Overview

African leaders have consistently emphasized the urgent need for increased action and financial support for climate adaptation. The Committee of African Heads of State and Government on Climate Change has repeatedly called for more funding for adaptation. Responses thus far include the Africa Adaptation Initiative, launched in 2015 to strengthen collaboration through high-level, pan-African and regional dialogue, large-scale climate adaptation action, and investments to address the adaptation finance gap. The African Development Bank and the Global Center on Adaptation have joined forces to develop the Africa Adaptation Acceleration Program; it has thus far mobilized $10 billion for investments in climate adaptation, benefiting over 63 million people across 37 African countries. In 2023, the Early Warnings for All Africa Action Plan was launched to save lives and livelihoods during and after extreme weather events.

Multilateral development banks (MDBs)—the World Bank and its regional counterparts--can and should do more to help African governments meet their climate objectives. Vulnerability to the climate is not felt evenly across the world, and countries’ capacities to manage extreme weather and climate events are highly unequal. Poor countries do not enjoy the same level of resilience afforded by paved roads, reliable power, buildings built to code, warning systems, emergency response, food security, cold storage, and other infrastructure enabled by decades of fossil fuel use in rich countries.

Adaptation through climate-resilient economic growth—including investments in infrastructure, social programs, climate-resilient seeds, fertilizer, and weather forecasting—is essential for all countries and especially for poor countries. Central to these investments is low-cost financing from the MDBs. In recent years, these organizations have increased investments in mitigating emissions. But adaptation remains under-funded relative to mitigation, especially in poor countries in sub-Saharan Africa.

Focusing on adaptation first and foremost is a way to help poor countries grow, generate more jobs, become resilient, and be able to adopt zero or low-carbon technologies. An overemphasis on mitigation, on the other hand, is not only unfair but also shortsighted. Poor countries have ambitious development agendas that they will carry out with alternative funding sources or partners if the multilateral banks do not step up. When they do, the rest of the world will have much less say on emissions. A better approach is to invest in adaptation that will result in jobs and economic development. Climate action requires popular support for policy adoption and implementation; policymakers will have little success a decade from now talking to a large unemployed youth labor force in Africa about “saving the planet.”

This working group is convened to explore how development banks–the largest providers of finance to poor countries–can more meaningfully support poor countries with adaptation and resilience. The intention of this work is to develop a framework for and examples of meaningful accounting of climate spending that is transparent, easy to understand, responsive to the circumstances of poor countries and that can be adopted by MDBs. This report aims to provide MDBs with concrete, practical, actionable advice on moving from concepts to meaningful practice of climate adaptation, with the understanding that poor countries will need resources not just to adapt to immediate climate and weather events but also more broadly to build resilience.

We consider the following questions:

• Why is climate adaptation important?
• What actions should MDBs take to address the need for adaptation finance?
• What kinds of investments are needed to build climate resilience?
• How do we measure success?

Our recommendations incorporate the individual views of working group members, as well as findings from a review of the literature on climate adaptation finance. In brief, we recommend that the MDBs:

• Internalize the case for financing adaptation as key to climate resilient development and inclusive and sustainable economic growth
• Rebalance portfolios to prioritize affordable finance for adaptation in LICs and LMICs
• Develop clear criteria for the selection of mitigation-related projects in low- and lower-middle-income countries
• Operationalize the 2015 Common Principles
  
• Prioritize investments that maximize development and adaptation synergies.
• Acknowledge the role of energy in adaptation
• Evaluate outcomes of adaptation portfolios