Financing climate resilience through investment in water
By Tobias Schmitz
8 Nov 2022 by The Water Diplomat
On the 8th of November, the Asian Development Bank announced a U.S. $ 200 million goal to finance water resilience initiatives in the Asia Pacific region. This was announced at COP 27 in Egypt where during the first of ten thematic days of the Water Pavilion at COP 27, the World Resources Institute, the Asian Development Bank and the African Development Bank organised an event on financing climate resilience through investments in water. The event departed from the observation that water related investment can make a considerable contribution to both adaptation and mitigation efforts, as well as accelerate the transition to net zero emissions, strengthen resilience and achieve SDG 6. However, organisers observe, even though several studies have shown that the benefit of investing in resilience can outweigh the cost by a factor of four to one, investments in resilience are still lagging behind. The goal of the session was to help show the way forward, knowing that time is in short supply to respond adequately to the challenges of climate change.
With the impact of climate change likely to increase over the coming years, focusing on resilience in water resources management has become central to climate adaptation. ARe yoU Water Resilient, for instance, is a technical assistance programme to support developing member countries and other institutional entities in achieving resilience by analysing gaps, needs and opportunities, and building the capacity and mobilising the resources needed. The Asia Pacific Water Resilience Initiative
In the past 12 months the Asia Pacific region has witnessed many examples of climate change such as heat stress in India, and floods in Bangladesh and Pakistan. Permafrost is melting in the Hindu Kush mountains, which threatens the long-term water security of the region. Investing in resilience therefore is logical from a financial perspective, and resilience needs to be built into most investment decisions. Over the past year, the ADB increased its investment package in climate resilience from US $ 80 million to US $ 100 million, of which some two thirds are dedicated to mitigation measures while one third is dedicated to adaptation measures, and a large proportion of this amount will be invested in the water sector. The initiative is supported by the government of the Netherlands (US $ 20 million) and the Bill and Melinda Gates Foundatin (U.S. $ 10 million)Three key initiatives have been launched: first the ADB has recently established the Asia Pacific Water Resilience Hub, which will provide technical assistance to local water institutions to embed resilience into their programmes and operations. Secondly, the ADB has produced a guidance note on mainstreaming water resilience in the Asian Pacific region which will help equip staff and clients to operationalise resilience and adaptive capacity in the water sector. Third, the ADB seeks to mobilise $ 200 million in grant financing to mobilise and leverage $ 10 billion climate adaptation financing for the ADB’s water sector operations from 2023 to 2030. The initiative will be critical to achieving climate related goals and targets including those contained in the Sustainable Development Goals, the Paris Agreement, and the Sendai framework The action includes additional tools such as boosting gender mainstreaming, increasing private sector participation and investing in water entities.
Roger Voorhies, speaking on behalf of the Bill and Melinda Gates Foundation, mentioned that the foundation’s focus on sanitation in partnership with the ADB has only increased since climate impacts became evident such as safely managed sanitation systems that are now overflowing into natural watercourses, for instance in Uganda in calculating overall emissions the impact of sanitation on emissions had not yet been taken into account, but it was found that the emissions from water bodies into which untreated sewage was leaking, together with emissions from open pits and similar sources actually amounted to the same as the rest of the country’s overall emissions. Sanitation is therefore a huge issue both in terms of access and in terms of climate resilience. A partnership was initiated together with the ADB several years ago to look at investments in city wide inclusive sanitation. In the beginning only a small proportion of investment – less than 0,2%of investments – were going into safely managed, non-sewered sanitation. And currently, through the partnership, $ 1,5 billion is being invested in city wide inclusive sanitation, of which 400 million $ is being invested in non-sewered sanitation solutions. The latter are important because they have an impact in reducing water demand, in reducing the amount of wastewater produced, in reducing emissions, and they increase sanitation access for low-income population groups. The Asian experience in a very positive one in terms of leading people out of poverty, but with climate change there is an increased need to invest in resilience.