India faces a significant challenge: underinvestment in climate adaptation. A new report by Climake highlights this stark contrast. While climate mitigation has attracted substantial private investment – $4.7 billion in 2023 alone – adaptation initiatives have received a mere $899 million in lifetime funding.
For now, not much actual investment is happening, but more private investors are interested in the topic and there are more conversations. Adaptation is hard, right? How do you measure the impact of investing in a company that’s making cooling easier? Or investing in a company that’s improving farm productivity?
This is a lot more difficult to measure than, say, investing in a solar project and calculating the equivalent carbon reduction.
Climake, dedicated to fostering India’s private climate finance ecosystem, works closely with startups and investors. They identify promising areas for investment, including sustainable food systems, cooling solutions, water management, and adaptive infrastructure.
India needs a massive influx of climate finance – $108 billion annually until 2030. Currently, the sector receives only $22.5 billion in private capital, with debt financing dominating.
Though mitigation has been the primary focus, the urgency of adaptation is undeniable. Climate change impacts are accelerating, and businesses face substantial financial risks. This reality is driving increased interest from development institutions and corporations.
In essence, while India has made strides in climate action, the adaptation piece remains significantly underfunded. Bridging this gap is crucial for the country’s resilience and sustainable future.
Reference- The State of Climate Finance in India 2024 report, Climake website, Forbes India article