Edited by Sam Fankhauser and Thomas K.J. McDermott
Chapter 5: Locking in climate vulnerability: where are the investment hotspots?
Simon Dietz, Charlie Dixon and John Ward 5.1 INTRODUCTION Hundreds of billions of dollars are invested annually in countries vulner able to climate variability and change. In 2013, gross investment in the Least Developed Countries totalled about $205 billion, for instance, or about 25 per cent of their gross domestic product (GDP) (World Bank, 2014c). These countries, and others that support them, have a strong interest in ensuring investment is resilient to climate change. The most straightforward concern is that the direct economic, social and environmental returns on investment could be negatively affected by climate change. But, in addition, there is a concern that some investments could indirectly increase climate vulnerability (Klein et al., 2007), for example, road building that attracts development to vulnerable areas. From the point of view of ex ante appraisal, climate- esilient investment r is easier in some cases than others. Sometimes the primary purposes of the investment are well aligned with building resilience to climate change, for example, where the investment is intended to reduce vulnerability to current climate variability and this increases resilience to future climatic conditions too, or where the investment is intended to reduce poverty and this reduces climate vulnerability (McGray et al., 2007). In other cases, the project duration is just too short to make future climate a central concern. But some investments are long- ived and their net present value depends l on returns over many years, for instance, various kinds of major infrastructure project. These investments also typically require...
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