Thailand and Asia as a whole are on the frontline of climate change and face huge financial challenges in adapting to its impacts. Bangkok, built on once-marshy land about 1.5 metres (five feet) above sea level, is projected to be one of the world's hardest hit urban areas by climate change impacts, alongside fellow Southeast Asian behemoths Jakarta and Manila. “We live in an era of man-made climate change. As temperatures rise, abnormal weather patterns such as more powerful cyclones, erratic rainfall, and intense droughts and floods are predicted to worsen over time. Investments today in better preparation can pay dividends both for the present and for the future,” said Professor Dr. Ulf Moslener, Head of Research at the Frankfurt School-UNEP Collaborating Centre for Climate & Sustainable Energy Finance. Frankfurt School of Finance & Management, together with its FS-UNEP Collaborating Centre has focused on research identifying existing barriers to financing, recommendations for developing policies and providing advisory services to international clients for climate-friendly solutions and their financing.
Finance for adaptation and resilience still largely depends on grant funding from public sources. Yet, public funds could be invested more effectively, maximising its volume and impact. “We found that private-sector involvement in adaptation remains limited. There was a limited human resource capacity in many developing countries which we considered an important constraint in accessing adaptation finance. There are not enough experts conducting policy relevant research on adaptation finance in terms of data analyses, good-practice project preparation and the development of viable business models. In addition there are difficulties in accessing accurate information on adaptation financing, policies and actions; and in identifying the appropriate funds and how to access them,” says Dr Bhim Adhikari, Senior Specialist from the International Development Research Centre (IDRC) in Canada.
As a response, the Adaptation Finance Fellowship Programme (AFFP) a joint programme of Frankfurt School and Thailand Development Research Institute Foundation (TDRI), financed by IDRC, was set up in 2016. Until 2020, the AFFP supports and promotes 36 young and mid-career professionals in climate adaptation finance.
“To get the adaptation-related policies right and create facilities, we need to bridge the divide between research on the financial and economic elements of climate adaptation with the practical realities of business and policy making. The combination of all three perspectives makes it more likely that good ideas will be put into action, necessary to create a global network of adaptation (finance) ambassadors,” adds Mark Redwood, AFFP advisory committee member and Executive Vice President from Cowater International.
Over the last 18 months, the first 18 private sector representatives, policymakers and researchers from five different continents were trained online as well as during workshops in Frankfurt, Germany, and Bangkok, Thailand. “It is important to equip these professionals not only with complex technical know-how, but also communication and leadership skills to allow them to implement their innovative ideas and to learn from each other, the future game changers and leaders for a more climate-resilient world,” says Dr Barbara Drexler, Director of the AFFP and Associate Dean of International Affairs at Frankfurt School of Finance & Management, a business school with a long track record in developing tailored finance and leadership programmes for professionals around the globe.
But how can innovative ideas touch ground? “Within AFFP, young researchers from the global south receive a grant to do innovative research on how farmers finance their adaptation strategies. More important, the AFFP provides them with forums do discuss their research findings and exchange their ideas with other fellows supported by internationally acknowledged professors. This enables them to identify new trends and approaches for climate-resilient growth and to profit from each other’s experience,” says Dr Nipon Poapongsakorn, Research Director of the AFFP and Distinguished Fellow at the Thailand Development Research Institute. And the approach pays off: With support from IDRC, four of the AFFP researchers presented their findings to the wider adaptation community during the biannual Adaptation Futures 2018 conference in Cape Town, South Africa in June 2018. Other fellows made significant progress in their career development, by making existing microfinance products more climate-smart and -resilient, by filling higher and more influential positions in national government, or by joining international major players, such as the Green Climate Fund (GCF). “Too see the impact the programme can have, and the motivation, spirit and commitment of the young AFFP fellows shows us that we are on a good way and that we are doing things right,” Dr Poapongsakorn confirms.
The latest success of the AFFP is the new cooperation with the Thailand Research Foundation (TRF) and the Bank for Agriculture and Agricultural Cooperatives (BAAC). In the following 18 months, TFR will send and finance up to two additional research fellows to the second round of the AFFP. “By entering into a cooperation with the prestigious institutions behind the AFFP, we would like to further advance the topic of adaptation finance in our country,” states Associate Professor Dr. Chanathip Pharino, Director of Well-Being Divison at the Thailand Research Fund (TRF). “Our goal is to support individual endeavors, to enhance knowledge-sharing in climate adaptation finance and to assist in the development of Thai researchers to strengthen our local community.”
“For several years, we have been facing challenges with the changing weather patterns, caused by a changing climate,” explains Apirom Sukprasert, President at BAAC, an important player in Thailand as well as in the South-East Asian region. BAAC is already active in climate adaptation finance, providing loans and subsidised weather-index-based insurance to farmers and supporting them with technical advice to make their business less climate vulnerable. “This has not only a significant impact on our clients, mostly smallholder farmers, but also on our overall loan portfolio. In 2017 alone, we have received more than 2.5 Billion Baht of insurance fees from farmers and government subsidies. We realise that it is urgent and necessary to invest in human capital and strengthen the skills needed to lead in this uncertain times. We appreciate the opportunity to send one of our staff to the AFFP. We hope this will not only provide our colleague with substantial knowledge and skills, but also give us some further ideas on how we can shift our institution to the next level and become a forerunner in the region in terms of climate-resilience.”