The impact of climate change is no longer theoretical. We see it everywhere, often in the form of increasingly frequent and severe droughts, floods, fires, and heat waves. These events threaten systems vital for communities around the world, including those related to the economy, food and water security, infrastructure, and natural ecosystems. 

This is just the beginning. Even if we do manage to limit global temperature increase to 1.5℃, as outlined in the Paris Agreement, sea levels will still rise 0.48 meters by 2100, annual damage from flood losses will top $10 trillion, and total global economic output will be cut by 8%. In the event temperature increase is higher, the toll will be magnified. Regardless of which scenario plays out, the impact will be felt around the planet, in both the developed and developing world. The challenge, however, will be more daunting in developing countries, which will be among the hardest hit and have the fewest resources available to fund the required investments. 

Yet today, cities, regions, countries, and businesses are generally unprepared. Most countries, for example, have not yet crafted a national adaptation plan; similarly, many companies have not assessed their vulnerabilities or planned to adapt and build resilience.

Given the growing urgency, climate adaptation and resilience will be the subject of significant attention at COP27. And there are signs of progress. Some public sector leaders are tackling the thorny challenges surrounding adaptation—including the need to develop robust adaptation plans customized for local contexts and to overcome financing barriers. And some companies are moving beyond risk and regulatory requirements, scrutinizing their assets and value chains, identifying vulnerabilities, and taking action to build resilience. But we must accelerate our efforts, using the examples set by these leaders as inspiration. 

The Hurdles to Smart Adaptation Plans

Creating an adaptation plan that is both effective and implementable is challenging for a few reasons. First, understanding and addressing the impact of climate change is a complex task. Climate change risks—for example, floods, droughts, or fires —will be localized, varying across the cities, regions, and countries in question. In addition, those risks are interrelated, creating a complex, and hard-to-predict, dynamic. For example, rising ocean temperatures and changing ocean and wind conditions can increase storms and intensify cyclones—and that in turn will increase storm surges and extreme flooding events and damage natural coastal ecosystems.

This array of risks has varying impacts on people, economies, and ecosystems, including displacement of people from their homes, malnutrition, unemployment, disrupted value chains, and biodiversity loss. Similarly, potential solutions also have differing (sometimes conflicting) impacts. And given that solutions are often very expensive, decision-makers must come up with a plan that offers the optimal combination of potential solutions, maximizes limited resources, and manages the trade-off between impact and cost.

Second, there is a tremendous amount of data available on climate change and its impact, but it is typically difficult to create an objective fact base that identifies the biggest impacts on people, economies, and ecosystems and the best areas for action. This is made even more difficult in the public sector, where multiple agencies and ministries have some elements of ownership over adaptation and resilience, making it tough to bring data and initiatives together to design a cohesive plan.

Third, adaptation and resilience projects face capital constraints in both the public and private sector. They are typically not seen as bankable projects because, unlike many mitigation technologies or business models, they tend not to offer positive cash flows in the short term.