The role of private, public and “angel” investors in building resilience in the face of the uncertainties facing the urban poor in relation to climate change is a central problem of cities where the bulk of the population are below the poverty line and subsisting from day to day with no reserves to face even the smallest setback, is crucial to the survival of the entire population. In a large scale disaster the problems of global supply chains and their ‘just-in-time’ delivery ethos will impact the rich in their gated communities just as much as the poor as the supermarkets shelves empty within a few hours and supplies of fuel at the pumps is used up see Japan: Two Perspectives after Disaster (via Encountering Urbanization)
If a wealthy country like Japan must appeal for international donor aid for the victims of a natural disaster, see“Please help Japan” – Tokujin Yoshioka via dezeen
then what can we expect of the barely surviving economies and totally failed countries of the global South? See Rebuilding after Japan’s Earthquake and Tsunami (via Encountering Urbanization)
Here Stefan Pellech of Intellecap discusses the problems and opportunities in beyond profit:
Intellecap, publisher of Beyond Profit, partnered with the Rockefeller Foundation and the Asian Cities Climate Change Resilience Network (ACCCRN) to explore opportunities for the private sector in building resilience of the urban poor against the impacts of climate change. Our work focused on understanding the specific vulnerabilities of the poor in four cities – Surat and Gorakhpur in India, Semarang in Indonesia and Chiang Rai in Thailand – and identifying potential business responses to these.
Resilience-building businesses provide products and services that improve infrastructure, access to scarce resources and basic services such as healthcare, finance, availability of information that aids in disaster preparedness and livelihood promotion to enhance income or improve cash flow predictability. The nine key sectors within which opportunities exist, are micro-insurance, affordable healthcare, waste management and sanitation, water management, affordable housing, off-grid renewable energy, microfinance, information and communication technology and livelihood promotion.
As climate-linked vulnerabilities are largely localized, business responses will require local innovation, reducing their ability to be replicated rapidly. Given the context specificity, social enterprises and community owned companies are likely to take the lead.
Low awareness of both issues and opportunities in building urban resilience has so far limited private sector involvement. As urban impacts of climate change are entangled with poverty and urbanization, it is hard to measure the extent of the changing climate and its projected impacts on the urban poor further inhibiting accurate product design. Funding for businesses in this field is also limited, as few existing funds focus on adaptation and resilience and, of these, most offer concessional debt and grants rather than equity.
Although private capital already funds bankable businesses across the key sectors identified, the challenge is to increase their focus on more vulnerable geographies and populations. Measures include creating a champion or nodal body to coordinate activities across stakeholders and market makers to support market development, bringing stakeholders together and fostering partnerships. Organizations will need to contribute guarantee funds, concessional debt, angel investments and venture capital with longer-term exit horizons to drive innovation, and social entrepreneurs will also require additional capacity building to successfully operate.
Photo credit: Flickr user Focx Photography