Study: Global Climate Adaptation Costs Will Be Far Higher than UN Estimates

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When the G20 ministers gather in Pittsburgh next month, one of their missions is to come up with a plan to pay for climate change adaptation in developing countries. They’ll now be doing that without a clear picture of how much it will cost.

The UN climate change secretariat’s 2007 estimates for the global cost of adaptation measures have been widely used as benchmarks in discussions, but a new study finds those numbers are way off.

The UNFCCC estimated global adaptation costs at between $40 billion and $170 billion a year through 2030, but it didn’t take the full range of impacts into account, say researchers from the International Institute for Environment and Development and Grantham Institute for Climate Change at Imperial College London.

"Just looking in depth at the sectors the UNFCCC did study, we estimate adaptation costs to be two-three times higher, and when you include the sectors the UNFCCC left out, the true cost is probably much greater," said author Martin Parry, a researcher at Grantham Institute and former co-chair of the IPCC working group on adaptation.

For example, the UNFCCC’s disease assessment of $5 billion only took into account malaria, diarrhea diseases and malnutrition in low- to middle-income countries, but that’s likely to be less than half the actual impact when other diseases and high-income countries are considered, the new study says.

When it looked at flood adaptation, estimated to cost $11 billion, it didn’t consider the costs of shifting water from areas with surplus water to areas with deficits. And its anticipated costs to coastal areas due to storms surges and sea level rise, $11 billion, are also off by about a factor of three because they are based on outdated information, the study found.

The UNFCCC didn’t consider some other costs at all, such as energy, loss of tourism and manufacturing, and the need to protect ecosystems, the study says. That was partly due to a lack of strong information for making estimates. The new study suggests ecosystem protection alone could cost more than $350 billion a year.

Debates over adaptation funding have already opened a chasm between developed and developing nations as they work toward an international agreement at the talks in Copenhagen, now just 100 days away.

India and China have argued that adaptation funding has to be available before developing countries agree to other actions. Earlier this week, African leaders recommended the African Union demand $67 billion a year from developed countries for adaptation and mitigation.

So far, developed nations have yet to agree on a specific plan. Draft documents for the Pittsburgh meetings that were obtained by ClimateWire don’t suggest a specific amount either.

UN climate chief Yvo de Boer told Reuters earlier this month that the international climate talks in Copenhagen this December should offer some upfront amount, such as $10 billion, but that the key will be creating a fair mechanism for raising long-term funds, not establishing a specific number.

"A robust burden-sharing formula is the most important thing," de Boer said.

An OECD publication released last year also suggested that nations look beyond a specific number to focus on the economic and policy instruments that could motive adaptation efforts, such as insurance and risk sharing, environmental markets and pricing, and public-private partnerships.

One draft document for the Pittsburgh meeting says the bulk of international finance is likely to come from the public sector though such options as the national budget, auctioning pollution allowances, taxes on fuels, and taxes on offsets, similar to the Adaptation Fund, funded with 2 percent of offset proceeds under the Clean Development Mechanism.

Another draft suggests the creation of a new body to co-ordinate current and future climate funding and to verify it use. Some of the current funding sources include the Global Environment Facility, Least Developed Country Fund, Special Climate fund, Adaptation Fund, Multilateral Development Banks, World Bank Climate Investment Funds, UN Agencies and regional groups.

Pam Berry, a researcher at Oxford’s Climate Change Institute and an author of the new report, says that the lack of a solid figure should not hurt the chances of an international agreement “if the issue is portrayed in the right way.”

“The important thing of the UNFCCC report and our review is that they show that the figures involved are large and likely to increase and that there is a need to action now. In some senses an exact figure is not necessary,” she said.

The authors of the new study stress that that more research is needed to determine what can and should be done. One problem is the absence of case studies to test the UNFCCC analyses, they say. "The few national figures available tend to suggest costs in excess of the UNFCCC estimates."

"It’s a phenomenal amount of money," de Boer says, "but how much of that money is needed at the end of the day is to a large extent dependent on how ambitious the climate change response is."


See also:

Bonn Talks Produce Ideas for Financing Climate Adaptation but No Agreements

Public Financing or Offsets? How Best to Fund Clean Tech for Developing Nations

Beyond Bonn: America Must Get Its Own House in Order, Say Green Groups

(Photo: Greenpeace placed ice sculptures of 100 children at the Temple of Earth in Beijing today symbolizing the disappearing future of the more than 1 billion Asians threatened with water shortages by the changing climate. By Shiho Fukada/Greenpeace)

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