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F
unding to prepare low-lying delta areas for
the impact of climate change is available
from financial institutions such as the World
Bank and the Asian Development Bank, or
from funds such as the Green Climate Fund.
These organisations are happy to invest in
projects of this kind but applicants do need to present
strong arguments.
‘The problem with making adaptation projects
bankable is that flood protection is a public good.
Investments in the required infrastructure don’t
immediately result in products or services that you
can sell’, explains Cees. ‘Even so, the investment has
to be paid back, preferably with interest.’
Secondary benefits
Start by looking at who benefits most from the
investment, is his advice. ‘You could ask the people
exposed to the risk to contribute, either in financial
terms or by investing their labour. You could also look
at the secondary benefits. Planting a mangrove forest
to protect the coast creates fish breeding grounds
at the same time. Fishermen benefit and so they
could also pay some of the costs. The same applies
to people who take twigs from the forest to make
baskets.’
Quite often, it is possible to earn money by combining
functions. A dam in a river to protect the downstream
areas from flooding also creates a water reservoir that
can be used to irrigate agricultural land. That same
dam can also be used for the production of electricity
or for drinking water.
That is not a straightforward process. ‘Government
authorities, but also financial institutions and funds,
often have rules that make it impossible to transfer
money from one sector, such as agriculture, to another.
However, it can be done if you implement an integrated
overall project as separate projects that you finance
individually.’
Failure probability
It can sometimes be difficult to state the economic
benefits of natural solutions in monetary terms,
explains Cees. Not infrequently, financiers believe
wrongly that natural solutions are more likely to
fail than ‘concrete’ measures and so they ask for a
higher rate of interest. ‘You can only get round that by
establishing without doubt that the failure probability
is the same and that the secondary benefits are
greater. Deltares can help here. We can calculate failure
probabilities for mangrove forests, sand dunes or a dike
with asphalt cladding.’
There is more than enough money to cover investments in climate
adaptation, says Cees van de Guchte, the head of the climate adap
tation and risk management department at Deltares. But we have
to convince banks that there will be a return on an investment, and
that isn’t always straightforward.
BY JOOST VAN KASTEREN
‘FINANCIERS WANT
GUARANTEED
RETURNS’
15
DELTARES, SEPTEMBER 2015