Research Component for the IDRC – CTI PFAN Adaptation Stream Scale-Up Programme (“Scale-Up Programme”)
Adaptation Projects happen (i) in a changing, and (ii) due to a changing risk environment. This change is driven by carbon emissions which can in general be attributed to different countries. Frequently, these emissions are used as a base for discussing transfer or compensation payments that are targeted to support adaptation and at the same time implement the polluter-pays-principle. However, such compensation is typically discussed at the government-level. Governments are then facing the challenge to what extent and how they should optimally use a mix of international and own national public funding to induce appropriate adaptation projects, which need to be undertaken by public – as well as private – actors, depending on the individual project.
The CTI Private Financing Advisory Network (CTI PFAN) seeks to identify projects with a climate adaptation component which have the capability to raise private sector financing. Selected projects are offered free professional advice on project development, developing the business model and will be connected with investors through CTI PFAN’s global investment networks.
The FS-UNEP Centre has been engaged by the CTI PFAN to examine the issue of adaptation scale-up, to build a more complete and practical understanding of the opportunities (and barriers) for private sector finance of adaptation. Research will be conducted which analyses the investment requirements and risk characteristics of climate adaptation related projects. The research component draws on the experiences of the CTI PFAN selected projects, raw data and project development experience to analyse the investment requirements and risk characteristics of adaptation related projects. The aim is to draw practical based research conclusions to feed into the policy dialogue for shaping an enabling environment for private sector finance, to build a more complete and practical understanding of the opportunities and barriers for private sector finance of adaptation and to feed back into the CTI PFAN methodology for adaptation related projects.
The Frankfurt School team will follow the CTI PFAN process carefully, attending meetings and workshops held with project developers and using real world project examples to answer a number of research questions, including climate adaptation project identification and evaluation; the risks associated with adaptation projects including typifying and identifying risk mitigation strategies; measuring the impacts of adaptation related projects; and policy recommendations.