Adaptation vs. Mitigation of Climate Change: What Do Developing Countries Need?

Adaptation vs. Mitigation of Climate Change: What Do Developing Countries Need?
A sign for the COP29 United Nations Climate Change Conference in front of the cityscape in Baku, Azerbaijan, October 31, 2024 Photo by Aziz Karimov/Reuters Rafiq Dossani

he 29th annual United Nations Climate Change Conference, also known as the Conference of the Parties (COP29), convenes in Baku, Azerbaijan on Monday. It takes place in the shadow of severe climate change–related weather events: The flash floods that hit Spain in late October were the worst in the nation’s history and caused over 200 deaths. In Pakistan, for the third year running, record temperatures in the summer have been followed by extreme flooding in the monsoon season, killing thousands.

These disasters remind us that managing climate change is a dual task. It requires mitigation, or controlling greenhouse gas emissions. It also demands adaptation, or improving human resilience to such weather events. The frequency of extreme weather events has increased, caused by a failure to mitigate adequately; but it is the failure to adapt that is causing so much human suffering.

Both mitigation and adaptation are now gigantic and expensive tasks. The United Nations Environment Program estimates that keeping temperature change within the acceptable limit of 1.5°C will cost developing countries $2.4 trillion a year between 2025 and 2030. Of this, developing countries expect to raise $1.4 trillion a year from domestic sources. Hence, $1 trillion is the gap between their domestic resources and the need. Developed countries provided $300 billion to meet the gap in 2022, but that left 70 percent of the need unmet. Finance for mitigation is on an upward trajectory, however, and has doubled over the past two years.

Adaptation to meet the national plans of developing countries is estimated to cost less—just $300 billion year in 2025–30. But on this front the developing world faces a funding gap over its domestic resources of $200 billion a year. Adaptation finance for developing countries was estimated at $21 billion in 2021 (PDF), a shortfall of about 90 percent and has been stagnant since.

The benefits of adaptation are direct and yield high returns. Research published by the International Food Policy Research Institute in 2021 estimated that, in developing countries, every $1 billion spent on adaptation against coastal flooding leads to a $14 billion reduction in total damages. If $16 billion were invested annually in agriculture, that would prevent about 78 million people from starving or chronic hunger because of climate change impacts by 2050. The IFPRI report concludes that investing in adaptation in the agriculture sector can more than compensate for climate change effects on the number of hungry people in the world.

From a developing country viewpoint, then, the benefits of reducing vulnerability to climate change can be more important than avoiding future damages through reducing greenhouse gas emissions.

Adaptation is as urgent as mitigation. So why is climate finance for adaptation stagnant, even as funds for mitigation are rising sharply?

It should be noted that the recent rise of mitigation funding was preceded by several years of stagnant mitigation funding. The situation started to change after the Paris Agreement of COP21. The Paris Agreement required each country to determine its contribution to reducing emissions (termed Nationally Determined Contributions). Although most countries fell short of their targets in the subsequent decade, countries did take ownership of their NDCs. This has led them to use domestic policies to stimulate private investment in mitigation projects. Private investment accounted for about half of global equity finance for mitigation in 2019 and 2020.

The Paris Agreement also established a Global Goal on Adaptation, but it was not as definitive.

Adaptation projects, such as building seawalls to protect a population from rising sea levels, have attracted much less private interest. Only 2 percent of equity finance for adaptation funding came from the private sector in 2019 and 2020. Just as mitigation finance took time to mature, it may take some years and tweaking of domestic policy to bring in private money to adaptation projects.

Until that happens, can developed country governments lend a hand?

In principle, developed countries have accepted the responsibility to provide developing countries with climate funding for both mitigation and adaptation. There is, however, a difference in incentives. Funding mitigation to meet NDC targets in a developing country benefits the donor country (like all global public goods, the benefits are shared with all other countries). Funding a developing country’s adaptation benefits primarily the recipient country. Hence, politicians in developed countries may face demands from their constituents to favor international funding for mitigation over adaptation.

The rapidly growing list of climate-related disasters around the world should convince policymakers in developed countries that they must do more to help developing countries adapt, particularly if they hope to prevent mass starvation and migration. Past experience does not suggest cause for optimism, but perhaps the existential threat posed by climate change will be an ever more powerful motivation in the years ahead.

Rafiq Dossani is a senior economist at RAND and a professor of policy analysis at the Pardee RAND Graduate School. He works on Asian development and security, trade, and technology issues. – Published courtesy of RAND

Commentary gives RAND researchers a platform to convey insights based on their professional expertise and often on their peer-reviewed research and analysis.

 

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