Editing IPCC:AR6/WGII/Chapter-3 (section)

===== 3.6.3.3.2 Economic dimensions (planning, finance, costs) =====

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Finance is a key barrier globally for ocean health, governance and adaptation to climate change ( ''high agreement'' ) (Annex II: Glossary; Cross-Chapter Box FINANCE in Chapter 17; [[#Hinkel--2018|Hinkel et al., 2018]] ; [[#Miller--2018|Miller et al., 2018]] ; [[#Wabnitz--2019|Wabnitz and Blasiak, 2019]] ; [[#Woodruff--2020|Woodruff et al., 2020]] ; [[#Sumaila--2021|Sumaila et al., 2021]] ). Global adaptation finance was estimated to total 30 billion USD yr –1 in 2017–2018, or 5% of all climate finance ( [[#CPI--2019|CPI, 2019]] ), with no tracking specifically for coastal or marine adaptation in low- to middle-income countries. Marine-focused adaptation finance is difficult to trace and label due to the cross-sectoral nature of many projects ( [[#Blasiak--2018|Blasiak and Wabnitz, 2018]] ) and the lack of clear definitions about what qualifies as adaptation or as new and additional finance ( [[#Donner--2016|Donner et al., 2016]] ; [[#Weikmans--2019|Weikmans and Roberts, 2019]] ). Finance for marine conservation from Overseas Development Assistance doubled between 2003 and 2016, reaching 634 million USD in 2016, similar to the level provided by philanthropic foundations ( [[#Berger--2019|Berger et al., 2019]] ). Yet coastal adaptation to SLR alone is projected to cost hundreds of billions of USD yr –1 , depending on the model and emission scenario (e.g., [[#Wong--2014|Wong et al., 2014]] ; [[#Nicholls--2019|Nicholls et al., 2019]] ). Economic and financing barriers to marine adaptation are often higher in low- to middle-income countries, where resources influence governance and constrain options for implementation and maintenance ( ''high confidence'' ) ( [[#Hinkel--2018|Hinkel et al., 2018]] ; [[#Klöck--2019|Klöck and Nunn, 2019]] ; [[#Tompkins--2020|Tompkins et al., 2020]] ), and impacts on their coastal and marine ecosystems could total several percentage points of their gross domestic product ( [[#Wong--2014|Wong et al., 2014]] ). Current financial flows are insufficient to meet the costs of coastal and marine impacts of climate change ( ''very high confidence'' ) and ocean-focused finance is unevenly distributed, with higher flows within, and to, developed countries ( ''very high confidence'' ).

Development assistance can help resolve resource constraints, but additional governance and coordination challenges can arise from short-term, project-based funding, shifting the priorities of donor institutions and the pressures placed on human resources in the receiving nation ( [[#Parsons--2019|Parsons and Nalau, 2019]] ; [[#Nunn--2020|Nunn et al., 2020]] ). Innovative policy instruments, such as concessional loans, tax-policy reforms, climate bonds and public-debt forgiveness, can supplement traditional financial instruments ( [[#Bisaro--2018|Bisaro and Hinkel, 2018]] ; [[#McGowan--2020|McGowan et al., 2020]] ). Mechanisms for solving the persistent problem of securing upfront investments for coastal protection and other adaptation measures ( [[#Bisaro--2018|Bisaro and Hinkel, 2018]] ; [[#Moser--2019|Moser et al., 2019]] ; [[#Kok--2021|Kok et al., 2021]] ) include integrating adaptation investments into insurance schemes ( [[#Reguero--2020|Reguero et al., 2020]] ) and using debt financing to bridge the time until benefits are realised ( [[#Ware--2020|Ware and Banhalmi-Zakar, 2020]] ). Insurance mechanisms that link payments to losses from a trigger event (e.g., MHW) can confer resilience to marine-dependent communities ( [[#Sumaila--2021|Sumaila et al., 2021]] ). All innovative financial instruments are most effective when they are inclusive and reach vulnerable groups and marginalised communities ( ''low evidence, high agreement'' ) ( [[#Claudet--2020a|Claudet et al., 2020a]] ; [[#Sumaila--2021|Sumaila et al., 2021]] ).

Countries with large ocean areas within their EEZs have opportunities to develop ‘blue–green economies’ to reduce emissions and finance adaptation pathways ( [[#Chen--2018a|Chen et al., 2018a]] ; [[#Lee--2020|Lee et al., 2020]] ). Shifting from grants to results-based financing can help attract more private capital to ocean adaptation ( [[#Lubchenco--2016|Lubchenco et al., 2016]] ; [[#Claudet--2020a|Claudet et al., 2020a]] ). Public–private partnerships can also increase ocean adaptation finance ( [[#Goldstein--2019|Goldstein et al., 2019]] ; [[#Sumaila--2021|Sumaila et al., 2021]] ). For example, the financial benefits that biodiversity conservation confers to seafood harvest resilience could be used to leverage industry participation in adaptation and conservation finance ( [[#Barbier--2018|Barbier et al., 2018]] ). Connecting restoration of blue carbon ecosystems with offset markets (e.g., [[#Vanderklift--2019|Vanderklift et al., 2019]] ) shows potential, but uncertainties remain about the international emissions trading under the UN Framework Convention on Climate Change and climate impacts on blue carbon ecosystems ( [[#3.6.3.1|Section 3.6.3.1.6]] ; [[#Lovelock--2017a|Lovelock et al., 2017a]] ; [[#Macreadie--2019|Macreadie et al., 2019]] ).

Transparency, coherence between different actors and initiatives, and project monitoring and evaluation enhance success in adapting and achieving SDG14 (Life Below Water) ( [[#Blasiak--2019|Blasiak et al., 2019]] ). Maladaptation (WGII Chapter 16; [[#Magnan--2016|Magnan et al., 2016]] ) is a common risk of current project-based funding due to the pressure to produce concrete results ( ''medium confidence'' ) ( [[#Parsons--2019|Parsons and Nalau, 2019]] ; [[#Nunn--2020|Nunn et al., 2020]] ; [[#Nunn--2021|Nunn et al., 2021]] ). Maladaptation can be avoided through a focus on building adaptive capacity, community-based management, drivers of vulnerability and site-specific measures ( ''low confidence'' ) ( [[#Magnan--2018|Magnan and Duvat, 2018]] ; [[#Piggott-McKellar--2020|Piggott-McKellar et al., 2020]] ; [[#Schipper--2020|Schipper, 2020]] ). More research is needed to identify ways that governance and financing agreements can help overcome financial barriers and sociocultural constraints to avoid maladaptation in coastal ecosystems ( ''high confidence'' ) ( [[#Hinkel--2018|Hinkel et al., 2018]] ; [[#Miller--2018|Miller et al., 2018]] ; [[#Piggott-McKellar--2020|Piggott-McKellar et al., 2020]] ; [[#Schipper--2020|Schipper, 2020]] ).

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