Moving from COP28 to adaptation in the real economy, and some 2023 reflections.

So it’s the end of the year, and it’s time to write up some reflections both from COP28, and from my first 9 months as a senior climate adaptation specialist!

Firstly, on COP28.  I’m slightly later than many others, but I’ve been drawing together some reflections. Away from the noise of the debates on fossil fuels, people may be less aware that there was significant improvements in the operationalization of adaptation. There were a range of new agreements in the cover decision on the global stocktake. These included:

• Agreement to establish national inventories of climate impacts
• A commitment that by 2027 all Parties have established multi-hazard early warning systems, climate information services for risk reduction and systematic observation to support improved climate-related data, information and services;
• Specific references to the need for both incremental and transformational adaptation
• Acknowledgement of the issues of transboundary climate risks
• A recognition of the need for greater long-term planning on adaptation due to the issues of timing and uncertainty on the effectiveness of mitigation
• Formalisation of adaptation planning approaches, recognizing the cycle ….”is an iterative process, consisting of risk and impact assessment; planning; implementation; and monitoring, evaluation and learning”

We also got seven target areas for adaptation – on water, food and agriculture, health, ecosystems and biodiversity, infrastructure and human settlements, poverty and cultural heritage as well as targets on the process – risk assessment, planning, implementation and MEL.

There were a few key things on finance too. Alongside the early win of the Loss and Damage Fund (although there are lots of caveats on that!), there was also an acknowledgement that adaptation finance has to be scaled up far beyond the doubling promised at Glasgow, and another recognition recognizes the role of the private sector and highlights the need to strengthen policy guidance, incentives, regulations and enabling conditions to reach the scale of investments required to achieve a global transition towards low greenhouse gas emissions and climate-resilient development.

So far, so good. But what happens next?

Well, we all know that COP’s are meant to be taken as signals; common directions that the world has agreed to go in -  so we really need to see what it means for the real economy. On mitigation, that is very clear, since the transition away from fossil fuels is likely to affect real economy investment decisions in different types in solutions.

It’s hard to argue that we’re in the same position on adaptation. Most of the agreements and decisions were high level, related to process, or established new public sector funding with limited emphasis on private sector action.

The work we’ve done with UNEP this year on the Adaptation Finance Gap shows there is a growing gap as we better understand needs and warming accelerates. Building on this, the work we’ve done this year with Pathways2Resilience, ADB and the OECD on Adaptation Investment Planning shows there’s a strong argument that Governments need to start thinking more deeply about what the investment needs for adaptation are, and what role they want the private sector to play in achieving their Adaptation Communications and National Adaptation Plans. This is not just in finance, but also in every sector of the real economy, and how are they going to get them to play their roles.

Investing in resilience doesn’t always make financial sense for the private sector – but in many ways this is also the case for new technologies and approaches more widely (not just mitigation) and governments can use a range of signals, like regulation, subsidies, tax breaks or blended finance instruments to crowd in the private sector.

However, the use of such tools is predicated on a clear view of what good adaptation looks like, and what Government expects businesses to do, and most NAPs have not really thought this through yet.  In the UK, we are starting to see this in some areas in UK policy – for example, the ELMS scheme is setting out the roles farmers and the agriculture can play in restoring landscapes, and talks about wider issues like green jobs. We now need to build on this further – what level of climate risk should housebuilders, or real estate owners be assuming, and what standards of protection should they be planning for, what climatic conditions should products and services be designed to operate in?

We know that this needs to be different mix for adaptation than mitigation, and it can’t just be a straight lift and drop, given the deep uncertainties in adaptation planning, and the range of barriers to action. But we need to start collectively sketching these out in more detail. Until we do, we will remain unable to deploying the broader range of policy tools and regulations that have been used to foster exponential change in mitigation in anger (e.g. in relation to renewables or EVs), to encourage the private sector to invest in resilience, finance others and engaging effectively in a broader dialogue for progress.

My hope for 2024 is that we start to get into defining who does what in much more detail. The seven target areas from COP28 provide a good starting point for looking at these. This is a nice segway into my own personal change, since much of my time this year has been working with others to develop frameworks that make this happen – whether it be launching the adaptation investment planning approach from Pathways2Resilience and CLIMATEFIT_HEU , helping the Transition Plan Taskforce progress adaptation and resilience disclosures, better understanding economic risk with Highland Adapts , or developing bankable investment propositions with Verture .

2023 has been a big year of change for me personally – transitioning from the public into the private sector, and really getting stuck into the guts of adaptation in detail. And I have to say I’m loving it. I was worried I would struggle, or I wouldn’t enjoy it  But as I sit here at the end of the year, my worries were mislaid. In a recent interview, astronaut Tim Peake was outlining how he could have gone onto become a senior officer in the army, but had the confidence to stay with being a more advanced helicopter pilot, with his technical expertise eventually leading him to become an astronaut. I’m pleased to say that whilst it’s taken a bit of time to adjust from working from home, but with thanks to Paul, I’m more convinced than ever I made the right decision. Having got my feet under the table this year, I’m looking forward to a productive 2024.. In the meantime, wishing you all a happy, restful festive season.