Cost of Climate Change: $500 billion needed for adaptation by 2050

By Anam Zeb

At the APAN 2016 conference in Colombo, speakers from Asia and throughout the world highlighted the costs of climate change globally, and then specifically for Asia. In particular, experts from the UNEP have suggested previous estimates may have been inaccurate, and up to 500 billion USD per year will be the cost of adaptation globally.

‘In terms of climate change adaptation, at local level people do not have the luxury of planning too far ahead for adaptation’ explains Atiq Rahman, Executive Director of the Bangladesh Centre for Advanced Studies (BCAS) Bangladesh, ‘for them it is a question of their next meal’. . He is echoed by Barney Dickson, who stressed the importance of planning for adaptation in that ‘large scale investments, such as in infrastructure, must be climate resilient’ emphasising that developing countries can no longer afford to invest in development that may not be able to withstand climate change impacts in the coming decades.

Barney and Atiq are two of more than 800 delegates from throughout Asia who have gathered in Colombo to attend the 5th Asia Pacific Climate Change Adaptation forum. This includes representatives from the media, civil society, and even governments, who are preparing to share experiences and best practices surrounding best practices on climate change adaptation in the region.

Atiq, and representatives from Germany, Japan, Sri Lanka and the UN highlighted in the opening session the need for adaptation planning to be more inclusive of all sectors. The other speakers echoed Atiqs earlier statement by confirming that planning for climate change must go beyond simply short term planning and a limited strategic vision.

Barney furthered this by adding that planning for climate change must be ‘across sectors and ministries’. With all the stress being placed on planning for climate change adaptation, the question necessarily arises as to who is responsible for climate change planning. As the responsibility for climate change in a national context moves away from the traditional approach where a single ministry is responsible, there is an opportunity to redesign the way climate planning takes place. ‘Planning must be across sectors and ministries’ says Barney; this was confirmed by Atiq Rahman who suggested that local governments, the private sector in vulnerable countries are realizing that climate change must be integrated into all development planning.

However, climate change adaptation does not come for free. Following the Paris Agreement, the official amount quoted that will be needed by the GCF on an annual basis for Climate Change funding would be to the tune of USD 100 billion, globally, following 2020. However, Panelists at the conference suggest this may be woefully low, as this financial aid will split into two pots; one for mitigation and one for mitigation.

‘In terms of adaptation, this amount may not even be accurate. Newer studies suggest that between 180 billion and 300 billion USD will be needed annually for adaptation alone following 2020. By 2050, 500 billion USD a year will be the cost of adaptation globally’ said Barney, quoting figures from the UNEP report titled ‘The Adaptation Gap Report, 2016’.

For Asia, this is information may very well serve to be a jolt into action. The region as a whole faced the most climate related disasters between 2000 and 2008, and cost 27.5% of GDP in this period. Compensating for these losses, while ensuring effective, non-erosive adaptation, is the current challenge faced by policy makers; and indeed, those responsible for development of budgets.

But budgets cannot simply be wishlists. The money needs to come from somewhere, as highlighted by the speakers in the conference. As it becomes clearer that adaptation will cost much more than previously estimated, there is a need to get creative in thinking about sources of funding.

One of these sources could potentially be the private sector. Traditionally viewed with slight skepticism, particularly by climate activists who doubt their motives in investing in climate change, the private sector has been invited following COP21 to participate in the climate arena. ‘When we started the National Adaptation Plan (NAP) process’ says Buddi Marhambe, National Experts Committee on Climate Change Adaptation, ‘the private sector was invited to participate, but did not show much interest’.

Information and incentive development for the private sector to participate meaningfully and transparently is therefore of paramount significance. This can only be done if governments themselves fully acknowledge the threat of climate change- an area that panelists said needs more work.

The views expressed here are solely of the author’s and not of CAN South Asia’s.