From May 24th to May 28th, I had the privilege to participate in an historic conference to link the public and private investor sectors to help tackle the multi-trillion dollar capital expenditures required between now and 2050 to implement the strategies outlined in the December 2015 Paris COP 21 sessions. 

Here is a link to the actual conference: http://conference.proadapt.org/ In due course, all the various panels should be available as they were taped.  There is also a video about ProAdapt that can be accessed here: https://we.tl/a3tDcNLHDU

Here is the original press release for ProAdapt: http://www.iadb.org/en/news/news-releases/2013-04-17/mif-nordic-development-fund-partner-on-proadapt,10426.html.

The basic premise behind ProAdapt is that variable weather patterns are the “new normal.” With change comes opportunity so there will also be extraordinary opportunities to profit from the changing weather patterns. I have always said that any successful commercial business person must understand and be able to predict future trends. So, hence the title of the conference: The Challenge and Opportunity of Private Sector Climate Resilience.

Why was this conference historic? This was the first time that major players in both the public and private investment sectors agreed to tackle the enormous task of protecting our species by considering the following:

1) adopting sustainability (mitigation) measures to help reduce our collective carbon footprint. This requires rapid adoption of renewable energy technologies worldwide; this appears to be happening.
2) adopting resilience (adaptation) measures to protect our coastlines, cities, towns and villages worldwide against changing weather patterns, including flooding, drought, winds, wildfires and other damaging weather conditions. Adaptation is lagging far behind mitigation and needs to have its proverbial “game” stepped up significantly and quickly.

We, at the NRF, have found that Sustainability and Resilience are complementary and need to be considered in concert rather than in a silo-ed fashion, as is often the situation in our fragmented and specialized society. Think organic whole, rather than individual parts.

3) the preferred financing structure for large scale resilience infrastructure projects appears to a combination of what I call 1) zero or low cost equity (say 10% of a project), either in the form of grants or other creative financing plus 2) low cost debt in the form of Climate Bonds (the other 90%) and other public sector debt instruments.

I spoke with the Nordic Fund and they issued a $6 million grant to Dar Es Salaam Port in Tanzania for coastal infrastructure improvements; the balance of the $75 million project was funded by the World Bank at an interest rate of around 2%; the project is now in its design phase. This is a financial model that needs to be replicated worldwide and quickly.

At the NRF, we have proposed Climate Resilience Investment Tax Credits (CRITCs) and Climate Resilience Grant Investment Subsidies (CRISs) to help fund the zero cost equity components. Other ways to fund this equity component potentially come from grants from development banks, both national and international and even insurance companies and utility companies. See our original white paper about our proposal for the CRIS aimed at improving properties to make them more climate resilient as well as our Protect, Enhance & Preserve measures for properties (PEP Measures). http://naturalresiliencefund.org/svc/sites/naturalresiliencefund.org/files/WHITE_PAPER-NRF_2014-11-03.pdf

The CRITC, if enacted, would provide the impetus for governments to implement wide scale infrastructure projects along the lines of the U.S. WPA Program (Works Progress Administration) in the 1930’s to stimulate infrastructure investment.  Here in the U.S., as well as all other countries, we require vast investments to improve our water, sewer, coastal protection and other climate resilience measures to ensure not just up to date infrastructure but infrastructure that accounts for changing weather patterns. This realization was another outcome of the Cartagena ProAdapt conference; not just investment, but climate resilient investment.

Finally, ProAdapt is embarking on an $800,000 study with Global Climate Adaptation Partnership (GCAP). www.ClimateAdaptation.cc. I am advisor for GCAP and though my role has not been defined, I hope to develop private sector opportunities in the six countries under study, 1) Philippines, 2) Nicaragua, 3) Colombia, 4) South Africa, 5) Vietnam and 6) Kenya.

The GCAP team is: Tom Downing, CEO (tdowning@climateadaptation.cc), Lesley Downing (ladowning@googlemail.com), Carmen Lacambra of Grupo Laera (carmen@GrupoLaera.com) (along with her brother Juan Jose Lacambra Segura (juan@grupolaera.com), Dominic Molloy, Climate Economist of Grupo Laera (dominic@GrupoLaera.com), Lauren Burnhill (lauren.opv@gmail.com) and Joyce Coffee (joycecoffeeconsulting@gmail.com). And of course, Eric Kaufman (ekaufman@naturalresiliencefund.org).

Specifically, I will be looking for established companies in these countries that have the following characteristics: 1) a minimum of $20 million USD sales or turnover, 2) local management in place that is honest, efficient and competent, 3) the ability to “scale” up the business by a factor of ten, or a minimum of $200 million USD sales within a three to five year period ideally and 4) the ability to implement climate resilient solutions and opportunities to augment the company business model. These characteristics are exactly what Impact Investors are looking for to help them achieve the yields they need to show their investors.

Obviously, more on this subject will be forthcoming.  Remember the future…

The Challenge and Opportunity of Private Sector Climate Resilience

The Challenge and Opportunity of Private Sector Climate Resilience