Scaling up climate adaptation finance in times of growing public debt, inflation and natural disasters

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The recent United Nations Intergovernmental Panel on Climate Change 6th Assessment Report presented evidence of growing economic and financial impacts of climate change. Adapting to climate physical risks requires massive, timely investments, and yet, adaptation finance is still lagging behind in both high-income countries and emerging market and developing economies.

The growth of public debts in response to the pandemic and rising inflation from the energy prices opened concerns about debt sustainability and sovereign spending capacity for adaptation. The International Monetary Fund (IMF) and World Bank Annual Meetings as well as the Group of 7 (G7) Summit highlighted the need to address debt sustainability while making public spending work for the climate. Nevertheless, a strategic framework for adaptation finance is still missing, and so are tailored adaptation finance instruments.

In this session, our expert panel will discuss the following:

• What are the challenges for scaling up private and public investments in adaptation (models, policies, instruments)?
• Under which conditions new financial instruments such as sovereign impact bonds could deliver on adaptation?
• How are main financial institutions such as the IMF and World Bank assessing climate risks for sovereigns and responding to them? Are they deploying the right approaches and tools?
• To what extent are private investors considering climate physical risks and adaptation in their portfolios and risk management?

Speakers:

• Marie Briere, Head of Investor Intelligence & Academic Partnerships, Amundi Institute; Senior Affiliate Researcher, Université Libre de Bruxelles
• Kevin P. Gallagher, Director, Boston University Global Development Policy Center
• Nicola Ranger, Head of Sustainable Finance Research for Development, Smith School of Enterprise and the Environment, University of Oxford
• Charlotte Gardes-Landolfini, Climate Change and Financial Stability Expert, IMF
• Fiona Stewart, Global Lead Insurance and Pensions, World Bank
• Chair: Irene Monasterolo, Professor of Climate Finance, EDHEC Business School and EDHEC-Risk Climate Impact Institute