A Climate Change Adaptation Pivot Like PEPFAR?

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A short, spoken-word summary from CSIS’s Noam Unger on his commentary, “A Climate Change Adaptation Pivot Like PEPFAR?”

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The world is waking up to climate change adaptation, and U.S. foreign policy may be at a pivotal moment akin to when the U.S. government shifted dramatically to focus on the global ravages of HIV/AIDS.

As world leaders come together at the 28th UN Conference of the Parties (COP28) climate summit in Dubai, they will be reviewing and seeking to act on the conclusions of the first “global stocktake,” a measure established by the Paris Agreement to assess collective progress on climate goals. The bottom line is that the United Nations acknowledges a “well-known big mitigation gap” that implies missed targets intended to curb the worst impacts of climate change. Those impacts, in turn, mean greater demand for investments in adaptation, climate-resilient development, and efforts to avert, reduce, and address climate change-related losses and damages. That demand is particularly acute for the approximately 3.3 to 3.6 billion people who live in contexts that are highly vulnerable to climate change, including many across the Global South where resources to manage such risks are even more scarce.

Two decades ago, world leaders convened for a different historic meeting because they worried about the impact HIV/AIDS was having on peace and security, particularly in Africa. Within U.S. foreign policy, concerns about that crisis, and how ill prepared vulnerable countries would be were it allowed to grow worse, gave rise to the development and launch of the President’s Emergency Plan for AIDS Relief (PEPFAR). It may be that those events have a historic echo in the current moment with regard to climate change impacts and the development of another nascent presidential-level initiative: the President’s Emergency Plan for Adaptation and Resilience (PREPARE).

Adaptation

“Waking up” to the imperatives of adaptation is markedly different from acknowledging and then seeking to mitigate climate change. The latter has rightly been under the microscope for many years; the dominant question in diplomatic attention to climate issues has been how to curb emissions so that the average global temperature does not exceed the aspirational threshold set by the 2015 Paris Agreement of 1.5 degrees Celsius above pre-industrial levels. While progress against global goals, like net-zero greenhouse gas emissions by 2050, may be frustrated by tempered ambitions (including strategic competition, populism, geopolitical volatility, and misaligned market incentives) a stark reality is staring the world’s population and its representatives in the face. Even successful accomplishment of the 1.5-degree target—an aim that is seemingly slipping by the day—would mean elevated impacts of climate change will continue to pose challenges to the survival of people and businesses across the world for decades.

The impacts of climate change on even just malnutrition, malaria, diarrhea and heat stress are projected to cause around 250,000 additional deaths each year from 2030 to 2050. Developing countries with weaker health systems will be the least able to cope, and more than half of these additional deaths are projected to happen in Africa. Whether from rising seas and floods, or from droughts, extreme heat, wildfires, and other climate change exacerbated hazards, the worldwide human toll will be severe. That toll is already mounting. It will certainly be raised at COP28 that 2023 has been the hottest year on record, and that a catalog of recent catastrophes, from floods in South Asia to droughts in the Horn of Africa to wildfires in North America, serve as the latest alarm bells.

In practice, adaptation covers a wide-reaching array of activities from expansion of climate information services and development of disaster early-warning systems to building climate-resilient infrastructure and providing innovative insurance coverage. Analyses continue to improve, but upstream investments in adaptation and resilience clearly can result in financial savings and returns. Adaptation investments to contend with coastal flooding, for example, yield 14 times their value in return through reduced economic damages. As a recently released White House document observed, “Just 24 hours of warning before a coming storm or heat wave can cut the resulting damage by 30 percent, and spending $800 million on such systems in developing countries would avoid losses of $3-16 billion per year.”

Although adaptation has been a part of climate negotiations for many years, it has risen on the agenda to the point at which it can no longer play second fiddle alongside mitigation efforts. As Swathi Veeravalli, the White House National Security Council director for climate security and adaptation, recently noted at a CSIS event, “ensuring that adaptation gets as much oxygen as the mitigation conversation,” at COP is critically important. It has not always been easy to achieve that, but climate finance for adaptation is squarely on the agenda for discussions in Dubai.

Climate adaptation did make headlines during the 2009 UN climate summit in Copenhagen, when the United States, China, and other developed countries struck a nonbinding side deal in which they endorsed the goal of mobilizing $100 billion annually for climate finance—including adaptation-related support—to developing countries by 2020. While versions of this goal persisted and were incorporated into subsequent climate summit plans and agreements, the $100 billion in overall climate support to developing countries was not reached in 2020— a fact pointedly noted by countries of the Global South. Organization of Economic Cooperation and Development (OECD) analyses of climate finance data indicate that the $100 billion threshold was likely met as of 2022, but complete data from 2021 still show that mitigation-related finance represented 60 percent of total climate finance, while adaptation represented only 27 percent (with 13 percent counting as “cross-cutting”). As the OECD noted, “Low levels of adaptation finance in both absolute and relative terms represent a bottleneck identified by both developing and developed countries.” As evidenced at COP26 in Glasgow (2021) and at COP27 in Sharm El Sheikh (2022), increasing pressure from developing countries caused adaptation issues, including loss- and damage-related financing, to rise on the agenda, but analysts and stakeholders have widely characterized progress as either incremental, stubborn, or stalled. In 2021, public adaptation finance flows to developing countries declined by 15 percent to $21 billion, a dip that the UN Environment Program (UNEP) noted “sets a worrying precedent” in light of pledges made that same year to deliver around $40 billion annually in adaptation finance by 2025.

But even $40 billion annually would not meet anticipated needs. Estimates vary, but the latest analyses indicate that the costs of adaptation in developing countries are between $215 billion and $387 billion annually depending on whether the data stem from modelled costs or information extrapolated from countries’ national adaptation plans. Those estimates are only for this decade. Similarly calculated costs are projected to rise significantly by 2050 (even beyond $500 billion by some measures). As the costs and impacts keep increasing, something has to change.

HIV/AIDS and PEPFAR

Only one generation ago, the outlook for the HIV/AIDS crisis also seemed utterly dire. Beginning in the 1980s, the HIV/AIDS epidemic caused a widespread humanitarian crisis, impacting communities and economies around the world and leading to the deaths of two million people per year by the turn of the century while calling attention to failing healthcare systems. Multilateral efforts struggled to combat the spread of the disease in fragile states, and because of the high cost of treatment, the HIV/AIDS epidemic disproportionately impacted developing countries. Approximately 22 million Africans were living with HIV/AIDS by 2000, and at that point, over 11 million had died from the epidemic. In many parts of the continent, the disease had led to rates of life expectancy at birth not seen since the 1950s. As world leaders declared it a security threat, Kofi Annan, the UN secretary-general from 1997–2006, described the HIV/AIDS epidemic as no less destructive than that of warfare itself. In 2000, James Wolfensohn, the President of the World Bank, noted that “in Zambia and Zimbabwe, there was more chance of a child born today dying from AIDS than living free of the disease.”

A turning point in U.S. foreign policy came when George W. Bush’s administration launched a presidential-level initiative—the President’s Emergency Plan for AIDS Relief (PEPFAR)—pledging billions of dollars in bilateral assistance. After Congress passed related legislation in 2003, the first iteration of PEPFAR allocated $15 billion over a five-year period to focus on prevention, treatment, and care for those suffering from HIV/AIDS in 15 countries across Africa, Asia, and South America. Today, following years of bipartisan support, the United States has contributed over $110 billion through PEPFAR work across 55 countries. Credited with saving more than 25 million lives so far and preventing transmission of HIV to 5.5 million babies, this investment has been the largest by any nation to focus on a single disease. The landmark initiative, which is awaiting its fourth reauthorization from Congress, has set its sights on eliminating AIDS as a public health threat by 2030, a goal that would have been difficult to fathom only two decades ago.

PEPFAR has additionally had impacts well beyond its immediate focus on HIV/AIDS prevention, treatment, and care. There have been knock-on effects of PEPFAR, with the results of health system strengthening evident in responses by partner governments, civil society organizations, and community-based healthcare workers to outbreaks of cholera, Zika, Ebola, and Covid-19. In addition, PEPFAR has served a leading role in efforts to make U.S. global development programs more “localized.” Other methodologies pioneered by PEPFAR, with its consistent emphasis on data-driven approaches and detailed results reporting, have significantly influenced the policies, programs, and politics of U.S. foreign assistance more broadly.

PREPARE

The present moment of inflection for U.S. policy on global climate adaptation may be slightly analogous to the AIDS pivot a generation ago, but certain key factors will have to fall into place. A presidential-level initiative, with associated budget requests, has already been launched. Two years ago, in Glasgow, the Biden administration unveiled the President’s Emergency Plan for Adaptation and Resilience (PREPARE) as a whole-of-government initiative intended to be the cornerstone of U.S. efforts to address the increasing impacts of climate change.

Launched in President Biden’s first year in office, the initiative is a part of efforts to restore U.S. global leadership on climate change, which also included rejoining the Paris Agreement. PREPARE aims to marshal the diplomatic, development, and technical expertise of the United States to assist more than half a billion people in developing countries as they adapt to and manage the impacts of climate change by 2030. Co-led by the U.S. Department of State and U.S. Agency for International Development (USAID), PREPARE draws upon many different agencies of the U.S. government, focusing on adaptation gaps that disproportionately impact vulnerable and marginalized communities around the world. A year ago, the administration released the PREPARE Action Plan, which helped to clearly communicate more of the specifics around this emerging initiative, its 3 key pillars, and what that work would entail.

Nineteen U.S. departments and agencies, covering agriculture, trade, earth science, remote sensing, finance, global development, and more, have started or enhanced programs aimed at creating early warning and emergency management systems, building climate resilient infrastructure, and sharing knowledge and expertise. To resource these efforts, Biden committed to work with Congress to significantly increase budgets for global climate adaptation efforts to $3 billion annually by 2024, part of a broader intent to scale up U.S. international climate finance to $11 billion annually over the same period. To date, partisan divisions and congressional dysfunction have stood in the way of this goal.

The political context for PREPARE is, of course, quite different today than when PEPFAR was established and developed with bipartisan support a generation ago. But continued international pressures and associated instability combined with widening domestic attention to climate change impacts and resilience efforts within the United States and globally are likely to ensure growing political support for the foreign assistance activities that constitute PREPARE.

One aspect of the PREPARE approach that is also likely to help garner increased political support over time involves the USAID and Department of State Standard Indicators for Climate Change Adaptation and Development. These include ways the U.S. government plans to track how its assistance helps institutions to improve their capacity to address climate change risks, or the number of climate change adaptation-related laws, policies, regulations, and standards that have been supported by U.S. assistance. The indicators also include components like the number of people trained or supported through PREPARE. While data collection about investment impact needs to continue to improve, PREPARE’s emphasis on communicating about the program, its progress, and related data, is influenced by the effect PEPFAR has had on U.S. bilateral foreign aid by emphasizing evidence and accountability. Official PREPARE documentation notes, “To ensure results and accountability, PREPARE is raising the bar on how the USG designs, monitors, reports on, and learns from its investments in adaptation. PREPARE commits the USG to build on the existing ways that we measure whether communities are becoming more resilient to the impacts of climate change as a result of adaptation.”

Another PREPARE indicator squarely focuses on the amount of investment mobilized for climate change adaptation. This relates to the important concept of leveraging investment. Beyond using its leadership position to encourage other bilateral and multilateral donors to step up contributions to support adaptation in developing countries, U.S. government engagement of private sector businesses is key. The Biden administration wisely sought to do this through a Call to Action to the Private Sector at COP27. That effort prompted a dozen companies to step forward over the past year as founding participants pledging efforts to develop or expand business offerings related to climate-smart food system innovations, resilience-focused financial services, and climate information and early warning systems.

A couple of the corporate commitments also connect to potentially promising insurance solutions. Better application of risk capital markets is itself a private sector leveraging adaptation that can serve to reduce anticipated losses associated with climate change damage. The UNEP’s Adaptation Gap Report 2023 references a study estimating that damages in the 55 most climate vulnerable economies exceeded $500 billion over the past two decades alone while also indicating that such costs would rise dramatically in future decades without significant progress on mitigation and adaptation. Through prearranged risk-sharing systems (such as insurance, catastrophe bonds and other financial guarantees) involving pools of capital to stem devastating losses across diverse geographies, the costs of contending with direct and indirect losses can drop significantly. Public funds can cover the price of premiums while leveraging private markets. As a University of Cambridge modeling exercise recently showed, a $1 billion annual investment in pre-arranged facilities could yield $25 billion in finance to address high priority responses in the face of significant climate shocks. The Biden administration has hinted that its announcements at COP28 will likely involve even more private sector companies joining the PREPARE call to action. That could be another promising development that helps galvanize this important U.S. bilateral assistance effort focused on addressing the impacts of climate change.

Noam Unger is a senior fellow with the Project on Prosperity and Development and serves as the director of the Sustainable Development and Resilience Initiative at the Center for Strategic and International Studies in Washington, D.C.

The author would like to thank Madeleine McLean for her research support.

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Noam Unger
Director, Sustainable Development and Resilience Initiative and Senior Fellow, Project on Prosperity and Development