation, which this year has taken on even greater importance. Indeed, at COP26 the EIB unveiled its first dedicated Adaptation Plan, which seeks to strengthen the investment and technical support to protect projects from the impact of more extreme weather as well increase climate resilience of existing and new infrastructure.
“The main aim,” says Losenno, “is to ensure that the EIB can be more responsive and better equipped to meet the needs of clients in coping with the changing climate.”
She adds that there are three main goals to achieve this.
The first is increasing adaptation finance and investment, and especially in support of the European Union Adaptation Strategy for smarter, more systemic, and faster adaptation, both across Europe and globally.
Strikingly, the EIB’s new adaptation finance target – the first time the bank has actually set one – over the next five years is almost triple the value of all the adaptation finance it has provided over the previous five years.
“It is a significant increase in our commitment to an area that has historically represented a smaller portion of our climate action compared to mitigation,” says Losenno. “Moving forward, this target will not only provide us with internal incentives to do more in adaptation finance it will also help us better communicate to the rest of the world that we aim to be a key global player in this important area. Ultimately we are ready to work with public and private sector entities to ensure that they can be better prepared for the future.”
Importantly, the EIB has identified a number of key investment areas, including supporting adaptation in coastal cities – for instance, investments in early warning systems, structural defences such as storm surge barriers, as well as nature-based solutions – and cities inland.
“Cities in all regions play a unique, powerhouse role, bringing together economic activities, which is why it is so important to protect their energy and transport infrastructure networks and services by increasing investments in these areas,” says Losenno.
The other two goals are increasing the use of robust climate impact data and information in all the projects the bank finances, and supporting the adaptation needs of the most vulnerable regions, and especially in some of the least developed countries of Africa and in small island developing states.
“Being able to access and analyse robust climate change information is fundamental for us and our clients in being able to accurately understand how climate change is affecting operations,” says Losenno.
To that end, the EIB aims to launch an advisory services platform, called ADAPT, which will support public and private sector institutions in the EU, together with the bank’s international partners, in developing investment, plans and strategies on climate adaptation.
The third goal – addressing the disproportionate impacts of climate change on the most vulnerable regions of the world – is an ambitious mission for the EIB, and one that Losenno says will require “enhanced collaboration with the EU, international partners, clients, financial institutions, including multi-lateral development banks, and centres of excellence in climate change adaptation.”
The need for greater collaboration on adaptation strategies and implementation cannot be overstated. It ultimately requires a localised approach. “A coastal city in the Mediterranean region will obviously need to prepare differently than a city in the Himalayas,” says Losenno.
She adds that the EIB has learned from the work that it has done with other multilateral development banks “just how important understanding the local context is in climate adaptation if you want to have any material impact in this area.”
“We’ve learned from and built on that experience, using it to develop our own thinking on the role of the EIB in this area, both in the EU and outside. Collaboration is therefore essential,” she says.
This extends to the private sector, although securing support for climate adaptation and the financing of it from companies and investors is more challenging. Together with some investment barriers, such as market failures, there is a perception that adaptation is a public sector issue.
For Losenno, adaptation does have a public sector nature – “it is about protecting people, businesses, ecosystems, and assets from the negative effects of climate change” – but she feels there is plenty of scope for greater private sector investment and collaboration.
“The private sector can play a crucial role innovating in this area and in the same way it has played an essential role in accelerating the transformation to a low carbon economy through the development of renewable energy and low carbon technologies,” says Losenno.
Some examples could include the developing digital technologies that, through enhanced communication, could enable cities and famers to better anticipate extreme weather events. Advancements in climate analytics technology could also help better inform decision making.
“These are just some examples of a new emerging area where we think the private sector can really play a fundamental role in growing and developing,” says Losenno.
In addition, she believes the EIB has an important role to play in helping to unlock greater investment in adaptation by the private sector.
“By working with the public sector to develop a regulatory framework for adaptation, we will be able to support and push-up demand from the private sector to invest more and develop some of solutions we need. It is through these actions in the public sector, that greater engagement from the private sector can be facilitated.”
