NAIROBI, Kenya, Feb 21 – Kenya could avoid the costs of an estimated Sh2.5 trillion ($2 billion) by investing a minimum of Sh25 billion ($200 million) in adaptation.
The climate adaptation projects include the creation of coastal barrier protection solutions for areas likely to be affected by floods, the development of drought-resistant crops, extreme climate-resistant housing, and early-warning systems against pending natural disasters.
According to a new Standard Chartered Bank study, failing to invest could cost emerging markets like Kenya hundreds of billions of dollars in climate damages.
The adaptation economy investigates the need for climate adaptation investment in 10 standard chartered footprint markets, such as Kenya, China, India, Bangladesh, and Pakistan.
Without a minimum investment of $30 billion in adaptation by 2030, the report states that these markets risk losing $377 billion of GDP, which is over 12 times more.
In line with the Paris agreement, the projection assumes that the world succeeds in limiting temperature rises to 1.5°C, in a scenario of 3.5°C.
India is projected to benefit the most from adaptation investments among the 10 markets in the study.
The market will require an estimated $11 billion to prevent climate damages and lost growth of $135.5 billion in a 1.5°C warming scenario–equal to a thirteen-to-one return for the Indian economy on investment in climate adaptation.
The study, which surveyed 150 bankers, investors, and asset managers, found that just 0.4 percent of the capital held by respondents is allocated to adaptation in emerging markets, where investment is most needed.
“An investment of USD 30 billion required for adaptation represents only slightly more than 0.1% of the combined annual GDP of the 10 markets in the study and much less than the estimated USD 95 trillion emerging markets require to transition to net zero using mitigation measures, as outlined in Standard Chartered’s report.”
