How the Googles, Microsofts, and Shells of the world could fund climate change adaptation
ClimateAi’s CEO, Himanshu Gupta, published an op-ed this week in The Hill called “A radical idea to fund climate adaptation globally.” Below is an excerpt calling for much-needed change:
As courts reckon with legal issues of responsibility for climate change, we need another force to step in and help with these issues: global capital markets. While companies are turning to markets to deal with renewable energy credits and carbon sequestration credits, they’re ignoring funding urgently needed climate adaptation — which they have contributed to the need for.
Gupta proposes a new market-based system that “gives companies the opportunity to privately fund climate adaptation measures, in order to recompense their historical emissions and the damage that these emissions have caused.” He explains:
An adaptation credits marketplace would function similarly to carbon marketplaces. One adaptation credit would be equivalent to a carbon credit valued at the social cost of carbon: $51/ton (the latest estimate from the Biden administration). Companies could buy credits for various projects; for example, a corn farmer in India, who would need to invest $10,000 for a 5-acre farm to reduce his vulnerability to climate impacts via investing in drip irrigation, drought-resistant seeds, etc., would need about 200 credits. Credits for hundreds of corn farmers could be pooled by the local co-operative and listed on the adaptation marketplace, where corporate buyers such as Microsoft, Shell, and others can participate. Shell as an example contributed nearly 32 billion tons of carbon dioxide equivalent of emissions between 1750 and 2018 — it could buy up to 32 million adaptation credits globally, helping fund a plethora of projects (the actual number may vary depending on the number of carbon offsets bought by Shell already). This would unlock up to $1.6 billion into adaptation funding from Shell alone for adaptation in developing economies.
Who could participate, and why would they?
A climate adaptation credits marketplace would be a tangible way for companies to make amends for historic emissions in the communities they have most affected, even if those are across the world from headquarters. The Googles of the world could provide funding for drought-resistant seeds for the drought-ridden smallholder farmers in the Horn of Africa; the Microsofts of the world could finance coastal restoration measures in Pacific Island nations facing sea-level rise.
The gravity of the situation cannot be understated, Gupta continues:
We are in the middle of the most serious food crisis since World War II, accelerated by climate change. We need global efforts at the same scale to ensure just, resilient adaptation and recovery because by the time you finished this [op-ed], nearly 500 more people would have become food insecure. We urgently need to accelerate climate solutions, especially in the adaptation space. This new system is exactly the kind of bold action that the world needs.