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13、ATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 Foreword A significant increase in investment in climate change adaptation is needed to build resilience to the current and future impacts of climate change.There is a strong economic case for doing so,particularly given that investments in adaptation ca

14、n deliver multiple benefits.For example,green roofs can reduce energy costs,reduce stormwater runoff and contribute to biodiversity.Similarly,integrating climate-resilience into infrastructure design can reduce maintenance costs and increase reliability,while also reducing losses if an extreme event

15、 occurs.Governments have a key role in unlocking this potential by putting in place a policy framework that provides the right signals to encourage investment in adaptation.Achieving this will require enhanced coherence and coordination between all parts of government.Climate adaptation is usually t

16、he responsibility of environment ministries,but critical policies for influencing investment in adaptation are the responsibility of finance and other sectoral ministries.Improving coordination and addressing policy misalignments and gaps can encourage investment in adaptation.The Climate Adaptation

17、 Investment Framework has been developed to assist governments in creating a conducive policy enabling environment for investment in adaptation.It has been developed as a collaboration between the OECDS Environment Policy and Investment Committees.Building on the OECDs Policy Framework for Investmen

18、t(PFI)and FDI Qualities Policy Toolkit,it identifies six key policy areas(“building blocks”)for increasing investment in climate change adaptation.These policy areas include strategic planning,public finance and investment and support for private investment.Each building block includes examples of i

19、nternational good practice,diagnostic questions and links to further resources.This Framework is non-prescriptive and flexible,reflecting the context-specific nature of climate impacts and differences between countries priorities,financial resources and capacities,including the specific challenges f

20、aced by developing countries.Rather than setting out a fixed agenda for reform,it provides policy makers with a set of questions to ask about the policy environment as part of the process of setting priorities and identifying potential areas for reform.It can be used for self-evaluation by countries

21、,as part of peer-review processes or as a basis for dialogue between the public and private sectors.4 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 Acknowledgements This report is a joint output from the OECDs Directorate for Financial and Enterprise Affairs and the Environment Directorate.It co

22、ntributes to the work programmes of the Environment Policy Committee(EPOC)and the Investment Committee(IC).It was co-authored by Michael Mullan and Iris Mantovani,with valuable contributions from Konstantin Blondeau.This work was undertaken under the guidance of Robert Youngman and Yuval Laster(Envi

23、ronment Directorate)and Martin Wermelinger and Ana Novik(Directorate for Financial and Enterprise Affairs).It was prepared for publication by Elvira Berrueta-Imaz.The authors would like to thank the following OECD colleagues for their valuable advice and suggestions on previous drafts of this report

24、.Mikaela Rambali,Simon Touboul,Sophie Lavaud,Geraldine Ang,Valentina Belessi,Leigh Wolfrom,Mamiko Yokoi-Arai,Sophia Gnych,Wiebke Bartz-Zuccala,Emilia Stazi,Kerstin Schopohl,Emma Raiteri and Ada Ignaciuk.The OECD Environment Policy Committee(EPOC)and Investment Committee(IC)were responsible for overs

25、ight of this report.The Working Party on Finance and Investment for Environmental Goals(WPFIEG),the Working Party on Climate Change(WPCC)and the FDI Qualities Policy Network provided valuable feedback on previous drafts,alongside the Informal Expert Group that was established to support this project

26、.The Framework has benefitted from the comments and suggestions of:Arghya Sinha Roy(Asian Development Bank),Vladimir Stenek(IFC),Jia Li and Chloe Desjonqueres(World Bank),Paul Smith and Gary Power(UNEP-FI),Craig Davies(Cadlas),Kit England(PWA Associates),Raffaele Della Croce(Imperial)and Jennifer Do

27、herty(IADB).This report has benefitted from the financial support of Environment and Climate Change Canada and the United States,as well as from the governments of the Netherlands and Switzerland through their support to the FDI Qualities Implementation Roadmap.5 CLIMATE ADAPTATION INVESTMENT FRAMEW

28、ORK OECD 2024 Table of contents Foreword 3 Acknowledgements 4 Abbreviations and acronyms 7 Executive Summary 9 1 Introduction 11 Opportunities for investment to reduce the costs of climate impacts 13 Building on OECD standards and tools for sustainable investment 15 Applying the Climate Adaptation I

29、nvestment Framework 16 References 18 Notes 19 2 Framing investment in adaptation 20 Investment opportunities to address physical climate risk 21 Awareness and understanding of physical climate risks 23 Distinctive characteristics of adaptation investments 23 Roles of the public sector 25 Private sec

30、tor investment 26 Linking finance and funding to unlock investment 28 References 30 Notes 32 3 The Climate Adaptation Investment Framework 33 Strategic planning and policy coherence 36 Regulatory alignment to reflect the benefits of climate resilience 41 Insurance and risk transfer 47 Public finance

31、 and investment 52 Sustainable finance 55 Support and incentives for private investment 61 References 69 Notes 76 4 Towards increased investment in adaptation 77 References 79 6 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 FIGURES Figure 1.1.OECD standards and tools for sustainable investment 1

32、5 Figure 2.1.IPCC Framework for Understanding Climate Risk 22 Figure 2.2.Illustrative list of finance sources,mechanisms and adaptation investments 29 Figure 3.1.Stylised model of how mainstreaming climate resilience can affect project cashflow 58 TABLES Table 1.1.Key sectors for investment in adapt

33、ation 13 Table 2.1.Examples of climate-related hazards 22 Table 3.1.Components of CAIF and guiding questions for policymakers 34 Table 3.2.Types of de-risking instruments 63 Table 3.3.Measures to support adaptation innovation 65 BOXES Box 1.1.Defining adaptation investments 12 Box 1.2.Gender,social

34、inclusion and climate change adaptation 17 Box 2.1.Project and corporate finance:implications for investment in adaptation 27 Box 2.2.Aligning project characteristics with the requirements of financing sources 29 Box 3.1.Case studies:strategic planning and policy coherence 40 Box 3.2.Responsible Bus

35、iness Conduct and investment in climate change adaptation 43 Box 3.3.Case studies:regulatory alignment to reflect the benefits of climate resilience 46 Box 3.4 Insurance and the enabling environment for investments in adaptation 49 Box 3.5.Case studies:Insurance and risk transfer 51 Box 3.6.Case stu

36、dies:mainstreaming into public finance and investment 54 Box 3.7.Integration of climate resilience and project cashflow 58 Box 3.8.Case studies:sustainable finance 59 Box 3.9.Case studies:support for private investment 68 7 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 Abbreviations and acronyms

37、 ADB Asian Development Bank AI Artificial Intelligence ARIC Adaptation and Resilience Investors Collaborative BII British International Investment BIS Bank for International Settlement C3S Copernicus Climate Change Service CAIF Climate Adaptation Investment Framework CAIP Climate Adaptation Investme

38、nt Planning CBI Climate Bonds Initiative CCC The United Kingdoms Climate Change Committee CFMCA Coalition of Finance Ministers for Climate Action CO-WY Colorado-Wyoming CPI Climate Policy Initiative DNP Department of National Planning EBRD European Bank for Reconstruction and Development ECB Europea

39、n Central Bank EIB European Investment Bank EMDEs Emerging markets and developing economies FAO Food and Agriculture Organization.FDI Foreign Direct Investment FMO FMO Netherlands Development Finance Company FONERWA Rwanda Green Fund GCEW Global Commission on the Economics of Water GCF Green Climate

40、 Fund GCOS Global Climate Observing System GEF Global Environment Facility GEO Group on Earth Observation GFT Green Finance Taxonomy GIF Global Infrastructure Facility GIZ German Agency for International Cooperation(Deutsche Gesellschaft fr Internationale Zusammenarbeit)Gov4Res Governance for Resili

41、ent Development in the Pacific programme GSSS Green,social,sustainability and sustainability-linked bonds 8 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 I4CE Institute for Climate Economics IBRD International Bank for Reconstruction and Development IDB Inter-American Development Bank IFC Intern

42、ational Finance Corporation IFRS International Financial Reporting Standards IPAs Investment promotion agencies IPCC Intergovernmental Panel on Climate Change IRA Inflation Reduction Act IsDB Islamic Development Bank ISO International Organization for Standardization ISSB International Sustainabilit

43、y Standards Board JICA Japan International Cooperation Agency MAFF Japans Ministry of Agriculture,Food and Fisheries MAR Mesoamerican Reef NAPs National Adaptation Plans NCA Natural Capital Accounting NCQG New Quantified Collective Goal NDCs Nationally Determined Contributions NFIP National Flood In

44、surance Program NOAA National Oceanic and Atmospheric Administration NWFE Nexus of Water,Food and Energy Programme OECD Organisation for Economic Co-operation and Development PFI Policy Framework for Investment PIDG Private Infrastructure Development Group PPFs Project preparation facilities PPPs Pu

45、blic-Private Partnerships SLBs Sustainability-linked bonds SME Small or Medium-sized Enterprise TCFD Task Force on Climate Related Financial Disclosures UNDP United Nations Development Programme UNDRR United Nations International Strategy for Disaster Reduction UNEP FI United Nations Environment Pro

46、gramme Finance Initiative UNFCCC United Nations Framework Convention on Climate Change WEF World Economic Forum WMO World Meteorological Organization WRI World Resources Institute WRMU Water Resources Management Unit 9 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 Executive Summary The Climate A

47、daptation Investment Framework(CAIF)aims to support governments efforts to unlock investment in adaptation to build resilience to climate change.Building upon the foundation of the OECDs Policy Framework for Investment and the Foreign Direct Investment(FDI)Qualities Policy Toolkit,it identifies the

48、key domestic policies that are particularly relevant for enabling climate change adaptation investment.The scope of the CAIF includes both public and private investment,given that both sources will be critical for climate adaptation.The physical impacts of climate change are already being felt,with

49、record-setting extreme heatwaves,droughts and wildfire.Losses from weather and climate-related disasters were USD 281 billion in that year,and mostly uninsured.Climate-related losses are projected to increase due to climate change,with extreme events become increasingly frequent and severe and slow-

50、onset changes becoming increasingly evident.As the severity of these hazards increase,there is the risk of abrupt re-pricing and stranding of assets.A disorderly transition to growing physical climate risks would have grave socio-economic consequences,including on employment,health,productivity and

51、public finances.Increased public and private investment will be needed in activities that help to reduce harms or realise any potential opportunities due to the impacts of climate change(“adaptation investments”),such as the development of climate-resilient infrastructure,food systems and supply cha

52、ins.Adaptation investments are economically and socially worthwhile.The benefits will be context specific,but there is a large volume of economically worthwhile investment opportunities:one study identified USD 1.8 trillion of adaptation investments,with benefit-cost ratios ranging from 2:1 to 10:1.

53、Despite this potential,investments are not yet occurring at scale,with recorded finance flows in the tens of billions of dollars and estimated needs in the hundreds of billions of dollars.This Framework identifies the domestic policies that can help to realise this potential,while recognising the im

54、portance of other areas of the enabling environment including capacity and domestic financial resources,particularly for developing countries.As such,it is intended to complement existing initiatives to strengthen capacity and increase developing countries access to finance.This Framework identifies

55、 the policies that are required to ensure that the benefits of enhanced resilience to climate change are visible and reflected in the allocation of public and private resources.In doing so,it aims to remove barriers to investment in adaptation by proposing a comprehensive approach to address market

56、failures,correct misaligned policies and provide incentives for investments that deliver wider social benefits.International cooperation will be essential for supporting action in developing countries.Strategic planning processes,including the development of National Adaptation Plans(NAPs)and Nation

57、ally Determined Contributions(NDCs),provide a key entry point for unlocking investment in adaptation.These processes have already made progress in identifying climate risks and mainstreaming into policy development,but there remain significant challenges in translating planning into action on the gr

58、ound.This Framework has been designed to help governments and partners identify potential gaps in the policy enabling environment and identify the resources and good practices that can help to address 10 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 those gaps.It is non-prescriptive and flexible

59、,reflecting the context-specific nature of climate impacts and differences between countries priorities,financial resources and capacities.It can be used for self-evaluation by countries,as part of peer-review processes or as an input into dialogues between the public and private sectors.The Framewo

60、rk is arranged around six building blocks,identifying key policy areas for supporting investment in adaptation and addressing the following areas of good practice:Building block Key policy recommendations and good practices Strategic planning and policy coherence Set clear objectives,metrics and tar

61、gets in national adaptation planning documents.Ensure close engagement in planning by central planning and sectoral ministries.Assess economic consequences of climate change and needs for finance.Clarify responsibilities for managing climate-related risks.Translate adaptation priorities into a robus

62、t financing strategy,such as an adaptation investment plan.Support the provision of reliable data on climate risks,for example through online climate data platforms.Track progress in mobilising investment for adaptation.Regulatory alignment Ensure that the regulatory framework for investment is tran

63、sparent,predictable,and fair.Reform distorting subsidies for agriculture.Examine requirements for business continuity and health and safety.Provide regulatory incentives for climate-resilient infrastructure.Strengthen incentives for enhancing the natural environment and ecosystems.Ensure water alloc

64、ation regimes reward efficient use while meeting equity objectives.Update technical codes and standards to ensure that they are suitable for the impacts of climate change.Ensure that economic regulation of infrastructure networks is conducive to investment in adaptation.Insurance and risk transfer E

65、nsure that the policy framework for insurance is conducive to investment in risk reduction through pricing,terms and conditions.Explore opportunities to encourage resilient recovery following extreme events through regulation or subsidies.Support the uptake of insurance for climate-related risks,inc

66、luding through the deployment of innovative approaches such as parametric insurance.Public finance and investment Ensure that the benefits of climate resilience are integrated into budgetary processes and project appraisals.Implement public procurement policies that account for benefits over the lif

67、ecycle of the investment.Ensure that climate risks are clearly identified and managed when undertaking public-private partnerships(PPPs).Implement a strategy for managing the financial consequences to the public sector of climate extremes.Sustainable finance Support the uptake of financial instrumen

68、ts for investment in adaptation by examining regulatory frameworks and,where appropriate,through issuance of these instruments by the public sector.Support the uptake of credible and consistent standards,labels and taxonomies for identifying adaptation investments,whether through regulatory or volun

69、tary approaches.Examine financial regulation and supervision to ensure that physical climate risks are appropriately considered within the financial sector.Support and incentives for private investment Consider the development of targeted incentives for private investments in adaptation that deliver

70、 social benefits.Expand support for project development for adaptation investments,for example through project preparation facilities.Examine the intellectual property framework to identify any potential barriers to investment in adaptation innovation.Enhance support for innovation related to climat

71、e adaptation,such as technology centres,business incubators and applied research centres.11 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 This chapter provides the context for the Climate Adaptation Investment Framework.It outlines investment needs and opportunities for climate adaptation,provid

72、es key definitions and explains how this Framework links to the Policy Framework for Investment(PFI)and FDI Qualities policy toolkit.It also outlines how this Framework can be integrated into adaptation planning processes.1 Introduction 12 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 The Climat

73、e Adaptation Investment Framework(CAIF)identifies the policies that can enable increased public and private investment1 in activities that help to build resilience to the current and future climate(Box 1.1).The CAIF builds on the OECDs Policy Framework for Investment(PFI)and FDI Qualities Policy Too

74、lkit,while incorporating insights from other relevant initiatives including the High-level Approach to Enhance and Better Integrate OECD Work on Infrastructure.It does not prejudge the outcomes of international processes in relation to climate change,investment or related topics.This chapter provide

75、s the rationale for developing the CAIF,outlines the links with OECD standards on sustainable investment,and explains how governments can use the CAIF to enhance resilience to climate change.Box 1.1.Defining adaptation investments This Framework adopts an inclusive definition of adaptation investmen

76、ts,encompassing all investments that help to build resilience to the impacts of climate change.This definition focusses on the expected impact of the investment,rather than how it is labelled or the intention behind the activities being undertaken.Building on the approach of Mullan and Ranger(20221)

77、,adaptation investments should meet the following three criteria:Resilience benefits:the investment should increase resilience to climate change,by directly reducing physical climate risks or by supporting adaptation by others.Do No Significant Harm:the investment does not negatively affect the resi

78、lience of other people or ecosystems,for example by increasing the risks faced by neighbouring communities.Compatible with adaptation plans:the investment should be compatible with national or local strategies,such as National Adaptation Plans,Nationally Determined Contributions or National Disaster

79、 Reduction Strategies.If such plans do not exist,or do not set objectives in relation to the investment,the presumption is that an investment is compatible.These criteria aim to ensure that the investment is likely to have a positive impact on adaptation and reduce the risk that the measure is ineff

80、ective or counterproductive(i.e.the risk of maladaptation).A major challenge in defining and measuring adaptation investments is that adaptation is not a well-defined set of activities,as it depends upon the context in which the investment takes place.Addressing climate change may be only one of sev

81、eral motivations for undertaking an activity.For example,the activity could be an office refurbishment,with one element of this being the installation of mechanical ventilation to increase thermal comfort during hotter summers.The decision maker may not even view these components as being driven by

82、climate adaptation but rather an effort to reduce exposure to risks or take advantage of any localised opportunities arising from a changing climate.These investments will be context specific and vary in terms of scale,and location.As such,proxies and estimation may have to be used to understand the

83、 extent to which investment flows are consistent with climate resilience objectives(Noels et al.,20242)The concept of adaptation is closely linked to the concept of resilience,which is the“capacity of interconnected social,economic and ecological systems to cope with a hazardous event,trend or distu

84、rbance,responding or reorganizing in ways that maintain their essential function,identity and structure”(IPCC,20223).For the purposes of this report,climate adaptation is the process that is intended to lead to the outcome of improved resilience to the impacts of climate change.13 CLIMATE ADAPTATION

85、 INVESTMENT FRAMEWORK OECD 2024 Opportunities for investment to reduce the costs of climate impacts Climate change is giving rise to a diverse range of increasingly severe hazards,including heatwaves,wildfires and storms(see Table 1.1).Proactive investments in adaptation such as risk-reducing infras

86、tructure,climate-resilient infrastructure and improved agricultural practices can save lives,avoid losses and contribute to economic growth.Investment needs are context specific,but a growing body of literature provides an indication of the overall scale and distribution of investment needs.Plausibl

87、e estimates of annual investment needs for adaptation are in the hundreds of billions of dollars per year for developing countries(UNEP,20234).Table 1.1.Key sectors for investment in adaptation Sector Climate-related hazards Examples of potential investments Cross-sector All Climate analytics and fo

88、recasting All Early-warning Systems All Capacity building and training Agriculture,food and fisheries Storms,floods,drought New crop varieties Heatwaves Cooling for livestock Drought Drip irrigation Buildings Drought,floods,heatwaves Natural water retention solutions(e.g.green roofs)Heatwaves Retrof

89、itting for thermal comfort Sea-level rise,wildfires Relocation of exposed assets Business and industry Floods Property-level flood barriers Heatwaves Energy efficient cooling All Drones and in-field sensors,smart supply chains Infrastructure(energy,transport,communications)Storms,heatwaves Distribut

90、ed energy generation Heatwaves Installing heat-tolerant surfaces All Retrofitting,smart monitoring Natural environment and ecosystems Ocean acidification,increased ocean temperature Coral reef restoration Sea-level rise,storms Mangrove restoration All Corridors to increase ecosystem connectivity Wat

91、er and flood management Drought,floods Construction of new reservoirs Floods,sea-level rise Flood defences(including Nature-based Solutions)Drought Replacing pipes to reduce leaks Source:Adapted and extended from BII&FMO(20245)There is a growing body of research on potential investment needs for ada

92、ptation.The UNEP Adaptation Gap 2023 report consolidated and updated sectoral estimates of adaptation needs for developing countries,arriving at a total of USD 130-415 billion per year until the 2030s,with a central estimate of USD 240 billion per year(equivalent to 0.6%of developing countries GDP).

93、The main constituents of this total were investments in flood protection,coastal protection and infrastructure,while the modelling also showed significant needs for agriculture and social protection(UNEP,20234).A separate approach,based on aggregating the needs expressed in developing countries Nati

94、onally Determined Contributions found that the main priorities identified were for water,infrastructure and agriculture(UNFCCC,20226).There are,however,still significant evidence gaps and inherent methodological challenges(OECD,20157),which mean that these estimates should be viewed as indicative.Th

95、ere are currently no comprehensive estimates of investment needs for adaptation in OECD countries,but some indications are available from national and supranational studies.For example,in France,one study identified annual investment needs by the public sector of EUR 2.3 billion per year,including m

96、easures to address overheating in buildings,improve the climate resilience of infrastructure,manage 14 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 wildfires and improve water management(I4CE,20228).An analysis for the UK estimated that addressing the 61 main risks identified in the 3rd Climate

97、 Change Risk Assessment could require annual investment(both public and private)in the region of GBP 5 billion per year(EUR 5.8 billion)(Watkiss,20229).The available quantitative evidence suggests that large investment needs are likely to arise across agriculture,infrastructure,flood management,wate

98、r management and buildings.These investments include nature-based solutions.Cross-sectoral interventions to provide early warnings,improve access to climate data and build capacity are critical for managing climate risk,even if smaller in quantitative terms.Significant public and private investment

99、will be required,but the share will vary by country context and specific investment(see chapter 2).There is very limited quantitative data on business and industry and in relation to the natural environment and ecosystems(UNEP,20234).However,given that these sectors will be sensitive to the climate

100、and are economically significant,it is likely that they will be important for investment in adaptation.An overview of the key sectors,the potential hazards they are exposed to,and examples of potential investments are provided below in Table 1.1.Climate change impacts are interconnected,and the acti

101、ons needed to manage a risk may lie in other sectors.For example,reducing the risk of excess mortality from heat may require investments to improve the thermal performance of buildings(including hospitals)and improved infrastructure to reduce the risk of power cuts during heatwaves.Improved early wa

102、rning systems can be used to put in place preventative measures before a heatwave occurs,as is used by Frances heatwave plan(Agence Rgionale de Sant,202410).As such,the table above focusses on the sectors where investments are expected to occur,while recognising that these will give rise to wider so

103、cial and economic benefits.These estimates of likely investment needs are significantly in excess of recorded finance flows.Climate finance provided and mobilised by developed countries for adaptation in developing countries reached USD 32.4 bn in 2022 (OECD,202411).The most comprehensive estimates

104、currently available have identified an annual average of USD 63 billion of finance for adaptation in 2021/22,albeit with significant gaps in coverage(CPI,202312).Even allowing for underreporting of adaptation-relevant finance from some sources,there is an urgent need to scale-up investment in adapta

105、tion to become commensurate with the challenge posed by climate change.Addressing the adaptation investment gap will require concerted efforts to mobilise finance flows from all sources public and private,domestic and international for increased investment in adaptation.This has been recognised by A

106、rticle 2.1c of the Paris Agreement,which call for“making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development”.Previous OECD analysis has analysed how to scale-up climate finance as a key resource to support adaptation in developing countries

107、(OECD,202313).For all countries,efforts are needed to strengthen the policy enabling environment for investment in adaptation(Mullan and Ranger,20221).The need to increase investment in adaptation is taking place against a challenging macroeconomic context(OECD,202314).In many countries,high levels

108、of public debt,high inflation and low near-term prospects for economic growth are putting pressure on public finances.Many developing countries have limited fiscal space for investments in adaptation.These broader trends are also pushing up the cost of capital,creating challenges for private investm

109、ent.These trends are exacerbating the challenges to investment in adaptation(Chapter 2).In this context,this Framework is intended to support a strategic,targeted and evidence-based approach for mobilising finance from all sources for investment in adaptation.This approach reflects the common elemen

110、ts of good practice based on international experience,with the application of those principles being tailored to different country circumstances.15 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 Building on OECD standards and tools for sustainable investment The OECD has been a partner for many e

111、conomies across all continents to share its expertise in reforming investment frameworks.The insights and policy lessons from decades-long efforts to improve the investment climate have been distilled into a set of tools and standards that policy makers can use to enhance the attractiveness of their

112、 economies as sustainable investment destinations(Figure 1.1).Figure 1.1.OECD standards and tools for sustainable investment Source:OECD(2015);OECD(2022)The OECD Policy Framework for Investment(PFI)is a comprehensive and systematic tool for improving investment conditions(OECD,201515).It is neither

113、prescriptive nor binding and provides a list of key questions to guide governments through investment climate reform.The PFI takes into consideration 12 policy areas that are widely recognised as underpinning a healthy environment for all investors,from small and medium-sized firms to multinational

114、enterprises.The three principles that apply throughout the framework are policy coherence,transparency in policy formulation and implementation,and regular evaluation of the impact of existing and proposed policies.The PFI has been used by almost 40 countries at varying levels of economic developmen

115、t and across all continents,as a tool for assessing investment and business climates,and for designing reforms to improve them.In addition,the PFI serves as a reference point for investment promotion agencies,businesses,trade unions,donors as they assist recipient country partners,and non-government

116、al organisations in their dialogue with governments.The more recent FDI Qualities initiative complements the PFI with insights and policy recommendations to ensure that FDI contributes to the Sustainable Development Goals(SDGs)in host economies,by creating quality jobs,enhancing innovation capacity,

117、advancing gender equality,and supporting decarbonisation(OECD,202216).While the PFI addresses investment for green growth in broad terms,the FDI Qualities tools explicitly seek to help government shape policies and institutional arrangements to improve the contribution of FDI to climate change mitig

118、ation.Neither the PFI nor the FDI Qualities tools address the specific challenges and opportunities associated with adaptation investments.2 The CAIF builds on the foundation of the PFI and FDI Qualities toolkit,taking these as the foundation of an effective policy enabling environment for investmen

119、t in adaptation.The CAIF applies a similar diagnostic approach,offering guiding questions to help governments identify areas that are likely to be important for mobilising adaptation investments.However,the design of the CAIF has been tailored to reflect the characteristics of climate adaptation.In

120、particular,the scope includes public investment,given that this is critical for adaptation.OECD Recommendation on the Policy Framework for Investment(2015)Comprehensive and systematic approach for investment climate reforms.Covers 12 policy dimensions.Emphasises the principles of rule of law,transpa

121、rency,non-discrimination and protection of property rights.OECD Recommendation on FDI Qualities for Sustainable Investment(2022)Commitment to whole-of-government approach to using policy and institutions to increase sustainable FDI and deliver on the 2030 SDGs.First government-backed standard to hel

122、p policymakers finance the SDGs and fulfill commitments made in the Paris Agreement.16 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 Underpinning elements for an enabling environment for investment The PFI outlines a set of horizontal pre-requisites for creating an enabling policy environment fo

123、r investments,which apply also to climate adaptation investments.These factors help maintain a predictable and transparent investment environment,engage relevant stakeholders in the policy making process and reduce the costs of doing business:Fairness and trust.High levels of trust can facilitate co

124、mpliance with laws and regulations,strengthen investor confidence and reduce risk aversion.Underlying trust is the expectation that public officials respect high standards of integrity,and effectively address issues around conflict of interest,corruption and fraud.This is particularly relevant in hi

125、gh-risk areas like public procurement,which is a major source of finance for adaptation investments.Whole-of-government and inter-agency coordination.As with investment in general,adaptation investment is an issue requiring policy responses that do not fit neatly within any single governmental depar

126、tment or agency.Good government requires integrating cross-disciplinary perspectives into policy,improving coordination,and facilitating resource sharing across government institutions.In particular,coordination mechanisms are needed to ensure that centre-of-government financial and planning institu

127、tions have ownership of adaptation investment needs.Transparency and engagement.More open and inclusive policy-making processes help to ensure that policies will better match the needs and expectations of citizens and businesses.Greater participation of stakeholders in policy design and implementati

128、on leads to better targeted and more effective policies.Regular consultation of the private sector can help create shared understanding of the likely impacts of climate change,identify priority investment needs and support a discussion about how these can be financed.International cooperation on sta

129、ndards can complement and even reinforce domestic efforts to improve the business climate.The more standards are harmonised or mutually recognised across countries,the more easily will firms be able to invest and trade internationally.This applies also to sustainable finance taxonomies and other pri

130、nciples and approaches for climate adaptation alignment.Applying the Climate Adaptation Investment Framework The Climate Adaptation Investment Framework aims to enable a pragmatic diagnosis of the policy gaps and opportunities for increasing investment in adaptation,covering enabling environment iss

131、ues such as data availability,public funding,planning processes and key regulatory issues.It is structured around six building blocks,covering the policy areas that are particularly relevant for enabling investment in climate adaptation.The value added of the CAIF is in bringing together the differe

132、nt policy strands that are relevant for adaptation.The aim is not to break new ground in individual policy areas but to tie them together to ensure policy coherence.It does not provide ready-made reform agendas but rather helps to improve the effectiveness of any reforms that are ultimately undertak

133、en.This Framework is intended to provide a non-prescriptive approach to strengthening the enabling environment.It can be used in various ways and for various purposes by different constituencies,including for self-evaluation and reform design by governments and for peer reviews in regional or multil

134、ateral discussions.Users of the Framework are invited to go through each of the building blocks and use the provided guiding questions to identify potential gaps and areas for improvement.Each building block contains an explanation of the relevance of the questions,illustrated with examples of inter

135、national good practice.The building blocks also include links to resources that provide further guidance on how to address any gaps that have been identified through the guiding questions.17 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 Integration into adaptation planning processes National pla

136、nning processes for adaptation(such as National Adaptation Plans and the development of Nationally Determined Contributions)provide a key entry-point for the use of the Climate Adaptation Investment Framework(CAIF).These processes are intended to develop a coherent policy response to understand and

137、manage the risks from climate change,reflecting also diverse needs and circumstances(Box 1.2).The CAIF can be used as an input into the development of these processes by identifying potential gaps and facilitating discussions about potential policy responses.Several countries have started to impleme

138、nt dedicated adaptation investment planning processes to complement their national adaptation planning processes.These can take different forms,but the overall aim to translate national and sectoral priorities into a pipeline of investable projects through a structured process of identifying adaptat

139、ion needs,prioritising investments in climate change adaptation and developing a robust financing strategy to meet those investment needs(ADB,202317).In doing so,these processes aim to help translate planning into implementation.The CAIF identifies the elements of the enabling environment that can c

140、ontribute to the successful implementation of investment planning processes,while being flexible with respect to the process being undertaken.Box 1.2.Gender,social inclusion and climate change adaptation Climate change will affect different groups in different ways.Vulnerability and adaptive capacit

141、y is influenced by characteristics such as level of wealth,age and gender.Those can also be factors increasing the exposure to the climate hazards and threats.In the 6th Assessment Report on Impacts,Adaptation and Vulnerability,the IPCC recognises that“within populations,the poor,women,children,the

142、elderly and indigenous peoples have been particularly vulnerable due to a combination of factors,including the gendered division of paid and/or unpaid work(high confidence)”(IPCC,202218).For example,FAO analysed data from 24 countries to measure the impact of climate on vulnerable rural populations.

143、The results highlight the need to tackle inequalities,noting that“female-headed households suffer average annual income losses of 8%due to heat stress and 3%due to flooding,compared to male-headed households”(FAO,202419).In order to address these issues,governments can address those issues by conduc

144、ting gender and social inclusion analyses in relevant sectors.Integration of gender mainstreaming in public policies,and gender responsive approaches in National Adaptation Plan processes to help identify context specific gender and climate change linkages,and provided recommendations.For example,in

145、 2019,following its NAP commitment to gender-responsive actions,Suriname developed a Water Sector Adaptation Strategy(SASAP),which includes a gender-responsive approach.This strategy has highlighted the role of women in national water governance at all levels and gender issues in the water resources

146、 sector(NAP Global Network,202220)Source:IPCC(202218);FAO(202419);NAP Global Network(202220).18 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 References ADB(2023),Climate Adaptation Investment Planning,https:/www.adb.org/publications/climate-adaptation-investment-planning-brochure.17 Agence Rgio

147、nale de Sant(2024),Plan canicule,https:/www.iledefrance.ars.sante.fr/mise-en-oeuvre-et-suivi-du-plan-canicule-en-ile-de-france.10 BII&FMO(2024),Climate Investment Playbook,https:/assets.bii.co.uk/wp-content/uploads/2024/06/27090623/Climate-Investment-Playbook.pdf(accessed on 28 June 2024).5 CPI(2023

148、),Global Landscape of Climate Finance 2023,Climate Policy Initiative,https:/www.climatepolicyinitiative.org/wp-content/uploads/2023/11/Global-Landscape-of-Climate-Finance-2023.pdf(accessed on 29 April 2024).12 FAO(2024),The unjust climate:Measuring the impact of climate change on rural,poor,women an

149、d youth,FAO,https:/doi.org/10.4060/cc9680en.19 I4CE(2022),“ENSURING SUFFICIENT MEANS TO ADAPT TO CLIMATE CHANGE CONSEQUENCES IN FRANCE:WHAT ARE THE COSTS?”,https:/www.i4ce.org/en/publication/ensuring-sufficient-adapt-climate-change-consequences-france-costs/(accessed on 5 July 2024).8 IPCC(2022),Cli

150、mate Change 2022:Impacts,Adaptation and Vulnerability,Cambridge University Press,Cambridge,UK and New York,USA.18 IPCC(2022),“Summary for Policymakers”,in Prtner,H.et al.(eds.),Climate Change 2022:Impacts,Adaptation,and Vulnerability.Contribution of Working Group II to the Sixth Assessment Report of

151、 the Intergovernmental Panel on Climate Change,Cambridge University Press,Cambridge,UK.3 Mullan,M.and N.Ranger(2022),“Climate-resilient finance and investment:Framing paper”,OECD Environment Working Papers,No.196,OECD Publishing,Paris,https:/doi.org/10.1787/223ad3b9-en.1 NAP Global Network(2022),Gen

152、der-responsive National Adaptation Plan(NAP)processes:Progress and promising examples,International Institute for Sustainable Development,https:/napglobalnetwork.org/resource/gender-responsive-nap-processes-progress-promising-examples/.20 Noels,J.et al.(2024),“Towards assessing the alignment of fina

153、nce with climate resilience goals:Exploring options,methodologies,data,and metrics”,OECD,No.251,OECD,Paris.2 OECD(2024),Climate Finance Provided and Mobilised by Developed Countries in 2013-2022,Climate Finance and the USD 100 Billion Goal,OECD Publishing,Paris,https:/doi.org/10.1787/19150727-en.11

154、OECD(2023),OECD Economic Outlook,Volume 2023 Issue 2,OECD Publishing,Paris,https:/doi.org/10.1787/7a5f73ce-en.14 19 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 OECD(2023),Scaling Up Adaptation Finance in Developing Countries:Challenges and Opportunities for International Providers,Green Financ

155、e and Investment,OECD Publishing,Paris,https:/doi.org/10.1787/b0878862-en.13 OECD(2022),FDI Qualities Policy Toolkit,OECD Publishing,Paris,https:/doi.org/10.1787/7ba74100-en.16 OECD(2015),Climate Change Risks and Adaptation:Linking Policy and Economics,OECD Publishing,Paris,https:/doi.org/10.1787/97

156、89264234611-en.7 OECD(2015),Policy Framework for Investment,2015 Edition,OECD Publishing,Paris,https:/doi.org/10.1787/9789264208667-en.15 UNEP(2023),Adaptation Gap Report 2023,https:/www.unep.org/resources/adaptation-gap-report-2023(accessed on 30 April 2024).4 UNFCCC(2022),“Efforts of developing co

157、untries in assessing and meeting the cost of adaptation:Lessons learned and good practices Draft synthesis report by the Adaptation Committee in the context of the recognition of adaptation efforts of developing countries”.6 Watkiss,P.(2022),The Costs of Adaptation,and the Economic Costs and Benefit

158、s of Adaptation in the UK,https:/www.theccc.org.uk/publication/the-costs-of-adaptation-and-the-economic-costs-and-benefits-of-adaptation-in-the-uk-paul-watkiss/(accessed on 6 August 2024).9 Notes 1 Investment in this context refers to the acquisition of assets that are intended to produce goods or s

159、ervices,such as residential and commercial property,infrastructure,machinery and research&development(Gross Fixed Capital Formation).This definition excludes financial claims on real assets(such as equities or loans).2 The CAIF is part of the activities undertaken to expand the FDI Qualities Policy

160、Toolkit under the FDI Qualities Implementation Roadmap,2022-2027.20 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 This chapter explores the links between investment and climate change adaptation.It outlines how climate risks can affect investment returns,and how investments can be used to reduce

161、 physical climate risks.This chapter provides the foundation for the Framework by analysing the specific characteristics of investments in adaptation and how these characteristics relate to public and private investment.2 Framing investment in adaptation 21 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OE

162、CD 2024 The impacts of climate change are already being experienced,with changes in the frequency and severity of extreme events(such as heatwaves),as well as slow-onset changes(such as rising sea-levels and drought).In 2023,global average temperatures reached 1.45C above the 18501900 average(WMO,20

163、241).These impacts are projected to become more severe as the concentration of atmospheric greenhouse gasses increases.All sectors and regions will be affected,albeit with particularly severe consequences in developing countries due to their greater vulnerability.Urgent action is needed to address t

164、he source of these impacts by reducing emission of greenhouse gasses(climate mitigation),but also to increase resilience to the impacts of a changing climate(climate adaptation).Investment has a critical role in tackling the impacts of climate change:it is critical for achieving the transition to ne

165、t zero,which is the subject of complementary guidance(OECD,20152),as well as building resilience to the impacts of a changing climate.New investments will be required to address climate risks,while climate change will affect the risks and returns of current and future investments across all sectors

166、of the economy.This chapter provides further context for the Framework by exploring the links between investment and climate change adaptation,including the relationship with physical climate risks and the respective roles of the public and private sectors.Investment opportunities to address physica

167、l climate risk There is a two-way relationship between investment and physical climate risk1:these risks may affect the returns on investments,and investments can be used to reduce physical climate risks(OECD,20243).The Intergovernmental Panel on Climate Change(IPCC)s Sixth Assessment Report defines

168、 risk as the potential for adverse consequences to people or ecosystems(Figure 2.1).In the context of climate impacts,these risks(such as damage to property)arise from the interaction of hazard,vulnerability and exposure.The following definitions are adapted from(IPCC,20224):Hazard:the potential occ

169、urrence of an event or trend that may cause negative impacts.For example,a heatwave is a hazard(see Table 2.1).Exposure:the presence of people or assets in places or settings exposed to a hazard.For example,the number of people living in the area exposed to a heatwave.Vulnerability:the propensity or

170、 predisposition to be adversely affected.For example,older people can be particularly vulnerable to the impacts of heatwaves.Climate change is leading to an increase in hazards,but the consequences of this increase in hazard depends upon exposure and vulnerability.The trends in exposure and vulnerab

171、ility are the cumulative result of choices made by decision-makers in the public and private sectors.For example,provision of flood defences can reduce the vulnerability of a region to flood risk(investment helping to reduce physical climate risk).Meanwhile,coastal real estate may be increasingly ex

172、posed to flood risk due to rising sea levels(investment returns being affected by physical climate risk).Efforts to reduce exposure and vulnerability will be critical to reduce the economic and social costs of climate change.A diverse set of actions will be required to reduce and manage physical cli

173、mate risks by adapting to climate change.Potential responses include capacity building,reforms to planning or management,new or improved infrastructure,provision of information and changes in practice and behaviour(Biagini et al.,20145).The appropriate actions will depend upon the context,and often

174、a combination of actions will be required to manage a given risk.22 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 Figure 2.1.IPCC Framework for Understanding Climate Risk Source:IPCC AR5 Table 2.1.Examples of climate-related hazards Temperature-related Wind-related Water-related Solid mass-relat

175、ed Chronic Changing temperature Changing wind patterns Changing precipitation patterns Coastal erosion Heat stress Increased hydrological variability Soil degradation Temperature variability Ocean acidification Soil erosion Melting permafrost Saline intrusion,sea-level rise,water stress Gradual move

176、ment of soil down slopes(solifluction)Acute Heat wave Cyclone,hurricanes,typhoon Drought Avalanche Frost/cold wave Storm Heavy precipitation Landslide Wildfire Tornado Flood Subsidence Glacial lake outburst Investment will be critical for implementing some of these adaptation actions.In a general se

177、nse,investment supports economic development,which helps to reduce vulnerability to climate impacts.Physical climate risk-informed investment decisions can reduce the exposure of assets to climate hazards,for example by redirecting development away from floodplains.Investment can be used to build ad

178、aptive capacity(such as training or data collection),reduce vulnerability by directly aiming to deliver adaptation actions(such as additional water storage capacity)or through the integration of adaptation actions into projects undertaken for other reasons(such as property-level flood resilience mea

179、sures in a new housing development).The desire to reduce risks and/or to realise potential opportunities provides a driver for adaptation investment.For example,farmers may change to a different crop that is more suitable for drier climates.Ski resorts may invest in facilities for summer tourism or

180、expand access to higher altitudes in response to less reliable snowfall.Climate-related risks also create new opportunities for those supplying the goods and services that help others to address those risks through the provision of adaptation solutions,such as 23 CLIMATE ADAPTATION INVESTMENT FRAMEW

181、ORK OECD 2024 water-efficient industrial processes or technologies for precision agriculture that increase the efficiency of production.Investments in adaptation can generally reduce exposure to physical climate risks,but it is neither possible nor desirable to completely eliminate these risks(OECD,

182、20146).Managing the risk of mild flooding may be addressed by simple property-level measures,while severe flooding could require major structural changes.The degree of investment in adaptation that is motivated by a physical climate risk is therefore determined both by the characteristics of the ris

183、k,the costs and benefits of available adaptation options and the amount of residual risk that the decision-maker is willing to accept.The Sendai Framework for Disaster Risk Reduction highlights that each state has the responsibility to prevent and reduce disaster risk.Awareness and understanding of

184、physical climate risks There are significant gaps in understanding physical climate risks and hence opportunities for investment in adaptation.In general,there are good data on potential climate hazards,albeit with significant gaps in coverage in developing countries.However,investors may not be ful

185、ly aware of the vulnerability of their investments to climate risks(Noels et al.,20247).This is particularly true of situations where climate change leads to the emergence of new risks,such as wildfires in areas that were not previously exposed,or to qualitative changes in existing risks(OECD,20238)

186、.In addition to data gaps in the understanding of the impacts of climate hazards,there are several factors that may lead investors to underestimate their risk exposure,and hence the incentive to invest to reduce those risks:Uncertainties and non-linear responses:the climate is a complex system and p

187、rojections of future climate hazards are subject to multiple sources of uncertainty,particularly at the local scale(van Bree and van der Sluijs,20149).As such,decision-makers need to consider outcomes under a range of potential scenarios,rather than just the most likely outcome.Interdependencies:cli

188、mate risks may arise as a result of climate hazards occurring elsewhere,as impacts are propagated through supply chains,infrastructure networks or other sources of interdependencies.Compound risks:multiple risks materialising at the same time may have a disproportionately large impact,and in some ca

189、ses the same climate drivers may lead to multiple hazards.For example,high temperatures and drought can lead to wildfires(Zscheischler et al.,201810),and electricity blackouts as power plants have to shut down due to lack of cooling water.These blackouts then lead to the loss of mechanical cooling,t

190、hereby exacerbating the impacts on health and productivity.Timing:the impacts of a climate risk to an organisation may materialise at a different time to the occurrence of the climate hazard.For example,the economic impact of sea-level rise on a portfolio of coastal properties may occur when percept

191、ions about risk exposure change(e.g.due to flooding elsewhere),rather than when the risk itself materialises.In addition to potential underestimation of physical climate risks,there can be data gaps in understanding the benefits of measures to address those risks.This can lead to underestimation of

192、the benefits of investment in adaptation and thereby make it difficult to build the business case for investment.Distinctive characteristics of adaptation investments Firms behaviour will change as they start to factor in the physical evidence of climate change and this will drive investment decisio

193、ns.This process is known as autonomous adaptation.For example,farmers may 24 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 change the crops they grow,or building owners may install mechanical ventilation to address the consequences of hotter summers.In general,each actor will be best placed to d

194、ecide on the appropriate adaptation responses for their circumstances,based on local knowledge and their own risk preferences.Changes in relative prices may encourage the conservation of scare resources,even in the absence of top-down planning.There are,however,a set of distinctive features that app

195、ly to many investments in adaptation that mean autonomous adaptation alone is unlikely to lead to sufficient investment in adaptation(Cimato and Mullan,201011;Frontier Economics and PWA,202212):Behavioural barriers,including short-termism:the direct benefits of adaptation investments may only be ful

196、ly realised as a reduction in losses when an extreme climate event occurs.Climate change is affecting the probability and severity of some events occurring now(e.g.,floods,heatwaves),but it may still be several years or decades before the relevant events occur and the direct benefits of the adaptati

197、on measure become visible.Distributional issues:vulnerability to climate change is exacerbated by poverty and other forms of socio-economic disadvantage.The communities and countries with the greatest adaptation needs can also have the fewest resources to meet those needs.Public finance may have a r

198、ole in supporting investment within low-income communities.At the international level,climate finance and development co-operation have a critical role in supporting adaptation in developing countries(OECD,202213;OECD,202314).Strong government role:sectors that are particularly relevant for climate

199、adaptation also tend to be the sectors with strong existing government involvement for other reasons.These sectors include agriculture,infrastructure and provision of social services.This government role includes the provision and financing of public goods and services,as is often the case for prote

200、ctive infrastructure,or regulation(e.g.,agriculture,environmental protection,land-use planning and building codes,price regulation of infrastructure utilities).Interdependencies and coordination challenges:the ability of an investment to enhance resilience depends upon the characteristics of the sys

201、tem in which it is embedded.Addressing a climate risk may require coordinated interventions across the system rather than piecemeal investments.For example,addressing drought risk may require investments on the demand side(e.g.drip irrigation)and the supply side(e.g.reducing leaks,increasing storage

202、 capacity).As such,there can be the need to address coordination challenges.Externalities:adaptation investments can yield positive or negative externalities.For example,the use of air conditioning can exacerbate the urban heat island effect,while green roofs can have positive impacts.Effective regu

203、latory environments should limit negative externalities,but conversely it is hard to monetise the benefits of positive externalities.These factors can distort the relationship between the perceived private return and the social return,leading to underinvestment by the private sector.They can also de

204、ter investment by increasing transaction costs.Meanwhile,public investment can be hindered by coordination challenges,insufficient recognition of climate resilience benefits in policy appraisal,and procurement policies that fail to account for the benefits of climate resilience.Investments made auto

205、nomously may also be ineffective or counter-productive from a societal level due to market failures or policy distortions(Mullan and Ranger,202215).For example,building flood defences to protect one area can increase the risk faced by downstream locations.Measures that may make sense from a short-te

206、rm perspective,such as extracting groundwater to substitute for declining rainfall,may store up larger problems for the future when groundwater supplies are exhausted.The regulatory framework will be critical to encourage effective adaptation measures and discourage or prevent measures that increase

207、 the risks faced by others.Undertaking risk-based due diligence can help businesses avoid activities that undermine resilience of communities and ecosystems.25 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 Roles of the public sector The public sector has a critical role in supporting adaptation

208、investment,both through investments made directly and through the effect of public policy on the broader enabling environment for investment.For the former,critical investments relevant for climate change adaptation are often provided by governments because they are inherently difficult to fund priv

209、ately.For example,governments are usually responsible for investing in protective infrastructure,even if some of that infrastructure is supplied by the private sector.Public goods,such as early warning systems and hydro-met services,are central to reducing damages from extreme events.More generally,

210、public investment is critical for climate adaptation because it is driven by policy objectives rather than profit maximisation.Investments are still expected to deliver a stream of benefits in return for the capital invested,but these can be wider social or economic benefits rather than a purely fin

211、ancial return.This is particularly relevant for adaptation,given the importance of equity as a driver for investment in adaptation,as well as the existence of non-market benefits for adaptation(such as health benefits from reduced risk of overheating).The extent to which public investment flows to a

212、daptation depends upon the overall fiscal envelope of the public sector,the priority placed on climate adaptation and the extent to which the allocation of public funds is influenced by potential resilience benefits.There are no comprehensive datasets covering existing domestic public finance flows

213、for adaptation,but some initiatives have shed light on this issue.In Germany,a pilot study undertaken by UBA identified EUR 48 billion of public spending that was potentially relevant to climate change adaptation,of which EUR 1.6 2.5 billion was directly linked to adaptation (Hae,Hlscher and Kohli,2

214、02416).In France,an independent analysis estimated that implementing priority adaptation measures would require a budget of EUR 2.3 billion per year(I4CE,202217).A synthesis of domestic spending by developing countries found that up to 7%of domestic budgets were currently contributing to climate cha

215、nge adaptation(UNFCCC,202218).International public finance has a critical role in supporting adaptation in developing countries,including through bilateral co-operation,the activities of multi-lateral development banks and dedicated climate funds.This finance source is particularly significant becau

216、se the countries that are most vulnerable to climate change often lack the resources and capacity that are needed for adaptation(OECD,202314).In 2022,developed countries provided and mobilised USD 32.4 billion to support adaptation in developing countries,of which USD 29 billion was from public sour

217、ces(OECD,202419).A broader approach is used by the Climate Policy Initiative,which identified a total of USD 63 billion of adaptation finance in 2021/22,of which 98%was from public sources.However,this is based on limited coverage of domestic public investment for adaptation.Beyond public investment

218、 in adaptation,the other critical role of the public sector lies in the creation of a suitable enabling environment for private investment in adaptation.This entails ensuring that regulations and policies do not inadvertently deter investment in adaptation,for example by distorting prices or hinderi

219、ng the adoption of innovative approaches.It also encompasses the provision of public goods,such as climate risk maps,that can support risk-informed investment decisions.There may also be a case for providing positive incentives to support private investment that deliver wider social benefits.The pub

220、lic sectors contribution to supporting investment in climate change adaptation can be constrained by a range of factors,including:Fiscal constraints due to high levels of government debt and limitations on revenue raising,which are a particular challenge for developing countries with limited fiscal

221、space.Institutional barriers responsibility for climate change adaptation often lies within environment ministries,while the policy levers needed to influence public investment lie within finance and 26 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 sectoral ministries.As such,there can be a lack

222、 of capacity or coordination,particularly where investments in adaptation may cut across institutional boundaries.Information gaps lack of data or understanding of the impact of climate-related risks,such as disruption to service delivery or contingent liabilities to public finances.Insufficient evi

223、dence or tools to consider the value of adaptation benefits to inform the allocation of public funds.Private sector investment Private sector investment will be a critical element of overall efforts to adapt to climate change.The private sector is a diverse category,encompassing micro-enterprises,Sm

224、all and Medium Enterprises(SMEs)to large multinational corporations.Firms will have varying capacities and opportunities in relation to climate change adaptation.However,in general terms,the private sector can contribute to adaptation across three dimensions(Cochu,Hausotter and Henzler,201920):Inves

225、ting itself in adaptation undertaking adaptation within the boundary of the firm or in the resilience of its supply chain(e.g.retrofitting facilities to make them more resilient),ideally within the context of a broader adaptation plan.Providing finance for investment by others providing the capital

226、needed for investments that are expected to generate a market-rate return.For larger projects,this could be undertaken via project finance,while smaller projects could be funded via corporate finance(See Box 2.1).Providing solutions for adaptation by others developing the goods and services that can

227、 facilitate adaptation by others(e.g.energy efficient cooling or crops suitable for a broader range of climate conditions).Private investment across these dimensions will be primarily driven by the profit motive,and the degree of transparency,predictability,and adherence to the rule of law in a part

228、icular market.These factors provide a powerful driver to seek out opportunities,undertake innovation and deploy capital where it can earn the greatest risk-adjusted return.Effective management of climate-related risks can also serve to support long-term profitability,by reducing potential costs such

229、 as business disruption,loss of markets,legal liabilities and fines for regulatory non-compliance.Beyond the direct profit and investor confidence motives,companies may also be influenced by compliance with standards such as the OECDs Guidelines for Multinational Enterprises on Responsible Business

230、Conduct,which call for proactive measures to adapt to climate change and avoid negative impacts on communities,workers and ecosystems(OECD,202321).Despite the importance of private investment in adaptation,recorded private finance flows for adaptation remain very limited.Just over half(56%)of the re

231、spondents to the CDP Climate Survey 2022 identified acute physical climate risks as having a substantive impact on their business,predominantly due to concerns about losing revenues due to reduced production capacity(TCFD,202322).Climate Policy Initiative identified just USD 4.7 billion of annual pr

232、ivate finance for adaptation between 2019 and 2022(CPI,202423)Firms do not generally collect nor publish data on the extent to which their investments contribute to climate adaptation,nor is it readily possible to undertake a top-down analysis given that adaptation will often be embedded in investme

233、nts made for other reasons.Emerging frameworks,such as the International Sustainability Standards Board(ISSB)Standards aim to provide greater transparency on private sector activity(See section 3.5).UN-led efforts on national capital accounting have made also significant strides to quantify adaptati

234、on-relevant metrics that can feed into statistical estimates of gross national product(See section 3.1).However,there is currently no systematic tracking of private finance contributing to adaptation,and reported estimates are likely to be underestimated.27 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OE

235、CD 2024 Box 2.1.Project and corporate finance:implications for investment in adaptation Private enterprises at all scales can raise capital for investment by drawing upon their existing assets(particularly their retained earnings)and/or securing external finance through borrowing or equity(shares on

236、 future profits).The mechanics for doing this will vary by scale and context:a small business may only be able to borrow from a local bank,while a larger corporation could issue bonds or issue shares.In this process,generically known as corporate finance,the repayment of external finance is an oblig

237、ation linked to the performance of the enterprise,rather than to that of a specific activity or project.The terms under which finance is available will depend upon the financial strength and credit risk of the enterprise.Corporate finance can be used to finance projects at all scales and does not ha

238、ve to be tied to a specific cash flow.Project finance provides a mechanism for financing long-lived projects,where repayment is largely or entirely based on the cash-flow from the project itself,such as the sale of electricity from a renewable energy project.The benefit of this approach is that it c

239、an provide flexibility in sharing project risks.In project finance,borrowing is based on the strength of the project proposal,rather than the balance sheet of the project sponsor.However,there are higher transaction costs for project finance(e.g.legal fees,commercial advisors)which mean that its use

240、 is restricted to larger scale projects.Corporate finance,particularly through financial intermediaries such as banks,will be critical for financing adaptation investment by SMEs and even larger firms in countries without well-developed capital markets.It will also be critical for financing worthwhi

241、le activities that do not necessarily have a direct cash flow attached,for example installing cooling to improve working conditions.Project finance is better suited to financing climate-resilient infrastructure,where there are direct revenues(such as toll roads),or under a Public-private Partnership

242、(PPP)arrangement.Source:Steffen(201824);ADB-EBRD-IDB-IsDB-WBG(201625).Notwithstanding these reporting challenges,recorded flows of private investment in adaptation are also low due to substantive barriers to investment in adaptation.These barriers include(Tall et al.,202126)Lack of data on climate r

243、isks:investors may lack the underlying data required to understand the risks that they are exposed to,particularly in developing countries.Low(real or perceived)returns on investment:investors may be unable to capture the benefits of investments in adaptation due to market failures,externalities,or

244、other market distortions.Transaction costs can be high relative to the size of the project,particularly where innovative technologies are being used,or the investment involves multiple beneficiaries.Lack of strategic direction:a lack of clear strategic direction by governments can hinder investment

245、by increasing uncertainty(and hence perceived risk)around the future direction of government policies and investment needs.Given interdependencies,the effectiveness of a given adaptation investment will depend upon the resilience of other components of the system.A lack of clarity about the governme

246、nts adaptation priorities can make it difficult for the private sector to plan.Low investor confidence:Based on existing regulatory frameworks and historic actions of governments,potential investors may have low confidence that they will encounter the transparency,predictability,and non-discriminato

247、ry enforcement of the rule of law that is required 28 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 to commit capital.Particularly in the rapidly evolving context of climate adaptation,potential investors must be provided strong evidence that they will be treated fairly,including when regulation

248、s must be modified according to the evolving situation.Systematic efforts will be needed to address these barriers to private investment.These include the development of a supportive policy environment to overcome these barriers,while recognising the specific roles that can be played by private inve

249、stment.In addition to the interventions at the policy-level,project-level interventions may also be needed to align project characteristics with the requirements of private sector participants using approaches such as blended finance for adaptation (OECD,202427).Linking finance and funding to unlock

250、 investment Policies will be needed to increase real economy investments in climate change adaptation.The costs of these investments can be financed from a variety(or combination)of public and private sources,via direct investment or through project finance(Figure 2.2).For these investments to occur

251、,the characteristics of the investment need to be aligned with the requirements of potential financers and the characteristics of the finance mechanism.All finance sources expect a return commensurate with the risk and capital deployed,but the nature of this return can vary significantly(Box 2.2).Fo

252、r example:Financial sector:revenue stream that achieves a competitive market rate financial return,whether resulting from project finance or loans to direct investors(e.g.agri-SMEs).Direct investment by corporates and SMEs:wider variety of benefits may justify the investment,such as reduction in ins

253、urance costs,reduced risk to future profits,or potential new market opportunities.Investment by the public sector:achievement of policy goals,which could include protection of lives and livelihoods,enhancement of the natural environment.Blended finance provides an important tool for combining public

254、 and private funding sources to achieve the desired combination of risk and return.The OECD defines blended finance as“the strategic use of development finance for the mobilisation of additional finance towards sustainable development in developing countries”(OECD,201828).Concessional public finance

255、 is used to reduce risks or improve the expected returns on a project,such that it becomes attractive to private finance.For example,certain risks can be transferred to bilateral or multilateral providers through the issuance of guarantees(Garbacz,Vilalta and Moller,202129).The OECD is currently dev

256、eloping a guidance on Blended Finance for Adaptation(OECD,202427).Finance for climate-resilient investments depends on securing sufficient funding to repay the capital costs,cover ongoing operations and maintenance,and provide a return to investors.Funding sources will depend on the type of investme

257、nt and broader context,but typically include public funding,user charges,land value capture and asset revenues(OECD,202230;OECD,20243).User charges can support efficiency and generate additional resources but may have adverse distributional impacts.New funding models focusing on asset recycling and

258、land value capture can provide important sources of revenue to pay for climate resilience.These are examined in more detail in the OECD report on Infrastructure for a Climate-Resilient Future(OECD,20243).29 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 Figure 2.2.Illustrative list of finance sou

259、rces,mechanisms and adaptation investments Source:Adapted from(OECD,202314)Box 2.2.Aligning project characteristics with the requirements of financing sources The characteristics of the project need to be aligned with the requirements of different finance sources.Blended finance approaches can be us

260、ed to combine different sources to ensure project viability(see(OECD,202427)Projects with no or below market rate returns This type of project includes those being undertaken predominantly for equity reasons(such as supporting vulnerable communities),as well as those that have the characteristics of

261、 public good(such as capacity building).Potential funding sources include:Domestic public finance Bilateral and multilateral development co-operation Multilateral climate funds Philanthropy Projects with some revenue streams This category covers projects that are expected to create revenues,but the

262、expected risk and return is not commensurate with market rates.These projects could include the deployment of nature-based solutions,or the development and deployment of innovative technologies.Financing sources include:Development finance institutions National development banks Impact investors Pro

263、jects with market rate returns This covers projects where the level of risk and projected returns are commensurate with market requirements.This could include climate-resilient infrastructure,such as toll roads or electricity Early warning systemsRelocation of assetsProtective infrastructureBuilding

264、 retrofitsNature-based solutionsNew crop varietiesSmart supply chainsCapacity buildingDomestic publicBilateral development cooperationMultilateral development banksClimate funds(incl.GCF)Corporate sector(incl.SMEs)Finance sourcesAdaptation investments Financial sectorMechanismsProject finance:Equity

265、Debt(incl.loans,GSSS bonds)GrantsBlended financeDirect investmentsEtc.HouseholdsEtc.Revenues/benefits30 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 distribution.It could also include investments to increase the efficiency of resource use,such as drip irrigation.Financing sources include:Banks

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267、lobal Environmental Change,Vol.25,pp.97-108,https:/doi.org/10.1016/j.gloenvcha.2014.01.003.5 Cimato,F.and M.Mullan(2010),“Adapting to Climate Change:Analysing the Role of Government”,Defra Working Papers,No.1.11 Cochu,A.,T.Hausotter and M.Henzler(2019),The Roles of the Private Sector in Climate Chan

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272、ility,Cambridge University Press,Cambridge,UK and New York,USA.4 31 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 Mullan,M.and N.Ranger(2022),“Climate-resilient finance and investment:Framing paper”,OECD Environment Working Papers,No.196,OECD Publishing,Paris,https:/doi.org/10.1787/223ad3b9-en.1

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274、13-2022,Climate Finance and the USD 100 Billion Goal,OECD Publishing,Paris,https:/doi.org/10.1787/19150727-en.19 OECD(2024),Infrastructure for a Climate-Resilient Future,OECD Publishing,Paris,https:/doi.org/10.1787/a74a45b0-en.3 OECD(2023),OECD Guidelines for Multinational Enterprises on Responsible

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277、),FDI Qualities Guide for Development Co-operation:Strengthening the Role of Development Co-operation for Sustainable Investment,OECD Development Policy Tools,OECD Publishing,Paris,https:/doi.org/10.1787/7f251bac-en.13 OECD(2022),G20-OECD Policy Toolkit to Mobilise Funding and Financing for Inclusiv

278、e and Quality Infrastructure Investment in Regions and Cities,https:/doi.org/10.1787/99169ac9-en.30 OECD(2018),Making Blended Finance Work for Sustainable Development,https:/doi.org/10.1787/9789264288768-en.28 OECD(2015),Policy Guidance for Investment in Clean Energy Infrastructure:Expanding Access

279、to Clean Energy for Green Growth and Development,OECD Publishing,Paris,https:/doi.org/10.1787/9789264212664-en.2 OECD(2014),Boosting Resilience through Innovative Risk Governance,OECD Reviews of Risk Management Policies,OECD Publishing,Paris,https:/doi.org/10.1787/9789264209114-en.6 Steffen,B.(2018)

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281、3 Status Report,https:/assets.bbhub.io/company/sites/60/2023/09/2023-Status-Report.pdf(accessed on 22 July 2024).22 32 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 UNFCCC(2022),“Efforts of developing countries in assessing and meeting the cost of adaptation:Lessons learned and good practices Dr

282、aft synthesis report by the Adaptation Committee in the context of the recognition of adaptation efforts of developing countries”.18 van Bree,L.and J.van der Sluijs(2014),“Background on Uncertainty Assessment Supporting Climate Adaptation Decision-Making”,in Adapting to an Uncertain Climate,Springer

283、 International Publishing,Cham,https:/doi.org/10.1007/978-3-319-04876-5_2.9 WMO(2024),State of the Global Climate 2023,World Meterological Organisation,https:/library.wmo.int/idurl/4/68835(accessed on 23 August 2024).1 Zscheischler,J.et al.(2018),“Future climate risk from compound events”,Nature Cli

284、mate Change,Vol.8/6,pp.469-477,https:/doi.org/10.1038/s41558-018-0156-3.10 Notes 1 Physical climate risks are those that result directly from the impacts of climate change(such as heatwaves or wildfires),as contrasted with transition risks which are those that may arise from the process of moving to

285、 net zero(e.g.impact of carbon pricing on carbon intensive industries).33 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 This chapter provides the six“building blocks”of the Climate Adaptation Investment Framework.These collectively identify critical policies areas for enabling public and private

286、 finance to flow towards investments that support climate resilience.Each building block includes key findings,examples of international good practice,and provides diagnostic questions to identify gaps in the enabling environment.Links to further resources and guidance are provided for each building

287、 block.3 The Climate Adaptation Investment Framework 34 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 The CAIF consists of six components(“building blocks”)that collectively identify the policies that can enable public and private finance to flow to investments that support climate resilience.Th

288、e Framework targets actions that can be led by national governments and is intended to be applied in a flexible,non-binding and non-prescriptive manner,recognising that the appropriate responses will be context specific.In this evolving policy area,the CAIF provides a baseline of good practices that

289、 draw on existing tools and resources,while identifying areas in which information gaps remain.This Framework covers domestic policy measures,while recognising that the enabling environment for investment is influenced by a broader range of factors,including capacity and access to financial resource

290、s.It is intended to complement existing initiatives to build capacity and enhance developing countries access to climate finance.Each component of the CAIF outlines the key policy areas that governments should consider in trying to mobilise investment for climate adaptation,offers examples of good p

291、ractice,and provides a set of diagnostic questions to guide governments in identifying priority actions(Table 3.1).These components are interlinked and intended to be mutually supportive.For example,effective strategic planning can identify priority investment needs,support for private investments c

292、an translate that concept into a viable project provided that there are suitable funding mechanisms in place.Sustainable finance tools could facilitate access to credit on more attractive terms than would otherwise be the case.Table 3.1.Components of CAIF and guiding questions for policymakers Compo

293、nent Guiding Questions Strategic planning and policy coherence Are there clear objectives for adaptation at the national level,for example through a National Adaptation Plan or Strategy?Has adaptation been integrated into the strategies and plans for investment in key sectors(such as agriculture,inf

294、rastructure and water)?Is there a process in place to identify adaptation investment needs and link those needs with finance sources?Are responsibilities for managing climate-related risks clearly identified?Are mechanisms in place to ensure that centre-of-government financial and planning instituti

295、ons have ownership of adaptation and resilience investment needs?Is there a process in place to ensure multi-stakeholder coordination and dialogue across relevant ministries,national and local agencies and the private sector on adaptation priorities and investment plans?Is authoritative data on clim

296、ate risks publicly available?For example,through a platform or data repository.Have the potential economic risks of climate change been assessed?Are any data collection efforts in place to monitor trends in public and private investment relevant to adaptation?Regulatory alignment Sectoral Do agricul

297、tural support mechanisms favour specific commodities?Are payments linked to compliance with environmental regulations?Does the regulatory system encourage resilient retrofitting of buildings?For example,is adaptation mainstreamed into existing retrofitting programmes,and do planning requirements sup

298、port adaptation?Do regulatory arrangements for business and industry facilitate investment in adaptation?For example,are climate-related risks addressed within existing health and safety legislation.Are climate-related risks clearly identified and managed for infrastructure networks?Do policies for

299、economic regulation of infrastructure providers provide incentives for mainstreaming climate resilience?To what extent are investments in climate resilience viewed as allowable investments?Are there mechanisms(such as payments for ecosystem services)in place to put a value on the services provided b

300、y the natural environment and ecosystems?Is there an effective system in place for managing water resources,including mechanisms for reflecting the value of water?Cross-cutting Are fundamental elements of investment policy in place to promote confidence in transparency and predictability,and non-dis

301、criminatory contract enforcement and dispute settlement?Are there efforts underway to identify whether technical codes need to be updated in light of climate change?What support is available to help enable and prioritise these interventions?Does land use planning account for the evolution of climate

302、 risks over time?Are these planning processes enforced?35 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 Insurance and risk transfer Do mechanisms exist to help insurers accurately reflect climate risk?What frameworks or standard-setting tools exist to ensure the quality and accuracy of climate-r

303、isk assessments across the insurance sector?Do mechanisms exist to motivate insurers and other institutional investors to align investments with adaptation and resilience needs?Are there clear incentives for risk reduction and resilience building activities?Do governments help to communicate climate

304、 risks that cannot be reduced?Are risk-sharing arrangements well-understood among households,businesses,and governments at all levels?Does the insurance market offer policies that include resilient recovery from extreme events?Are there market or regulatory barriers to such products?Do mechanisms ex

305、ist to understand the impacts of climate-related disasters on public finances?How do governments account for the costs associated with climate risk,including the ex-ante fiscal costs posed by contingent liabilities?Public finance and investment Does the process of allocating budgets consider the pot

306、ential impacts of climate change?Do project or programme appraisal tools account for the benefits of adaptation?Do public procurement policies account for benefits over the lifecycle of the investment?Do the systems for asset management aim to optimise costs of existing assets over their lifespans?D

307、oes the process for allocating risks within PPPs account for climate risks?Is there a strategy in place to manage the financial consequences to the public sector of climate extremes?Sustainable finance Are there voluntary or mandatory standards/mechanisms or principles for identifying adaptation inv

308、estments that have been adopted by market participants?How is compliance with those standards/mechanisms or principles measured and verified?Are mechanisms in place to provide transparency about the exposure of financial assets to physical climate risks?What guidance exists to support disclosure in

309、relation to the choice of metrics,scenarios and assumptions?Do requirements for corporate disclosure,including transition plans,address adaptation?Do these reflect the benefits of adaptation,as well as exposure to physical climate risks?Is there a taxonomy for green and sustainable finance?If so,doe

310、s this taxonomy include criteria for climate resilience?Is there any technical or financial support available for potential issuers of climate resilience financial instruments?Support and incentives for private investment Are existing incentives to stimulate private investment in support of adaptati

311、on well-targeted and time-limited?Are measures in place to assess their cost-effectiveness?What resources are available to help project developers understand the climate-related risks that they face and potential adaptation measures?What support is available to help with early-stage project developm

312、ent?Is climate resilience systematically considered within existing mechanisms for supporting project preparation?Are there support mechanisms in place to assist with access to climate finance,such as national climate funds?To what extent is the existing intellectual property framework conducive to

313、promoting investment in adaptation innovation and transfer of adaptation technologies among firms?What support is available for early-stage innovation in adaptation?Are knowledge transfer facilities in place(e.g.technology centres,business incubators,applied research centres)to provide knowledge exc

314、hange and innovation services for adaptation technologies?36 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 Strategic planning and policy coherence The physical impacts of climate change will be far-reaching and systemic.Institutional coordination to develop coherent multi-sector strategies and p

315、lans can facilitate adaptation investment by creating a shared understanding of the likely impacts of climate change,identifying priority investment needs and supporting a discussion about how these can be financed.Access to climate and socio-economic data to identify and monitor evolving vulnerabil

316、ities and risks is needed to support the strategic planning process.Institutional coordination Climate change adaptation is a systemic challenge,both in terms of the propagation of climate risks and the development of adaptation responses.Climate impacts occurring in one area can have knock-on impac

317、ts elsewhere:for example,the flooding of a port could disrupt supply chains across the economy.Similarly,the effectiveness of a given adaptation investment will often depend upon what other measures are being undertaken.For example,the expected value of having a generator as backup will depend upon

318、the measures that are underway elsewhere in the economy to enhance the resilience of the electricity supply.Multiple institutions are involved in designing and implementing strategies and policies that affect investment in adaptation(see Box 3.1 for examples of national approaches).Mechanisms such a

319、s central coordination or decision-making bodies can support a comprehensive and coherent approach to adaptation planning.These mechanisms can enhance alignment and communication across ministries,sector entities,national and local agencies,and the private sector.For example,Colombia has established

320、 a national system for climate change(known as“SISCLIMA”)that oversees adaptation planning.This is led by the Department of National Planning(DNP)and includes the ministers for the key sectoral ministries.Leadership by DNP helps to ensure consistency with the countrys development plans(OECD,20141).I

321、n the absence of such arrangements,overlapping and sometimes conflicting rules,procedures and regulations across ministries and levels of government,including between the central and provincial levels can create administrative burdens on investors.An inclusive process is needed to engage these actor

322、s in identifying and implementing the measures needed to unlock investment.Climate adaptation is generally the responsibility of environment ministries,yet the policy tools needed to unlock investment flows sit with other ministries and institutions responsible for financial planning and budget mana

323、gement,which may lack capacity and expertise in relation to climate change(CFMCA,20222).Under the Helsinki Principles,the Coalition of Finance Ministers for Climate Action developed a guide that provides a framework of options for mainstreaming climate adaptation and mitigation into the core functio

324、ns,capabilities and priorities of ministries of finance(CFMCA,20233).The framework provides guidance on strengthening inter-ministerial coordination on climate change,including establishing coordination bodies and adapting the mandate of ministries of finance to include climate action.High-level cou

325、ncils set up through the Prime Minister that include representatives from relevant public agencies can help bridge political interests and administrative boundaries,and ensure that centre-of-government financial and planning institutions have better ownership of adaptation and resilience investment

326、needs.The location-specific nature of climate impacts means that effective governance of adaptation investment relies more heavily on multi-level approaches than other types of investment.National policy alignment instruments can help promote coherence in the activities of different subnational juri

327、sdictions and ensure coordination across different levels of government and line ministries(OECD,20234).Examples relevant for adaptation include national and regional climate change councils,national adaptation policies,plans and strategies that clearly address the local level,and national urban pol

328、icies with a focus on climate 37 CLIMATE ADAPTATION INVESTMENT FRAMEWORK OECD 2024 adaptation.Such instruments can help clarify the decision-making roles and responsibilities of national,subnational and local governments,and help identify concrete measures to be taken at different levels to ensure a

329、n enabling environment for adaptation investments.Involvement of non-governmental actors in multi-level climate governance is useful to ensure awareness and consideration of different perspectives and increasing buy-in and support for implementation.Moreover,stakeholder engagement can play a critica

330、l role in ensuring that adaptation commitments,targets,and actions are credible and effective,and grounded in science and legitimate expertise.Experts engagement can also come from a wide variety of stakeholders,including indigenous communities,workers and consumer groups.Inclusive processes of enga

331、gement with stakeholders are crucial to better understanding potential interdependencies between climate impacts and human rights and can provide valuable insights on how to enhance effectiveness of adaptation investments(OECD,20235).In France the High Council on Climate was established in 2018 to i

332、ncrease coordination between public agencies,engage relevant stakeholders and advise to the French government on the delivery of policy measures aimed at mitigating and adapting to climate change.The Councils members include climate scientists,agricultural engineers,and energy and environmental expe

333、rts.Strategic planning Strategic planning has a critical role in supporting investment by raising awareness of climate risks and adaptation opportunities,facilitating discussion about acceptable levels of risk and identifying priority actions and policy tools to accelerate adaptation finance(OECD,20156).Planning processes can also contribute to improved institutional coordination and provide clari