Definition
Funding that supports communities, businesses, and governments in preparing for climate risks by investing in climate-resilient infrastructure, early warning systems, disaster preparedness, and nature-based solutions that also contribute to emissions reduction.
Why It Matters
- Increasingly severe climate events (e.g., floods, hurricanes) require significant financial investment in resilience.
- Helps vulnerable cities, industries, and communities manage climate risks while promoting low-carbon solutions.
- Reduces long-term economic losses by preventing climate-related damage and avoiding the emissions associated with post-disaster reconstruction.
Sources of Adaptation Finance
- Bilateral and National Initiatives: Government-led programs supporting regional and national climate resilience efforts with an emphasis on sustainable infrastructure.
- Private Sector: Business investments such as climate insurance, green bonds, and corporate sustainability initiatives that contribute to adaptation while reducing carbon footprints.
Example: Vietnam's Dong Nai River Implemented a Payment for EnvironmentalServices (PES) Program
- The Dong Nai River, a vital water source for Ho Chi Minh City, faces severe pollution due to agricultural runoff, industrial and domestic wastewater, fish farms, and deforestation.
- WWF aims to tackle pollution in the water reservoir through a community-based adaptation strategy.
- The project seeks to establish a payment scheme where water supply companies compensate upstream polluters to adopt sustainable practices, with funds used for land-use improvements and forest protection.
Read more: Payments for environmental services in Vietnam
Further Reading
