Eradicating the Ambiguity Around EbA: Upscaling EbA Finance

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In the 2024 Adaptation Gap Report, the United Nations Environment Programme (UNEP) reported adaptive financial needs of US$ 387 billion/year and modelled costs of US$ 215 billion/year towards developing countries until 2030 (in 2021 prices). These costs, when compared to the output in 2022 of US$ 27.5 billion/year, reveal a gaping cavity in financial support. To aid adaptation action, global narratives have increasingly embraced Ecosystem-based Adaptation (EbA) as a co-beneficial strategy addressing not just adaptation, but also loss and damages, mitigation, biodiversity preservation, and human development in the context of climate change. This multi-dimensional scope makes EbA a cost-effective strategy. While it can help alleviate some of the stress imposed by the lack of adaptation finance, it cannot do away with the problem. In fact, cross-cutting strategies are assigned even lower figures, leading to a shallower pool of funds reserved for EbA. Consequently, constrained financial flows towards EbA have been a recurring concern in climate discourse in recent years. To effectively scale up EbA, it is essential to first recognise its diverse benefits. 

The Ministry of Environment, Forest and Climate Change’s multi-stakeholder initiatives with the United Nations Development Programme, the International Centre for Integrated Mountain Development, the Global EbA Fund, and the Green Climate Fund have already made headway in improving climate resilience in coastal communities, mangrove restoration, and the incorporation of EbA in urban planning.

It is necessary to appreciate that India has already embarked on its EbA journey. Its cognisance of EbA’s advantages is visible through a study of its National and State Action Plans on Climate Change. The Ministry of Environment, Forest and Climate Change’s multi-stakeholder initiatives with the United Nations Development Programme, the International Centre for Integrated Mountain Development, the Global EbA Fund, and the Green Climate Fund have already made headway in improving climate resilience in coastal communities, mangrove restoration, and the incorporation of EbA in urban planning. Non-governmental Organisations have also been leading this movement in Maharashtra, Gujarat, Madhya Pradesh, and Telangana, to name a few states. Needless to say, EbA is gradually being woven into the fabric of climate adaptation in the country. Yet the progress has been dawdled and restricted. One reason for this is the clear insufficiency of funds disbursed towards EbA and cross-cutting projects. Yet there exist adjacent problems that need attention. These arise from a common theme of ambiguity regarding EbA use, applicability, and financial needs. When interacting with each other, these sources of ambiguity collectively obscure our understanding of the limitations of upscaling finances.

Exploring the Sources of Ambiguity

The lack of definitive understanding and universal establishment of EbA qualifications is an obvious source of ambiguity. Though international guidelines to help identify, categorise, and formulate EbA projects have already been established, they remain relatively unrecognised to be construed as standard practice. The definitive acceptance of EbA benefits, coupled with the obscurity around EbA criteria, is both a factor and an outcome of the lack of data and unstandardised evaluation metrics. Given varied EbA applications, absolute standardisation may be tricky. Yet, a complete lack of comprehensive methodologies directly adds to the ambiguity. 

While these factors certainly concoct a recipe for vagueness, the problem is not limited to the lack of awareness regarding what constitutes an EbA project. It also extends to the lack of insight into its areas of applicability. This is visible in the concentration of EbA projects in solely climate impact spheres, even though its integrative capabilities are its main selling point. The ability of EbA to address mitigative, adaptive, socio-economic, and biodiversity issues simultaneously indicates its collaborative potential. Nonetheless, its overt inclusion into developmental policies is still uncommon. Further, the inharmonious use of language in policy makes it even more difficult to identify climate activity in larger development action. Thus, we find poor visibility of EbA in sectoral policies at various levels. Such a lack of integration is a missed opportunity to raise awareness, propagate EbA use, and consequently attract financial support. 

Since ecosystem services are not categorically introduced, the precise level of EbA activity is indeterminate, thus failing to bring EbA to the forefront of development discussions. This slow uptake and even slower financial response to EbA is a direct consequence of such oversight. Such exclusion may complicate efforts to upscale EbA finance. The abstruse understanding of EbA’s broad applicability potentially adds to the ambiguity of the current financing gap. Since EbA is not separately budgeted for in sectoral initiatives, the funds allocated to EbA-related efforts remain unaccounted for. The extent of fund insufficiency is thus obscured by this ambiguity, which adds to the information asymmetry, making it more difficult to accurately estimate financial requirements. 

Establishing the Need for Unequivocal Acknowledgement 

It can be argued that India has already acknowledged and integrated the use of EbA in its climate resilience frameworks. Nonetheless, as outlined above, the intra-sectoral application of EbA is certainly lacking. This is not to suggest that EbA is absent from sectoral policies. Indian sectoral policies at the national and sub-national levels already incorporate elements of nature-based services. The National Water Mission, the National Urban Housing and Habitat Policy, and the National Agriculture Policy, to name a few, emphasise the role of community involvement and local knowledge in addressing capacity building, promoting green infrastructure in urban settings, protecting coastal ecosystems, and improving soil quality through sustainable irrigation and multi-cropping efforts. These systems are in place with pronounced details in national policies, suggesting that there may be a higher incidence of EbA use in India than currently estimated. Yet, the implicit and fragmented nature of its inclusion still deprives us of the complete range of advantages. To do away with the ambiguity that hinders EbA financing, it is essential to understand the advantages that such acknowledgement can bring. 

In a direct sense, EbA advocacy through development policy can introduce its advantages to a larger audience, boost credibility, and provide a basis for bringing it to the forefront of financial discussions regarding adaptation and cross-cutting. Further, even though EbA serves multiple purposes, financing is usually reserved for players within the climate sphere, due to a lack of awareness regarding its utility in other developmental spaces. Clear, purposeful inclusion into policy in different sectors can help encourage financiers from diverse fields to support EbA initiatives, thereby expanding the pool of available financial resources. This will also help set guidelines for its incorporation into the development sector at lower levels, resulting in a greater number of projects aligned with EbA principles. This increase in EbA employment at the local and sub-national levels can help establish a knowledge pool of case studies and data sources to enable application improvement, thereby enabling a better understanding of its effectiveness and efficacy. These factors can attract increased funding for EbA approaches in the next few years. 

Unaccounted spending towards EbA approaches can also be misconstrued as development expenses, leading to altered conclusions regarding the cost-effectiveness of these initiatives. 

Endorsing the sectoral use of EbA can also help reduce confusion regarding financial needs and pave the way for financial support with fewer impediments. Being able to analyse the finances put towards EbA components within sector-specific initiatives will bring clarity to the magnitude of investment already made. This will improve the overall tracking of finances, which can assist fund allocation and disbursal. In addition, it will allow for an analysis of the effectiveness of these initiatives for promoting financial investment. Moreover, variations in financial estimates can arise depending on the sectoral coverage, type of initiative, and primary objectives, in which case unidentified EbA would add to such discrepancies, making cost calculations more convoluted. Unaccounted spending towards EbA approaches can also be misconstrued as development expenses, leading to altered conclusions regarding the cost-effectiveness of these initiatives. 

Therefore, the identification of EbA use in public sector policies is essential. A best practice to follow to achieve clarity is the allotment of separate budgets towards EbA components. It is important to ensure that the funds already allocated are categorised to effectively distinguish EbA expenses. The lack of standardised guidelines on budgeting for climate initiatives within policy hinders acknowledging existing EbA frameworks and accounting for their subsequent funding. It also creates roadblocks for advocating an increase in EbA involvement as its precedence in policy is not acknowledged. Then there are the additional disadvantages of opening up greenwashing opportunities, since EbA initiatives can be claimed on the grounds of ambiguous criteria and policy standards. 

The current manner of inclusion also impedes the monitoring and evaluation of these unrecognised climate initiatives, making it difficult to understand which benefits can be attributed to EbA activity. This is especially necessary because while EbA can have beneficial synergies with the development goals, the tradeoffs may go unnoticed.  Being able to separately monitor EbA activity within a policy can help single out its effect on the primary goal of the programme. 

While the allotment of separate budgets can be effective, it is not sufficient on its own. To achieve its goal, EbA inclusion needs to be visible and its advocacy needs to be heeded by both the public and private sectors. Leading by example can effectively set standards and best practices for non-governmental parties to apply EbA components in local and sub-national initiatives. Outright acknowledgement of EbA as the grounding principles behind major government initiatives like the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY), the Nagar Van Udyan Program, and the National Mission on Natural Farming is an essential step in putting the approach at the forefront of development discussions. This needs to begin within the public sector by mandating explicit identification of already existing EbA elements in national, as well as state, district, and local level programmes. Following these measures, standardised guidelines and identification criteria need to be made accessible for grassroots-level action to remain in line with EbA principles. A more India-specific convention on the use of nature-based services is also necessary to promote EbA application at the sub-national levels. These steps will also help bring awareness towards climate-conscious and resilient development efforts. 

In conclusion, these tools need to be harnessed to dispel the ambiguity surrounding EbA and expedite access to knowledge, tools, and applications of the approach. With the climate crisis worsening, adaptation efforts need to be transformative and anticipatory. EbA provides a basic format for such efforts that cater to resilient development and are needed to ensure economic growth. As India recognises the economic costs of inaction and states its preference for development augmented by adaptation, a crucial next step is the incorporation of EbA into development planning across sectors.

Diya Shah is a Research Assistant at ORF’s Centre for Economy and Growth.

• Climate, Food and Environment
• Climate Change
• India
• eba finance
• eba in india
• ecosystem based adaptation
• ecosystem based adaptation financing
• ecosystem based adaptation in india
• unep adaptation gap report
• unep adaptation gap report 2024

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