Scaling private investment in adaptation: Case studies and recommendations for funders

Photo of rice fields in Cambodia

Exploring strategies to mobilise private investment for climate adaptation with two separate analyses, one on case studies from South East Asia, and one on global issues and recommendations for funders.

Climate change is already having significant impacts across the globe, from rising sea levels and increased frequency of extreme weather events to shifting agricultural patterns and biodiversity loss. In response, governments have been the primary financiers of climate adaptation efforts, using public resources to address these growing challenges. However, the scale of the problem is expanding rapidly, and public funding alone is insufficient to meet the increasing needs. 

Private investment is urgently needed to bridge the gap. Although there is growing interest in this area, private finance has yet to flow into adaptation at the scale needed. This hesitation is largely due to the diversity and complexity of adaptation solutions, making it harder to scale up compared to more straightforward investments, like those in renewable energy. 

To explore how private investment can be effectively mobilized for climate adaptation, we conducted two research projects for the UK Government. 

Study on private investment in adaptation in Southeast Asia

  • This study examined ten regional case studies that used adaptation solutions and financing instruments, including those from Vietnam, Cambodia, the Philippines, and Indonesia. 

  • The research explored the enabling factors that contributed to the success of these investments and analysed the opportunities and constraints for scaling and replicating them in the region. 

  • The findings showed that private finance can successfully invest in adaptation projects. However, they also highlighted the challenges involved, emphasising the need for proactive government action to develop markets and attract the necessary scale of finance. 

  • The report was authored by: Richard McNally; Shaswat Acharya; Phil Marker; Dwi Rahardiani.

Study on mainstreaming adaptation and scaling private investment

  • This study addressed global issues related to two key issues: 1] mainstreaming adaptation and resilience in financial decision-making and 2] scaling private investment in adaptation solutions. 

  • The research assessed current initiatives in these areas and provided nine recommendations for funders to support scaling private investment in adaptation. 

  • The study was authored by: Phil Marker; Edward Cameron; Rhea Cordeiro; Durre Mahmood; Richard McNally; Sanya Prakash.

These reports make a significant contribution to an area that has received insufficient attention. By addressing the bottlenecks to private investment in adaptation, lives and livelihoods can be saved, making this an urgent and essential priority. 

 

For more on our work in climate finance please contact Ed Humphrey @email or follow the links below:

 

Area of expertise

Climate, Energy, and Nature