IDB Invest’s White Paper Calls for Rapid Rise in Climate Adaptation Financing

According to an IDB Invest study, financing for climate adaptation only represents 7% of all climate-related financing. Moreover, only about 50% of financial institutions in Latin America and the Caribbean provide green products and services, well below the 95% average for international banks. It is expected that the region needs up to 18.1 billion dollars more each year to respond to and prevent ongoing losses.

The document outlines opportunities for companies and investors to avoid future costs related to rebuilding infrastructure and reduced agricultural production resulting from natural disasters or climate change. It also features solutions ranging from climate-smart technologies and green infrastructure such as mangroves and coral restorations to new instruments, including resilience bonds that can increase climate finance.

Finally, the authors conclude that financing must be increased by several orders of magnitude, from both public and private actors, in order to avoid the worst impacts of climate change. Even tough international public support is crucial, the private sector finance could close current adaptation finance gaps by focusing on sectors such as agriculture, infrastructure, water, and disaster risk management.