Climate adaptation vs mitigation
Two sides of the same coin
The effects of extreme weather events around the world are affecting key dimensions of human life and business operations. We talk a lot about mitigation. However, the missing link on the road to carbon neutrality is adaptation. Adaptation is complementary to mitigation and just as essential.
According to recent estimates, the climate adaptation market could be worth USD 2 trillion per year within five years4. Adaptation initiatives only receive an estimated 5-7%5 of total climate-related investment. Investment comes mostly from the public sector while less than 2% of funds for adaptation4 come from private sources. Concentrated mainly in higher-income countries, adaptation costs/finance needs are 10–18 times higher than current flows.
According to the Global Commission on Adaptation6, every USD 1 invested in adaptation could result in up to USD 10 in net economic benefits.
What is the difference between mitigation and adaptation?
Imagine a boat with a leak in its hull2. To keep it from sinking you must address the main problem: plug the holes. In our case, that means mitigating the production of greenhouse gas (GHG) emissions, which are the source of the problem. But you also need to deal with the water that is already inside the hull and start bailing fairly quickly. In our example, this means adapting to the situation. To stay afloat and prevent damage to your boat, you need to tackle both issues simultaneously. Similarly, when addressing climate change, humanity must act on both fronts — mitigation and adaptation — at the same time.
Mitigation
- Reduces the flow of heat-trapping greenhouse gases into the atmosphere.
- The goal is to avoid significant human interference with the Earth's climate.3
- Mitigation is addressed globally.
- Strategies are designed on a long-term basis and are key to avoid tail risk scenarios with irreversible consequences.
Adaptation
- Anticipates adverse effects of climate change and take appropriate action.
- The goal is to reduce risks derived from the harmful effects of climate change. This has a positive side: making the most of any beneficial opportunities that may arise.
- Adaptation must be tackled at a local level, where each government is at the frontline.
- Short- and medium-term projects, as climate events are already happening, with the related risks and losses.
What can we do?
There are two key strategies that need to be implemented at both public and private level:
Mitigation
- Addressing the source of emissions
- Enhancing "sinks" that can trap GHG
- Establishing an international carbon price floor
Adaptation
- Building more resilient infrastructure
- Designing solutions to existing problems
- Reaping the benefits of the changes
Challenges and opportunities
Several factores explain the lack of investment:
- Upfront costs
- Local management
- Lack of balance for a Just Transition
- Climate change resistance
However, there is a significant wave of innovative solutions for adaptation that can make a difference while still being profitable now, such as: vertical farming, hydroponic farming, improved cooling and insulation systems, 3D printed and modular housing, technologies aimed at stemming the spread of wildfires, etc.
Conclusion
Adaptation success relies on increasing its urgency, leveraging innovation, and bringing up scale. It deserves greater business focus, as many opportunities require lower capital expenditures and may offer faster paybacks than many mitigation investments.
If investments in adaptation and mitigation are coordinated and managed in parallel, both adaptation and mitigation can drive resiliency, productivity and growth, and social and environmental benefits to our economies.
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