The Value of a Swale: Reclaiming Adaptation
Private sector-led climate adaptation is a fool’s errand—especially in the Global South. Here’s what we should do instead.
It is a contentious time in the world of global climate finance. In June, the Bonn climate talks, a multilateral part of the IPCC process, ended in a stalemate. Developing countries pushed to centre discussions on compensation for loss and damage caused by the actions of wealthy large emitters in the Global North. The US and EU, on the other side, refused to agree on language surrounding historical responsibilities and compensation, fearful that it would open the door to reparations.
The rancorous outcome to Bonn set the tone for COP 27 in Egypt later this month, where climate adaptation finance will continue to anchor the agenda. According to the Working Group II’s report for the IPCC sixth assessment report, only a tiny fraction of overall global climate financing has been earmarked for adaptation, and this small proportion has come from predominantly public sources. A World Bank 2021 report estimates that in 2017-18 private sector contribution to adaptation finance was a meagre 1.6% of the total. While global financing for climate action is on the uptick, it is widely agreed that it is presently a fraction of what is required.
Policy discourse on adaptation finance, however, focuses excessively on attracting private capital investment, now being termed “green finance” and using phrasing such as “unlock”, “tap” and “mobilize” to describe silver bullet technological solutions. Green finance takes the form of instruments like green bonds and green insurance or investment into projects that are perceived to have a positive impact, now popularly known as ESG investing. Outside of academic discourse and diplomatic negotiations, however, the shortfalls of relying on private sector finance are often overlooked. Private investors have their own expectations for receiving an adequate return on investments, which often conflict with on-the-ground needs. As a conservation researcher working for an NGO in southern India who is actively involved in fundraising, it is both fascinating and frustrating to see each of these global trends replicate themselves across various levels.
One of the major issues with private sector adaptation finance is geographical bias. The 2021 World Bank report found that most adaptation-related investment went to higher income countries, with Canada and United Arab Emirates being the highest. In 2013, India made Corporate Social Responsibility (CSR) a mandatory requirement for large firms, and it now forms a significant part of their development efforts. The allocation of CSR funds, however, is heavily skewed across regions and sectors. According to the National CSR portal, in the 2020-21 financial year, Maharashtra, Karnataka and Andhra Pradesh (21.3 % of India’s population) received over INR 100 crores (12.6 million USD) for environmental conservation, while 23 other state governments (representing close to 40% of India’s population) have received less than INR 20 crores (2.5 million USD).
Within my home state of Tamil Nadu, the capital city, Chennai, received INR 9 crores (1.12 million USD), while 22 other districts received less than a crore. Two districts, Tirunelveli and Theni, where I work and have been trying to raise funds for projects for over a year with limited success, received INR 0.27 crore (33,818.90 USD) and nothing respectively. Of course, Chennai is much larger by population, but Tirunelveli and Theni are a part of the Western Ghats, a global biodiversity hotspot. As Tamil Nadu rapidly urbanizes, it risks unplanned growth and declining ecological resilience, underscoring why adaptation has to be undertaken with an eye on the future.
Private sector funding is also lopsided by sector. The World Bank 2021 report estimates that 70% of global private sector adaptation investment went to water and wastewater management projects, followed by 17% for energy infrastructure. While water is a critical sector for investment, most wastewater projects look at introducing grey infrastructure instead of treating at source and nature-based solutions. The skew towards water also means less investment into health, education, disaster risk management and other social sector spending, such as social security and livelihoods for people working in protected area frontlines.
With most private sector investments, the emphasis is on shorter turnaround times with assured and visible results that can be quantified into neat metrics. This trend, while harmful overall, is particularly dangerous for ecological restoration projects. It gives rise to short-sighted projects leading to overwhelming preference for ineffective schemes such as massive tree planting. An extension of these frenzied afforestation projects is the now much-criticized carbon credit schemes, which range from poorly conceived and executed projects to outright greenwashing. In India ecologists frequently raise alarm against the indiscriminate planting of invasive, exotic trees, and afforestation in critical ecosystems such as grasslands and deserts. In my home city of Chennai, where the current popular and ill-suited trend is planting Miyawaki forests, one of the proponents justified them in an interview as “the impact is almost immediately visible, desirable for CSR goals” which gets “corporates excited”.
The UNFCCC tenets of adaptation finance are threefold: accessibility, adequacy and predictability. Academic researchers have gone many steps further to qualify the validity of adaptation finance; ten criteria–adequacy, predictability, sustainability, scalability, novelty, accessibility, distributive fairness, equity, participatory, and transparency–must be met. Predictability and sustainability clash with the precarity associated with private funding. A private sector source may simply decide that their focus area for the financial year has changed, and pull out of projects on a whim. This possibility keeps the beneficiaries of adaptation finance in a perpetual state of precarity. One such financier of my organization abruptly changed their priority from livelihoods to electric vehicles, causing us to scramble for alternative sources of funding.
The issues associated with private sector finance puts greater emphasis on the role of the state in ensuring climate justice. The state’s role in climate action cannot be substituted by the private sector. Specifically, it cannot be substituted by requiring private companies to report more details about their activities. Even as calls for mandatory carbon disclosures and sustainability reporting by companies increase, reporting rollouts are being accompanied by an increase in regulatory rollbacks to protected areas. The Protected Area Downgrading, Downsizing, & Degazettement (PADDD) tracker estimates over 77% of these rollbacks have been enacted since 2000. In India, the increased emphasis on ESG investment comes at a time when regulatory laws are being diluted and protected areas being denotified—in short, the neoliberalization of environmental governance.
The Tamil Nadu government recently announced an ambitious Climate Change Mission – rehabilitation of coastal habitats, implementation of ‘climate smart’ villages and carbon enrichment programmes. It also launched the Tamilnadu Green Climate Company, an SPV for climate mitigation and adaptation, increasing green cover, and to map and restore wetlands. While we await the results of these new initiatives, the government has also been actively involved in awareness campaigns to use cloth bags as an alternative to plastics, introducing and promoting it as a brand Meendum Manjappai. The intent is great, but the central government, with all its sweeping legal, regulatory, enforcement powers and the powers vested in it by the citizens through elections, need not perform roles which civil society organizations with their limited staff and funding can achieve—especially not in a developing country where the majority already recycle and reuse bags. The recently released Draft Climate Action Plan for Chennai, for example, is less than 50 pages and mentions no details of financing, except for a single line – “to identify and advocate” funding opportunities “including carbon credit mechanisms”, with no further details on what these mechanisms would look like in a city saturated for afforestation.
The government should instead focus on funding research, identifying gaps in adaptation funding by geography and plugging them. It should prioritize climate adaptation action for the most vulnerable, who risk losing their livelihoods and being displaced by extreme weather events such as the floods in Bengaluru and Pakistan. It should avoid the trap of technocratic driven fixes and the myth of private sector management efficiency, especially in a country where millions depend on the state for welfare schemes.
In February, we drove up the hills of the Western Ghats for a project, across lush tea estates and forest patches. On the way, the landscape is dotted with small villages composed of tenements constructed for the estate workers. The only familiar presence is the Indian government’s post offices and Tamil Nadu government’s transport buses. India, through its Constitutional amendments in the early 1990s, has a local body of self-governance in each district, rural and urban. In addition to these bodies, there are legally mandated local Biodiversity Management Committees (BMCs) which chronicle local biodiversity and govern issues such as natural resource rights. However, most of these institutions exist mostly on paper and are not empowered with training or adequate finances to govern. These groups are not by nature of constitution left-wing; However, they are already present and comprise valid legal entities. For the Indian left, the best way forward to enable a ground-up movement would be to engage them, committing resources to build them up as vehicles of collective action.
In the midst of a climate emergency, there needs to be a sense of urgency for mobilizing concrete action and not for visually appealing results. Meanwhile, in my home city Chennai with the highest funds being poured in, some wetlands catch fire and some others choke with fly ash. The clock keeps turning, and it is more of the same.
Anjana Vencatesan is a researcher with Care Earth Trust, a Chennai-based biodiversity and conservation organization. She tweets @anajna_.