Spotlight Cancún: Financing Coastal Adaptation

Janot Mendler de Suarez, Guest Blogger
Another in a series from the Triple Crisis Blog and the Real Climate Economics Blog on the Cancún Climate Summit.

One of the themes of Oceans Day at Cancún was climate financing on the frontlines– the 183 coastal countries, including 44 SIDS, ­already battling the escalating costs of the global climate crisis.

How do the numbers stack up against the Copenhagen price tags for adaptation in developing countries? The ‘Fast-start’ up to $30 billion/year by 2012 followed by $100 billion/year by 2020 looks a lot like the $70-100 billion/year estimate from the 2010 Economics of Adaptation to Climate Change Adaptation (EACC) report from the World Bank and UN– the most comprehensive study to date.

Starting with the 2007 UNFCCC estimate of $11 billion/year for coastal zone adaptation, a look at what is costed is more revealing when considering what is not costed. Coastal zone cost estimates focus on sea level rise (SLR) implications for hard infrastructure, are largely based on already obsolete 2007 IPCC report SLR projections, and fail to factor in compounding effects of storm surge damages and escalating storm intensity. Using a standard mark-up methodology may work for seawalls, but it masks or omits many areas of adaptation financing that appear to be missing: the relative costs of differential vulnerabilities among and within countries, multiplier effects across sectors, and layered adaptation costs for multiple types of land use or economic activity within the coastal zone.

Cost-benefit case studies suggest that the social and economic benefits of investing in integrated ecosystem-based coastal management (ICM/EBM) as an adaptation measure far outweigh the costs of addressing losses if buffering habitats are degraded or destroyed, fisheries collapse, coral reefs die and ecosystem functions fail under the added stresses of climate change. Shouldn’t UNFCCC financing and national adaptation financing policies prioritize restoring and sustaining the protective, productive, and climate-regulating functions of coastal and marine ecosystems?

Recent UNEP/ECLAC and Pacific Island Forum reports cite reversals in MDG progress as a climate change impact, yet social and environmental adaptation costings are fragmented– as are discrete sector estimates for MDG-related water, agriculture, health, and livelihoods adaptation, with ecosystem-based adaptation costs largely non-existent (including lost opportunity costs). Steep declines in global fisheries revenues are expected (up to 50%, equivalent to about $40 billion/year) due to overfishing, bad management and climate change. But it is very hard to sort out what is what. If about a billion people depend on fish as their sole source of protein, does increasing food imports count as adaptation when fisheries are collapsing? How can tourism– a vital source of income for coastal countries– adapt to beach erosion from SLR and coral reef destruction if ocean acidification is not curtailed…ASAP? The cost-effectiveness of adaptation investment in the restoration and protection of coastal and coral reef habitats that support fisheries, mariculture and biodiversity should be clearly reflected in adaptation financing policy to pre-empt irreplaceable losses.

How does the International Food Policy Research Institute estimate of $7 billion a year for agricultural adaptation in developing countries relate to the EACC calculation of $7 billion/yr just to bring child malnutrition down to levels projected without climate change? Agricultural declines in yield and nutritional quality due to changing temperature and rainfall are compounded by crop failure in some coastal areas due to increased salinity, with new evidence that major delta crops such as rice and wheat are seriously threatened by SLR. Meanwhile changes in climate affecting agriculture also contribute to creeping malaria, dengue, cholera, and other diseases. Given the differential vulnerability of the approximately half of humanity living on coasts and islands, is there a case for 50% of all adaptation financing that comes through the UNFCCC to be allocated to the coastal countries?

Insurance industry projections foresee climate change adding $65-70 billion to the global baseline for losses from catastrophic storms and other extreme events by 2100 (EACC). With flood index insurance successfully introduced in Jakarta, rainfall insurance for farmers in Malawi and Ethiopia, and a regional risk insurance pool in the Caribbean, shouldn’t opening access to hazard insurance for coastal countries and their populations be encouraged through fast-start financing?

Developing countries clearly cannot adapt without more financing than is allocated in the projections informing the Copenhagen and Cancún negotiations. Coastal countries, and especially SIDS, cannot afford to wait. Proactive policy and investment– whether from national budgets and the private sector, bilateral assistance or UNFCCC adaptation finance mechanisms– can avoid some escalation of future costs through risk reduction policy to jumpstart early action systems, open access to index insurance and regional climate risk pools, and by leveraging cost-effective investment in integrated coastal zone management measures and institutions to balance sectoral impacts in building resilience.

Janot Mendler de Suarez is a Working Group Leader for the Global Oceans Forum Working Group on Oceans, Climate & Security.