The Asia-Pacific is highly vulnerable to the intertwined physical and social impacts of climate change, and effective adaptation measures are a regional imperative. Such climate adaptation plans are predicated in part on external assistance that is actuated through financial mechanisms. What is less clear is how these mechanisms actually operate, what problems they foment and what pitfalls need to avoided in future policies. In the course of addressing these points, this NTS Insight warns of a potential ‘climate finance curse’ akin to the ‘aid curse’ described in broader development literature, and identifies pathways for avoiding such risks.
By J. Jackson Ewing and Gianna Gayle Amul
Introduction
This NTS Insight explores impediments to effective climate-adaptation financing in the Asia-Pacific. Countries, communities and various actors in the region face acute climate change challenges, and seek resources as part of efforts to adapt to climate vulnerabilities. This is consistent with the broader objectives of developing countries within the UN Framework Convention on Climate Change (UNFCCC) negotiations, which focus on garnering support from wealthier countries for adaptation and for transitioning to lower-emissions futures. Such externally funded adaptation finance is both needed and justified in the Asia-Pacific, as the region suffers the effects of emissions both past and present emanating from afar.
Needs and justifications notwithstanding, international climate finance is no panacea. To access climate funds, vulnerable states and sub-state actors may be put in a position to overemphasise vulnerability and focus unduly on climate change as the cause of a wide range of problems. Such actors may also be ill-prepared to deal with the adaptation resources that do arrive. These problems are compounded by the fact that accessing international climate finance requires skills and capacities that vary greatly among different players and involve convoluted institutional architectures.
This NTS Insight expands on these dynamics to warn of a potential ‘climate finance curse’ akin to the ‘aid curse’ described in broader development literature. To this end, it briefly reviews the climate vulnerabilities confronting the Asia-Pacific, unpacks international adaptation funding architectures and explores the risks of morally hazardous approaches to climate finance. It concludes with principles and solutions that could help enhance the effectiveness of regional adaptation projects.