Saturday, November 12, 2022

U.S. Center Sharm el-Sheikh, Egypt

ADMINISTRATOR POWER: That's very nice – unexpected way to start the morning. Thank you, Jay. Thanks for your leadership the leading role that the LightSmith Group is playing in fueling private sector investment in adaptation.

I want to also thank USAID’s very own Lindsey Doyle, without whom this event would not be happening. The announcements that you are going to be hearing from various leaders today, are directly the result of work that Lindsey and the team kicked off over the past year. 

I want to thank in advance, Brian Deese, my friend and President Obama's top – President Biden's top economic advisor. He was also President Obama's senior climate lead and senior economic advisor for a very long time before that. Brian is helping steer America through pretty severe economic headwinds. But, one of the many things that I admire about Brian is he never loses sight of the human consequences of those headwinds, domestically and globally, and never loses sight also of the needs that exists out there in developing countries specifically. And, as I'll talk about the adaptation needs, of course, are very severe. 

One of the great features of America's leadership at this climate conference is to be able to give additional attention to the inflation Reduction Act and the $368 billion American investment in combating climate change – historic investment. I just want to thank Brian, personally, for the role that he played in helping negotiate that legislation –  in shepherding that through – many people were prepared to give up along the way, not Brian, and he's a major reason that we are in the position that we are in now – getting to catalyze investments of an unprecedented scale in the United States. So thank you so much, Brian, on behalf of my children, thank you. 

One of the most searing experiences that I have had since becoming Administrator of USAID was in September of this year, visiting Pakistan just after the country's epic flooding. And to understand the scale of disaster, I got in the helicopter, flew over the southwestern part of the country, and witnessed what was happening on the ground in Sindh province – one of the poorest provinces in Pakistan with some of the lowest per capita emissions of greenhouse gases on planet Earth.

And to fly over and to think – I must be flying over ocean, I have to be flying over – this is ocean right, or this is like the largest lake in the world – no, this is land covered in water – a third of Pakistan covered in water. This was 300 kilometers from the Indian Ocean and you could never have guessed it – if you had that visual. Fierce, unprecedented monsoon storms combined with glacier melt, resulted in the ravaging of this landscape, including farmlands that were just poised for harvest – 1,700 people have died, a miraculous number given the scale of the damage, two million homes destroyed, 19,000 schools washed away. 

And Foreign Ministers Zardari, I know, told this story movingly, here, earlier in the week. What you may not know – because the story I've just told and he's told is broadly known, is that some buildings actually withstood those floods – serving as shelters in the worst hit areas. Those buildings were state of the art disaster resilient-coded buildings – schools built by USAID and the Pakistani government after the last devastating flood in Pakistan, back in 2010. 

These – small consolation I know, but proof of concept – these are schools that can now operate today. They don't have to be rebuilt. They don't have to be shut down, entirely. 19,000 schools washed away – decimated – but not these schools. And, that means that they will not also absorb any of the $56 million in flood relief and humanitarian assistance that the U.S. has provided Pakistan. We don't have to eat into those scarce resources to rebuild schools, because they were built to adapt to climate change in the first place. 

Climate change is causing, as you well know, more humanitarian disasters around the world each day, at a rate that governments and humanitarians cannot keep up with. Damage caused by weather-related disasters last year was around $30 billion in developing countries. But to give you a sense of how much worse this is getting – every day it feels – those floods in Pakistan, may themselves, alone, entail $30 billion in damages. 

The total of all global humanitarian assistance, for all kinds of crises – not just climate emergencies – is $31 billion a year, and that's in a good year. That's if we can sustain that funding, notwithstanding the domestic effects of climate change, and the demands on domestic resources, and that $31 billion in recent years has gone mainly to needs resulting from conflict and not climate – at least not climate in the first instance – what feels like conflict but may in fact date back to climate, in any event.

As the cost of climate related losses continue to increase, they will begin to swallow up – this is so critical – not just our humanitarian aid budgets, but eventually our development budgets, as well. And that matters, of course, for the private sector. But nearly $150 billion that donor countries use to invest in economic growth, in public health, in agriculture, in education, in poor countries. Unless we help countries adapt to a changing climate, help their infrastructure stand up to storms and heat waves, help their crops to grow amid droughts and floods, help their people survive climate disasters – there may be no more foreign aid, only climate aid. That's where we're heading, at present. 

That is why President Biden unveiled his emergency plan for adaptation and resilience – or PREPARE at last year's cost – to bring together all the tools of the U.S. government, to help more than a half a billion people adapt and manage the impacts of climate change, to establish early warning systems that can save lives during natural hazards, to harness climate data, to boost crop yields, to help countries develop specific plans on how they intend to adapt to climate change – so, they are in charge of their own adaptation agendas, and importantly, to marshal capital in support of adaptation. 

As President Biden said yesterday, he is completely dedicated to working with Congress to deliver $3 billion a year by 2024 for PREPARE, and he announced $150 million for adaptation initiatives – specifically, currently in Africa. 

But the U.S. government has never been the whole of what the United States of America can offer the world. And the world's governments combined will never be able to keep up with adaptation needs for climate change on their own. Current adaptation needs in the developing world are set to be around $70 billion. By the end of the decade, though, they are likely to grow to as much as $340 billion in adaptation needs. 

And I don't know about you know – other country's domestic politics, but the odds of mobilizing a healthy U.S. share of $340 billion for adaptation assistance – very, very unlikely – as we are witnessing today with a revolution in green energy installation, largely fueled by your dollars, by private dollars – we need the private sector. The world needs the private sector to invest in adaptation. And yet, as you well know, the share of private sector dollars spent on climate adaptation, right now, is marginal. The most recent data suggests it is under 2% and most of that adaptation finance is actually going to wealthy countries – to help wealthy countries adapt. 

Most of the conversation around increasing that percentage has, if we're honest, bordered on occasional hectoring – that companies are raking in short term profits without considering long term consequences, that companies are largely greenwashing – doing just the bare minimum they need to protect their reputations, that companies have a moral obligation to help countries adapt to climate impacts that are now irreversible. 

Now, there are elements of truth, indeed deep truths in some of that. But when it comes to oil companies and others that have spent decades racking up profits while fueling carbon pollution into the air unchecked, we have to say right up front that those arguments are correct. 

Big Oil needs to step up. The President makes this point all the time. They need to aggressively transition from oil and gas to renewable energy – of course, as Secretary Kerry drives home every minute of every day. But they also need to invest in addressing the climate damage that at this point is inevitable – damage that they have helped fuel. But, while that kind of moral rhetoric has appeal and can lead to real change, and is a necessary complement to the kind of discussion we're having here today, it can't be our only tactic. 

The fact is, that government also hasn't done enough to bring the private sector to the table on adaptation – to wield carrots and not just sticks, to reduce the risks that companies face for investing in high impact work, to make the business case for adaptation, to engage in regulatory reform that makes adaptation, again, seem like a smart business decision and not just an act of charity. 

That is why the United States has worked with insurance companies to create profitable regional risk pools in the Sahel that allow partner governments to secure drought and disaster payouts for their farmers. 

That is why we have launched the climate finance and development accelerator to reduce the risk that companies face when investing in adaptation. That's why we've partnered with LightSmith to crowd investment in adaptation startups and finance market studies, to create a pipeline of adaptation projects that can yield profits for investors. 

It's why we poured money into R&D of drought tolerant seeds and worked with both American and partner country companies to help distribute those seeds to smallholder farmers. 

It's why we are literally putting institutional investors and pension fund managers on planes and sending them to Africa to break down risk perceptions and expose these individuals and these investors to meaningful opportunities for profit, and for investment. 

It is why today, right here, we are announcing a new Call to Action for private sector investment in adaptation. Our goal is to create the same kind of energy for climate adaptation commitments, as we have seen around cutting the emissions that have brought us to this juncture, to create the adaptation equivalence of net zero pledges – that is our goal. 

Today, you will hear from a number of first mover companies that span the global economy – corporations like Google, MasterCard, WTW and Microsoft – companies that have come forward with significant adaptation commitments. Commitments like expanding access to climate data, new financial and insurance products that can protect the poor and innovate to make agriculture more productive and less dirty. 

Our hope is that today marks a wave of broader private investment in adaptation not just from big global corporations, but from small and medium-sized companies based in the developing world – from startups and young entrepreneurs, from foundations, institutional investors and asset managers. Anyone interested in joining our Call to Action can work with our official partner the Global Resilience Partnership, representatives of whom are here with us today – raise your hands. Yeah, okay. Remember their faces? Find them. These are people who can sit down with you and help shape your goals – from cutting down water usage, to increasing the resilience of your supply chains, to exploring new opportunities for investment – for profitable investment in settings at risk of significant climate impacts. 

Bank of America predicts that climate adaptation will swell to a $2 trillion industry in the next five years. We want to help you get in on the ground floor, and in so doing, help billions around the planet from schoolchildren in Pakistan, to pastoralists facing drought in East Africa, to indigenous tribes growing cocoa at the margins of our world's forests, to prepare for what we know is upon us and what more we know is to come. 

Thank you so much.


Climate Change

Samantha Power
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