Climate Vulnerability Reduction Credits
Opportunities for Foundations, Corporations, and Developers
Climate Change is a constraint we all face. It is time to elevate this constraint to a higher ground level. A paradigm shift in climate policy is overdue. The logical and human response to the impact of climate change is preparatory climate adaptation.
Higher Ground has published a paper on the VRC™ concept in the leading, peer-reviewed academic journal Climate Policy accessible here.
Climate Change, its causes and impacts have been and continue to be on the agenda worldwide. However, disillusionment with the post-Kyoto process is rapidly growing due to limited commitments from participating countries, the seemingly unsurpassable lock up in the international negotiations, the unwelcome administrative burden of emissions accounting, monitoring and verification that is expected of countries and businesses, frameworks that don't suit different national circumstances and the lack of progress in real emission reductions.
Even assuming good progress reducing emissions, most studies show that between $50 and $300 billion per year is required for developing countries to adapt to climate change. The challenges in raising these funds are daunting. And very few approaches on the table seem likely to adequately identify, deploy, and incentivise sustainable adaptation. The norm tends to be proposals for top-down, payment-first funds and a hazy call to "leverage private finance". While a good start if implemented, the Cancun agreements target $100 billion in climate finance: emission reductions, forest protection, and adaptation. However, if you look at the money on the table so far, less than 15% is for climate adaptation.
There is one innovative solution that addresses all of these concerns. Climate Adaptation Works is developing The Higher Ground Foundation (Higher Ground) that addresses and facilitates the potential for private finance and incentives to identify, develop and maintain the most effective projects that reduce the vulnerability of the poor to climate change.
Higher Ground's vision is to create a sustainable market to finance, develop and build climate adaptation projects.
|What we do||What we do not do|
|Managing a not-for-profit organization||Maximise shareholder value|
|Create a finance mechanism for climate adaptation in developing countries||Compete with emission reduction efforts|
|Apply the sustainability framework in all our actions||Push specific project types, technologies, or programs|
|Approve projects, award vulnerability reduction credits, and overall governance of the market||Develop, invest, or own projects|
|Commission research on scaling-up the market||Pursue academic or business research or consulting|
|Communicate the need for pro-poor, accountable but flexible climate adaptation||Perform public relations for specific national or business interests|
The key part of the Higher Ground concept is what we call a vulnerability reduction credit (VRC™) awarded over time after demonstrating sustained delivery of vulnerability reduction. Aspects of this scheme include clear baseline and monitoring regimes and a review and governance system that encourages transparency, accountability, and private innovation.
Higher Ground is developing a market scheme that will develop these concepts in a voluntary market. To participate in such market is a practical way for companies to demonstrate their interest in directly combating the impacts of climate change in vulnerable communities, while showing they are leaders in innovative climate adaptation finance. In other words, it gives companies a chance to take climate action that directly reduces the vulnerability of those who are impacted by climate change today and in the future.
Higher Ground will facilitate the creation of multiple new businesses and products such as in project development, engineering, insurance, consulting, brokerage and investment and VRC™ exchanges. We expect to be initially funded by selected supporters with a view to become self sustainable once we are in action.
Both foundations and private companies may play a number of roles in Higher Ground, from becoming a leader in the development and/or purchasing of VRCs™ to offset its emissions, to providing thought-leadership by supporting efforts to assess the schemes scaling up to tackle the daunting challenges in financing adaptation. They could also serve as project developers for projects in vulnerable communities in return for VRCs™ or covering developers and investors in VRC™ generating projects.