There’s No Planet B: Financing Climate Adaptation Intro
Extreme natural disasters loom even if we succeed in limiting global warming to 1.5°C to 2°C above pre-industrial levels. Already, Californians are choking on smoke, North Africans are running out of water, Southeast Asians are fleeing from floods1 and major cities around the world risk inundation as sea levels rise. Unfortunately, there will be no escaping the need for projects that help us adapt to a changing climate. As governments and supranationals issue bonds to pay for them, they could drive a large-scale expansion of the green bond market.
The Netherlands leads other countries in its issuance of green bonds whose proceeds are tied to climate adaption projects. An unsurprising fact as the Dutch are famous for their ability to live in harmony with their many in-land rivers. Yet the chart below may soon change, as the UN estimates that the annual amount spent globally on adapting to climate-change needs to be five to 10 times higher than current spend,2 and countries continue to contend with more aggressive weather caused by climate-change.
Source: Bloomberg MSCI Green Bond Index, MSCI ESG Research; Aggregate data as of Nov. 1, 2021. Note that numbers for bonds which have not released their green bond annual reports as of Nov. 1, 2021 are based on approximations.
2022 ESG Trends Report Buttons
There’s No Planet B: Financing Climate Adaptation footnotes
1 Lustgarten, Abrahm. “The Great Climate Migration.” New York Times, July 23, 2020.
2 “The Gathering Storm: Adapting to climate change in a post-pandemic world.” United Nations Environment Programme, Nov. 1, 2021.