Climate adaptation may bring China $8.1b investment opportunities by 2030

The estimated minimum climate adaptation investment required by 2030 in a 1.5 C warming scenario is $8.1 billion (54.4 billion yuan) for China, said a study report recently issued by Standard Chartered.

The study examines the need for adaptation investment in 10 developing markets – Bangladesh, China, Egypt, India, Indonesia, Kenya, Nigeria, Pakistan, the United Arab Emirates and Vietnam – and explores the current appetite for this particular type of investment among global banks, asset managers and investors.

These markets are among those where action is critical, either because of their size and contribution to global or regional economies, or because of their greater risk of exposure to negative climate effects, the report said.

India ranked top among the 10 markets in terms of the estimated minimum adaptation investment required by 2030 in the 1.5 C warming scenario, with the figure reaching $10.6 billion, which was followed secondly by China. Indonesia came in third place with $4 billion.

China is one of the markets in the Standard Chartered study less at risk of climate damage under the 1.5 C warming scenario, explaining its relatively low requirement for adaptation investment as a proportion of GDP, the report said.

At the same time, China's economic strength and historically strong investment in climate adaptation drives an economic benefit of $14 for every one dollar invested – one of the highest in the study.

To gauge the global financial community's appetite to finance climate adaptation projects, Standard Chartered surveyed 150 prominent bankers, investors and asset managers and found that currently just 0.4 percent of their capital is allocated to adaptation projects in emerging markets.

According to the survey, nearly 60 percent of the respondents plan to increase their adaptation investments over the next 12 months.