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Nowhere Left to Hide: Driving Climate Action at Scale

November 27, 2023   Suvranil Majumdar and Kiran Pawar

Climate change is well underway, even if we succeed in cutting emissions or achieving the 1.5°C goal. While mitigation is necessary, the longer we put off adaptation, the more vulnerable we leave our people, ecosystems and planet. Just in the last decade, extreme weather events have wiped out 2% of the global economy, or ~2.4 trillion USD. 1 in 2 people already live in areas where demand for water is greater than sustainable supplies. Without rapid, inclusive action towards development and climate adaptation, 100 million people around the world will be forced into extreme poverty. And all this at only 1.1°C above pre-industrial temperatures.

Yet, climate adaptation efforts are not being carried out fast enough or at the scale required. Developing countries need 5-10 times more than the current international adaptation finance flows, whereas investments into adaptation and resilience stand at less than 10% of the total climate finance. This gap in finance cascades down to a lack of innovation, implementation and governance. Several mutually reinforcing factors are responsible- poor policy and institutional environment, weak track record of investments or adaptation data to make informed decisions, high upfront costs including costs of local context-specific strategic planning and implementation, and mismatch with expectations of private financiers.

Significant gains await, but the window for action is closing. It is estimated that every 1 USD invested in resilient infrastructure in LMICs can yield 4x in net benefits. To realize these gains and prevent losses, immediate action is paramount.

GDI is committed to focusing on the issue of climate adaptation, especially critical in Asia and Africa, while also contributing to necessary mitigation action.

Our work is grounded in four key principles: 

  1. Build ‘Just Resilience’: As with mitigation, adaptation can lead to unjust outcomes. Just Resilience efforts aim to not redistribute vulnerability, place a disproportionate burden of adaptation action on the affected, or come at the cost of the socio-economic growth of developing countries.
  2. Leave no one behind: While climate adaptation is a global responsibility, effective solutions carefully consider the needs of local communities where they are implemented. Additionally, localization is a core principle in the evolution of GDI’s incubation model, especially in how it intends to source and build a pipeline of climate-related initiatives, especially in Asia and Africa.
  3. Apply a ‘whole system’ approach: It is crucial that we do not treat climate adaptation as only a narrow technical problem, but address the drivers and underlying systems that cause climate vulnerability. This means exploring interlinkages with other sectors and value chains, global supply chains, regulation and governance, and finance – to bring about structural shifts that drive catalytic results in a just manner. This approach unlocks long-term solutions and maximizes the co-benefits of climate action.
  4. Make diverse forms of capital work: Pure public or development finance is simply not enough. Moreover, inaction will also put most businesses at risk. We must enable different forms of capital to participate in climate action, by also addressing the risks that prevent different types of finance from crowding in.

Our portfolio of climate related initiatives underline these principles.

  1. Resilient Water Accelerator: The climate crisis is a water security crisis; 90% of natural disasters are water-related. Still, only 3% of global climate finance goes to water, and only 9% of investment into water assets/services is private. At the same time, the private sector is showing a growing interest in the sector, provided there is a clear understanding of both the value and risk of water. 

    The Resilient Water Accelerator is a new initiative designed to increase the flow of private and public finance into water projects that help the most climate-vulnerable communities build resilience to climate change. We bring relevant decision makers, technical experts and investors together to create deal pipelines for interventions that address water risk, strengthen resilience and attract domestic or international private investment.  

  2.  Circularity: The transition to a circular, green and just economy needs a more coordinated approach by linking value chains, upstream and downstream actors, and funders/financiers. The waste management sector in developing economies like India and Kenya is a key opportunity sector for achieving this goal, but it currently sees a lack of sufficient, efficient and coordinated financial and non-financial support for stakeholders across the value chain. 

    Partnering with the IKEA Foundation, GDI is currently exploring the feasibility of building a fund (financial support) and platform (non-financial support) for supporting promising waste enterprises/initiatives across the value chain in both the formal and informal waste sectors. This effort seeks to bring together funders and other enablers to more efficiently support circular and socially inclusive waste management systems.

  3. Emerging Opportunities: Recently exited, GDI has incubated climate-related initiatives such as Emergent, work we would like to continue to build upon. Looking forward, we are exploring exciting opportunities around nature-based solutions, sustainable bamboo development, climate-smart agriculture, lead acid pollution, and climate-health.

Through a multi-stakeholder driven approach, GDI has set out to make the big bets needed to truly tackle climate change in a holistic way. To learn more about our climate work or collaborate on promising ideas, reach out to us – we would love to have a chat.