Editing IPCC:AR6/WGIII/Chapter-15 (section)

=== Box 15.3 | Mitigation, Adaptation and Other Related Climate Finance Merit Joint Examination ===

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Mitigation finance deals with investments that aim to reduce global carbon emissions, while adaptation finance deals with the consequences of climate change ( [[#Lindenberg--2013|Lindenberg and Pauw 2013]] ). Mitigation affects the scale of adaptation needs and adaptation may have strong synergies and co-benefits as well as trade-offs with mitigation ( [[#Grafakos--2019|Grafakos et al. 2019]] ). If mitigation investments are inadequate to reducing global warming (as in the last decade) with asymmetric adverse impacts in lower latitudes and low-lying geographies, the scale of adaptation investments has to rise and the benefits of stronger adaptation responses may be high ( [[#Markandya--2019|Markandya and González-Eguino 2019]] ). If adaptation investments build greater resilience, they might even moderate mitigation financing costs. Similar policy coherence considerations apply to disaster risk reduction financing, the scale of which depends on success with both adaptation and mitigation ( [[#Mysiak--2018|Mysiak et al. 2018]] ). The same financial actors, especially governments and the private sector, decide at any given time on their relative allocations of available financing for mitigation, adaptation and disaster-risk reduction from a constrained common pool of resources. The trade-offs and substitutability between closely-linked alternative uses of funds, therefore, make it essential for a simultaneous assessment of needs – as in parts of this chapter. Climate finance versus the financing of other Sustainable Development Goals (SDGs) faces a similar issue. A key agreement was that climate financing should be ‘new and additional’ and not at the cost of SDGs. Resources prioritising climate at the cost of non-climate development finance increase the vulnerability of a population for any given level of climate shocks, and additionality of climate financing is thus essential ( [[#Brown--2010|Brown et al. 2010]] ). Policy coherence is also the reason why mitigation finance cannot be separated from consideration of spending and subsidies on fossil fuels. Climate change may additionally cause the breaching of physical and social adaptation limits, resulting in climate-related residual risks (i.e., potential impacts after all feasible mitigation, adaptation, and disaster risk reduction measures have been implemented) ( [[#Mechler--2020|Mechler et al. 2020]] ). Because these residual losses and damages from climate-related risks are related to overall mitigation and adaptation efforts, the magnitude of potential impacts is related to the overall quantum of mitigation, adaptation, and disaster risk reduction finance available ( [[#Frame--2020|Frame et al. 2020]] ). All categories of climate finance thus need to be considered together in discussions around climate finance.

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