Already in the early stages of the EU Taxonomy I was specifically interested in the adaptation criteria. And also a bit worried how companies would succeed to use them. For me they seem somewhat complicated without clear thresholds such as those included in the mitigation criteria. When the EU taxonomy was being formulated, adaptation didn’t gather significant attention.

I’m thankful for a true adaptation specialist Maaria Parry who recommended this analysis of adaptation taxonomies (written by University of Oxford experts) to me. Climate adaptation is a must whether we want it or not.

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4874598

Here are some main points of the analysis which I find important.

• There are 24 adaption taxonomies published in the last four years
• Growing adaptation finance gap is around 194-366 billion USD per year
• The lack of understanding and standardized definitions of what is and is not adaptation is one of the barriers to adaptation finance
• A difference to mitigation is that adaptation is location-specific and dynamic and requires a process-based component

In the analysis some common features and differences of the 24 adaptation taxonomies are pointed out.

• Taxonomies include typically activities that are adapted and activities that enable adaptation
• Some include even a third type of activity, activities that share goals with adaptation and development
• Certain principles are common, such as risk assessment, DNSH, plans and targets
• The least mentioned principle is alignment with net-zero
• Some taxonomies include a list of eligible activities and some not
• There is also variation in the sectoral coverage, eg the EU Taxonomy misses some sectors relevant for adaptation, such as agriculture

As recommendations the analysis suggests clear international principles for taxonomy development, richer lists of eligible activities and through forming a global inventory of adaptation investments addressing the question ’what is an effective adaptation intervention for a specific climate-related risk and specific asset type?’

Thanks for an interesting paper and I recommend all interested in climate risks, resilience and adaptation to read this and pay attention to finance taxonomies possible role in making our societies and businesses more climate resilient. Still a lot to achieve there I guess.

#eutaxonomy #taxonomy #adaptation #resilience #sustainablefinance #comparison #futuredevelopment #climate