GIF’s business is improving the lives of the world’s poorest people. This difficult task has been vastly complicated by the increasingly volatile, relentlessly changing climate.
Recent climate crises such as the horrendous drought in Madagascar, and global outbreaks of floods and wildfires, show us societies worldwide are not well-adapted to today’s climate shocks, let alone the more severe ones to come. Even under the most optimistic scenarios mitigating greenhouse gases, climate shocks and stresses are inexorably in train to worsen for many decades.
What can be done? A necessary first step is to boost finance for adaptation investment from the current, grossly inadequate level. Let’s put some numbers behind that: The Climate Policy Initiative reports an average of $46 billion per year in adaptation finance, of which only $1 billion is from private investment. This, against annual needs is roughly estimated at $140 billion to $300 billion by 2030.
Given the urgency and magnitude of the challenge, these funds need not only to be raised, but also deployed with maximum efficiency. There is one huge hurdle however: to pursue efficiency – to get the most resilience per dollar – we must be able to predict (and ultimately, measure) our success.
Coming up with a succinct and meaningful measure of adaptation and resilience success is a daunting task. Adaptation and resilience efforts take a dazzling variety of forms, from early-warning systems, to land use planning, to drought-resistant seeds, to mangrove conservation – to name just a few. The hoped-for outcomes of these are also diverse, to be reflected in institutional changes, social capital, livelihoods, and health. These outcomes may not be realised for many years, as today’s investments in preparation pay off in reduced vulnerability and greater adaptation to tomorrow’s storms and heatwaves.
What is the best way to prioritise scarce funds in the face of overwhelming need, and how should we measure success? Counting dollars spent is a good first step, but it doesn’t tell us anything about efficiency. Counting people benefitted is a good second step, but it doesn’t distinguish between people whose futures were transformed and those who received a more modest benefit. Looking only at today’s on-the-ground impacts fails to capture the long-term benefits of adjusting to sea level rise, changes in cropping suitability, or protection against rare but catastrophic storms.
The launch of GIF’s Innovating for Climate Resilience fund this week at COP26 marks the beginning of a new era for GIF, as we look to apply our world-class impact metric (Practical Impact) to innovations with the potential to scale and support the world’s poorest to build resilience and adaptation.
Our Practical Impact approach has much to offer the rapidly evolving effort to develop and apply metrics for investment in resilience and adaptation. We believe it will help investors to understand the full range of ancillary poverty reduction impacts from investments that are focused on climate resilience. And conversely, to begin to understand and enhance the resilience co-benefits of ‘standard’ poverty reduction investments.
Our in-house methodology takes both breadth and depth of impact into account, counting as impactful both enterprises that bring modest but valued health benefits to millions and those that save the lives of thousands. It is capable of comparing and aggregating impacts in livelihoods, health, education, and women’s agency. Because we support innovations that will typically take more than a decade to realise their full potential, we have developed a disciplined approach to forecasting long-term impacts. Crucially, we use and generate evidence of impact, so we can revise our forecasts over time, and ultimately verify and learn from actual results.
We recognise that that there is a great deal of ongoing effort in defining and applying adaptation and resilience metrics, for instance by the International Platform on Adaptation Metrics and under the Race to Resilience Metrics Framework. We look forward to engaging with our partners and their extended networks at the Adaptation Research Alliance, Global Resilience Partnership, and A&R Investors’ Collaborative, to exchange ideas on metrics and work together to promote more and more efficient investment in adaptation and resilience.