Linking Market Systems and Climate: Resources from Marketlinks and Climatelinks

This blog was originally posted on Climatelinks as a collaboration during COP28.

Some of today’s programming at COP28 is focused on finance and trade. Climate change presents enormous economic opportunities and challenges. For developing countries whose economies largely depend on natural resources, shifts in climate are potentially devastating. Investments in the green economy, such as renewable energy, clean transportation, climate-smart agriculture, and resilient infrastructure, are both economically beneficial and necessary. 

USAID emphasizes the need to mobilize climate finance from both global public and private sources to reach the level needed to achieve the goals of the Paris Agreement. USAID’s 2022-2030 Climate Strategy aims to catalyze public and private finance to underserved countries, sectors, and populations through efforts that convene, co-invest, de-risk, and catalyze private and public finance to where it can be most effective, and address systemic constraints in climate change mitigation and adaptation efforts.

Given this connection between market systems and climate change, Marketlinks and Climatelinks are highlighting some resources that explore the issue in depth. Climatelinks is USAID’s global knowledge portal for climate and development practitioners. Climatelinks curates and archives technical guidance, events, blogs, photos, and other knowledge related to USAID’s work to help countries mitigate and adapt to climate change.

Here are some climate-related resources on to help market systems development practitioners understand how their work intersects with climate change programming.

USAID Progress on Climate Finance Fact Sheet 

To address the funding gap in climate finance, USAID has launched or joined a variety of efforts across the U.S. Government and with private sector partners. These efforts include the President’s Emergency Plan for Adaptation and Resilience, which seeks to increase financing for more than 500 million people in partner countries to adapt to and manage the impacts of climate change through locally-led development; the Climate Finance for Development Accelerator, a mechanism to leverage up to $250 million over eight years which in turn will seek to mobilize $2.5 billion of private sources of finance for adaptation and mitigation by 2030; and a pledge at the Climate Leaders Summit in April 2021 to double private sector investments in adaptation and resilience in 20 climate-vulnerable countries.

Climate Change, Economic Production, Inequality, and Poverty 

Climate change is widely understood to be a significant driver of future patterns of human well-being around the world, jeopardizing the food sources and livelihoods of the poorest and most vulnerable people, reducing economic growth, and increasing inequality and poverty. While these relationships are generally accepted in the academic literature, few have quantified the impact of climate change on future levels of poverty across different income thresholds and scenarios. This paper seeks to fill that gap, modeling the impact of climate change on future patterns of human poverty across various thresholds and scenarios by drawing on representative concentration pathway scenarios that model alternative patterns of temperature change at a national level.