Climate action is the theme for today’s 50th World Earth Day anniversary. This shows the enormous challenge that we are facing globally.
There is no time to lose as the crisis gathers pace and the impacts of climate change can be seen across the globe. It is clear that climate action initiatives need to reach scale as quickly as possible.
Yet, there are also vast opportunities for innovative initiatives focusing on climate change adaption or mitigation. One project that takes on the challenges of climate change is the Dutch Fund for Climate Development (DFCD). Established in June 2019, it seeks to improve and leverage private investments in climate action and the wellbeing, economic prospects, and livelihoods of vulnerable groups – particularly women and youth. Albert Bokkestijn, SNV Project Manager for DFCD, speaks about the current climate crisis, the aims of the DFCD project and the comparisons that can be drawn between the climate change crisis and the current COVID-19 crisis.
When it comes to climate change, we regularly hear that the developing world will be the most affected. Can you explain why this is the case?
To answer this, you must look at the people at the heart of the issue. Most communities in developing countries are dependent on the direct use of natural resources. Therefore, if natural resources are affected by climate change, this will have a direct impact on those communities. This is less so for developed countries where only a small percentage of the population is directly engaged in the use of natural resources. That is my first point. My second point is that if you want to mitigate or adapt to the impacts of climate change then you need economic resources, knowledge and governance. These three elements are not always in place in developing countries. So, on the one hand, if you depend directly on natural resources and, on the other hand, your access to economic resources and/or knowledge is limited, the impact of climate change becomes apparent very quickly.
Can you see any parallels between the climate change crisis and the current COVID-19 pandemic?
Today, the world is dealing with another crisis and it is clear to see that the COVID-19 crisis and climate change are two sides of the same coin. Similarly, it is the most vulnerable communities who will be most affected. Often in terms of climate change, we speak about creating resilience. What is important to remember is that it's not resilience to one emergency that we need to create but resilience to all crises. SNV’s objective is to make a lasting difference in the lives of people living in poverty by helping them raise incomes and access basic services, consequently increasing their resilience.
Can you explain the current status in terms of investments in projects aimed at climate adaptation and prevention in developing countries?
If you look at the financial landscape for climate action right now and take mitigation, for example, 90 percent of all the investments are being made in the developed world in the countries themselves that are the source of the money. Approximately, 10 percent goes to developing countries and most of this funding is going into mitigation, but mitigation is not enough. We already know now that 1.5 centigrade increase in temperature is already difficult to avoid and there is a possibility that the temperature will increase by 2 or 2.5. Consequently, there is a great need to adapt and the adaptation agenda is extremely underfinanced. Although we have this commitment in terms of the Paris Agreement and we have national governments with their National Action Plans, there is still a huge need for finance. This finance is not being catered for by public funding so there's a huge gap that needs to be solved by private sector investments. That's exactly why the Dutch Fund for Climate Development has been established to leverage this kind of investment and to improve the private sector appetite for investing.
Albert, you have touched on the DFCD project in your previous answer. Can you explain the objectives of this initiative?
The goal is to encourage the private sector to see business opportunities in climate change and foremost in adaptation. Also, we aim to be innovative while at the same time, we need to think about scale because there is no time for small scale solutions anymore looking at the vast needs and urgency that we have at a global level.
With the public finance that we have from the DFCD, we will de-risk investments but also help get innovative ideas into great shape as most of the initiatives are still at the very beginning - rough diamonds that need to be polished so to speak.
Can you give examples of the focus areas for the project?
The project is focusing on four areas and SNV is concentrating on two of those areas. Firstly, water and sanitation or water ecosystems, ecosystem health, climate-smart agriculture and forestry. Currently, we are looking at climate-smart agriculture and exploring initiatives on how to intensify crop cultivation. The rationale is to ensure that we can still meet increased food security needs while halting deforestation.
We are exploring a few cases of what is called ‘restoration of ecosystem services’ focusing on ecosystems like peatlands or mangroves that have a vital role to play in supplying water and harvesting. Mangroves are essential for the reproduction of fish. If you don't have mangroves, fish supply vital to poor communities will be severely diminished. Additionally, mangroves are excellent ecosystems for capturing and storage of carbon.
The current COVID-19 crisis has made it clear that there is even a greater need to focus on local business models that are not too dependent on a complicated international value chain because if a crisis hits, those chains are severely impacted. Now, we are looking more into the possibility that these business models will boost food security but also considering local domestic markets. Investors are bound to international markets if they look at the investment model, but international markets become much more vulnerable in a crisis like today.
Are there any issues that you are encountering in terms of the DFCD project?
One of the bottlenecks that we are encountering is that investors are looking beyond this pandemic to the next challenge which is the economic crisis. Many companies are now becoming a little bit more hesitant to take risks. What we must look at in the DFCD is how can we de-risk even further to get private investors to put their money in these innovations. We don’t have a crystal ball to see into the future, but I expect this will be one of the challenges that we will have to face.
What is the significance of the landscape approach in this project?
The landscape approach is important if you look at this crisis from the perspective of the people who are affected the most. We need to increase the resilience of the most vulnerable concerning climate change. But also, resilience to all other emergencies which affect sustainable development. Improving resilience cannot be achieved by a one-off solution. If you want to improve the resilience of those communities then you must invest in several complementary actions. The landscape lens kicks in because the approach not only looks at the sum of those individual actions but also how they can complement each other working in synergy.
How can interested organisations get involved in this project?
To reiterate my earlier point, the challenges we are facing are huge. Therefore, we are focusing on innovative ideas that target scale and actions that need investments of more than 1 million euros. The initiatives need to comply with three basic criteria: (1) Does the business idea score well in terms of revenue generation in the long term? (2) Does the initiative have an objective for climate change mitigation or adaptation at its heart? It should be focused on climate change mitigation or adaption not just as a co-benefit of the business model (3) How well does it score on sustainable development especially on the inclusion of the most vulnerable people? On those three issues, the initiative needs to score well. In addition, it should be sizeable and must have the ability to scale.
On the DFCD website, there is a questionnaire which organisations can answer to see if their initiative is applicable for the DCFD fund.
What is your message on the 50th anniversary of World Earth day?
The last few months have taught us that to stay safe, we need to take care of ourselves and of each other. This sentiment is also very relevant for Earth Day. We need to take care of each other not only for this crisis but for all the future crises that will affect Mother Earth. We must increase our support and investments in climate actions to ensure that we are in time to meet the world's biggest challenge which is still climate change. It is almost as though this current crisis is a wake-up call for humanity. Hopefully, in time, the lessons that we are learning from the national and international support needed to confront COVID-19 can also be incorporated into climate action. So, my message is to take care of one another, be kind and let's learn some lessons we can take forward.