Bottom-up approach to climate interventions

Too often, our discussions of climate and development finance focus on the supply side: - how many trillions are needed, - how to mobilize private capital, and - (sometimes) how to reform financial institutions. In doing so, we neglect the most critical foundation of all: planning. Energy systems, industrial sectors, cities, and transport cannot be financed in the abstract. They must be planned, through frameworks that assess technological options and pathways, sequence investments, and ensure affordability and resilience. Most major sectors are inherently regional: clean fuel corridors, mineral-based industrial hubs, cross-border grids, and transport systems that require coordination across markets. Innovation in new technologies—circular economy, optimized energy systems, innovations in industry or transport, storage (BESS), distributed resources (DERs)—must also be deliberately built into these pathways. Planning and pathways are what make such investments investable. Yet that is not how our financing approaches are usually structured. A bottom-up approach brings clarity on investment priorities anchored in a country’s development strategy and a region's opportunities for, and imperatives of, connectedness. From there, we need a technical and institutional framework that translates those priorities into costed, sequenced investment programs, supported by the right policies and institutions. The next step is an integrated financing framework that clarifies: • What can and should be financed through affordable sovereign borrowing (the IMF should then ensure access to adequate affordable borrowing, not impose arbitrary debt ceilings); • What should be led by the private sector; • Where would concessional or catalytic capital be most effective; • Which innovative tools (e.g. thematic or cities guarantee funds, liquidity mechanisms, etc.) could address structural barriers or project-specific risks. This approach also requires us to get much more precise about risk. Current practices compress diverse risks into blunt assessments. Sovereign ratings become a ceiling for public banks, cities, and projects. Instead, we should disaggregate risks (currency, liquidity, policy, offtake, etc.) and address each through fit-for-purpose structural reforms and tools. In short, financing the transition, and sustainable development more broadly, requires bottom-up planning and strategy-driven financing. When governments and regions are supported to do such planning, define what needs to be financed, and build the institutional and financial frameworks to support it, capital can flow where it’s needed. This also shows the limits of existing approaches to aligning finance (taxonomies, disclosures, due diligence) and the need instead for structural supports for planning, financing, and delivery. (image is of our 2022 Roadmap for Zero-Carbon Electrification in Africa https://lnkd.in/eFHmigmU).

🌍 Disaster risk reduction and climate adaptation strategies are increasingly urgent. To meet this challenge, the 𝐂𝐑𝐌-𝐍𝐛𝐒 Toolkit has been developed to help countries embed nature-based solutions. It brings together environmental knowledge, policy alignment, practical interventions, inclusive governance, and integrated planning. Through this approach, it provides a clear pathway for building resilience while safeguarding ecosystems and human well-being. 𝘌𝘢𝘤𝘩 𝘵𝘰𝘰𝘭 𝘪𝘴 𝘰𝘶𝘵𝘭𝘪𝘯𝘦𝘥 𝘣𝘦𝘭𝘰𝘸. 𝐓𝐨𝐨𝐥 1: 𝐒𝐭𝐨𝐜𝐤𝐭𝐚𝐤𝐞 𝐨𝐟 𝐈𝐧𝐟𝐨𝐫𝐦𝐚𝐭𝐢𝐨𝐧 - Countries collect and compile data on environment, climate, hazards, and vulnerabilities to build a risk profile. - Using IPCC’s risk approach and Indigenous knowledge, the stocktake highlights where NbS can deliver the strongest impact. 𝐓𝐨𝐨𝐥 2: 𝐍𝐛𝐒 𝐒𝐭𝐚𝐭𝐮𝐬 𝐢𝐧 𝐏𝐨𝐥𝐢𝐜𝐲 𝐚𝐧𝐝 𝐏𝐥𝐚𝐧𝐧𝐢𝐧𝐠: - National plans and strategies are screened for NbS references through targeted keyword checks. - This process identifies entry points, exposes policy gaps, and ensures new NbS reinforce existing frameworks. 𝐓𝐨𝐨𝐥 3: 𝐆𝐮𝐢𝐝𝐚𝐧𝐜𝐞 𝐟𝐨𝐫 𝐍𝐛𝐒 𝐒𝐞𝐥𝐞𝐜𝐭𝐢𝐨𝐧 - The toolkit provides categories and options for selecting NbS tailored to hazards and ecosystems. - Selected measures balance risk reduction with co-benefits such as biodiversity, resilience, and livelihoods. 𝐓𝐨𝐨𝐥 4: 𝐒𝐭𝐚𝐤𝐞𝐡𝐨𝐥𝐝𝐞𝐫 𝐄𝐧𝐠𝐚𝐠𝐞𝐦𝐞𝐧𝐭 𝐚𝐧𝐝 𝐆𝐨𝐯𝐞𝐫𝐧𝐚𝐧𝐜𝐞 - Countries are supported to mobilize stakeholders across institutions, sectors, and governance levels. - It promotes transparent participation that empowers communities and ensures NbS are inclusive and fair. 𝐓𝐨𝐨𝐥 5: 𝐍𝐛𝐒 𝐈𝐧𝐭𝐞𝐠𝐫𝐚𝐭𝐞𝐝 𝐏𝐥𝐚𝐧𝐧𝐢𝐧𝐠 - Countries are guided to embed NbS within DRR strategies, adaptation plans, and cross-sector policies. - Global examples and templates illustrate how integration turns scattered efforts into coherent strategies. 𝐒𝐮𝐦𝐦𝐚𝐫𝐲 𝐂𝐡𝐞𝐜𝐤𝐥𝐢𝐬𝐭 - A checklist aligns the five tools in sequence to help countries track their progress. - It ensures a logical, stepwise approach that moves from risk profiling to policy integration. In essence, the CRM-NbS Toolkit is a structured pathway to mainstream nature-based solutions in #disaster and #climaterisk management. By moving from stocktake to integrated planning, countries can build resilience, safeguard ecosystems, and protect people’s well-being against climate change.

A recent article on Bottom-up assessment of air quality management strategies in Vijayawada, India: Emissions inventory, atmospheric capacity, and policy scenarios published in Sustainable Cities and Society, Volume 112, 1 October 2024, 105650 Research highlights • Evaluated air quality strategies in Vijayawada using a bottom-up approach. • BAU scenarios show current regulations are inadequate for controlling PM, SO2, and NOx. • BS-VI standards effectively reduced NOx emissions from vehicles. • ALTs project significant emission reductions: 12–15 % PM10, 19–24 % PM2.5, 24–48 % SO2, 19–32 % NOx. • Novel integration of scenario analysis with atmospheric capacity evaluation. Showcasing a scenario-based approach to how benefits can be achieved to improve air quality in Vijayawada city. The study provides a comprehensive framework for assessing air quality management strategies in Vijayawada, India, using a bottom-up approach. Its findings underscore the need for more stringent regulations and alternative technologies to effectively control air pollution. Stakeholders can leverage the study's methodology and insights to develop and implement tailored air quality improvement plans for other cities, ensuring a sustainable and healthy environment. #airquality #bulesky #CleanAir #CARE Open Philanthropy Clean Air Fund Ministry of Environment, Forests & Climate Change, Government of India #CPCB #PCBs #SPCB #APPCB #NKN #GlobalBurdenofDisease #WHO Council on Energy, Environment and Water (CEEW) WRI India Centre for Science and Environment, New Delhi https://lnkd.in/giRYKeGH

I had the privilege of facilitating the group on 𝐂𝐥𝐢𝐦𝐚𝐭𝐞 𝐅𝐢𝐧𝐚𝐧𝐜𝐞 during the 𝐖𝐨𝐫𝐤𝐬𝐡𝐨𝐩 𝐨𝐧 𝐃𝐞𝐯𝐞𝐥𝐨𝐩𝐢𝐧𝐠 𝐈𝐧𝐜𝐥𝐮𝐬𝐢𝐯𝐞 𝐂𝐥𝐢𝐦𝐚𝐭𝐞 𝐂𝐨𝐦𝐦𝐢𝐭𝐦𝐞𝐧𝐭𝐬: 𝐍𝐃𝐂𝐬 𝟑.𝟎 𝐟𝐨𝐫 𝐏𝐚𝐤𝐢𝐬𝐭𝐚𝐧. Together with experts and stakeholders, we explored transformative ideas to enhance Pakistan's climate action framework. Here are the key takeaways: ⁣ ⁣ 🔹 𝐂𝐚𝐫𝐛𝐨𝐧 𝐂𝐫𝐞𝐝𝐢𝐭 𝐃𝐞𝐯𝐞𝐥𝐨𝐩𝐦𝐞𝐧𝐭: Provincial-level projects must be prioritized, underpinned by robust MRV (Monitoring, Reporting, and Verification) systems for transparency. ⁣ 🔹𝐈𝐧𝐝𝐮𝐬𝐭𝐫𝐢𝐚𝐥 & 𝐆𝐫𝐞𝐞𝐧 𝐅𝐢𝐧𝐚𝐧𝐜𝐞: Focus on sectors like 𝐭𝐞𝐥𝐞𝐜𝐨𝐦𝐦𝐮𝐧𝐢𝐜𝐚𝐭𝐢𝐨𝐧𝐬, establishing 𝐢𝐧𝐝𝐮𝐬𝐭𝐫𝐢𝐚𝐥 𝐛𝐚𝐬𝐞𝐥𝐢𝐧𝐞𝐬 for emissions and differentiated compliance standards for high-impact sectors. ⁣ 🔹 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐭𝐲 𝐌𝐢𝐠𝐫𝐚𝐭𝐢𝐨𝐧 𝐟𝐨𝐫 𝐅𝐢𝐧𝐚𝐧𝐜𝐞: Leverage community-based financial mechanisms to drive inclusivity and resilience. ⁣ 🔹 𝐆𝐫𝐞𝐞𝐧 𝐂𝐚𝐩𝐭𝐮𝐫𝐞 𝐈𝐧𝐢𝐭𝐢𝐚𝐭𝐢𝐯𝐞𝐬: Introduce accountability-focused programs addressing issues such as climate migration, with examples like Skardu. ⁣ 🔹 𝐒𝐞𝐜𝐭𝐨𝐫-𝐒𝐩𝐞𝐜𝐢𝐟𝐢𝐜 𝐍𝐃𝐂𝐬: Define the growth gap in terms of capacities and skills, emphasizing social indicators (hunger, education, malnutrition). ⁣ 🔹 𝐂𝐨𝐬𝐭 𝐨𝐟 𝐈𝐧𝐚𝐜𝐭𝐢𝐨𝐧: Quantify inaction’s impact on equity, mitigation, and adaptation through detailed year-by-year matrices. ⁣ 🔹 𝐋𝐨𝐬𝐬 & 𝐃𝐚𝐦𝐚𝐠𝐞: Adopt a bottom-up accountability approach to assess L&D with quantified figures. ⁣ 🔹 𝐆𝐞𝐧𝐝𝐞𝐫-𝐑𝐞𝐬𝐩𝐨𝐧𝐬𝐢𝐯𝐞 𝐂𝐥𝐢𝐦𝐚𝐭𝐞 𝐆𝐨𝐯𝐞𝐫𝐧𝐚𝐧𝐜𝐞: Empower local governments with inclusive policies and budgeting frameworks. ⁣ 🔹 𝐕𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐆𝐚𝐩 𝐅𝐮𝐧𝐝𝐢𝐧𝐠: Integrate this tool for industrial green transformation at the provincial level. ⁣ 🔹 𝐄𝐧𝐞𝐫𝐠𝐲 𝐓𝐫𝐚𝐧𝐬𝐢𝐭𝐢𝐨𝐧 𝐌𝐞𝐜𝐡𝐚𝐧𝐢𝐬𝐦𝐬 (𝐄𝐓𝐌): Collaborate with global partners emphasizing 𝐉𝐮𝐬𝐭 𝐄𝐧𝐞𝐫𝐠𝐲 𝐓𝐫𝐚𝐧𝐬𝐢𝐭𝐢𝐨𝐧 𝐏𝐚𝐫𝐭𝐧𝐞𝐫𝐬𝐡𝐢𝐩𝐬 (𝐉𝐄𝐓𝐏𝐬) to create green jobs and skills. ⁣ 🔹 𝐂𝐒𝐑 𝐟𝐨𝐫 𝐂𝐥𝐢𝐦𝐚𝐭𝐞: Develop a corporate social responsibility (CSR) club focused on climate change. ⁣ ⁣ These discussions reaffirmed the urgent need for innovative, transparent, and inclusive approaches to achieve Pakistan's ambitious climate goals, particularly the 60% reduction target. Integrating climate finance into broader policies and aligning financial mechanisms with policy incentives are key steps forward. ⁣ ⁣ ⁣Many Thanks to Zainab Naeem| Ubaid ur Rehman Zia| Sadia Satti|Arfa Ijaz|Saira Adnan| Ayesha Naeem|@Muhammad umar| Arif Goheer #ClimateFinance #NDCs3 #Sustainability #GreenTransition #PakistanClimateAction #JustTransition #CSRClimate ⁣ ⁣ SDPI Pakistan Ministry of Climate Change and Environmental Coordination Global Climate-Change Impact Studies Centre (GCISC)

Climate risk assessment and impact modeling are meaningful when done bottom-up, starting at the asset - property - factory level, then scaling to the portfolio- , entity- and company level. Relying on sector-average or industry-average proxies for climate-related losses is misleading and inaccurate. If your company isn’t reporting these numbers, neither are your competitors, suppliers and customers. Example. The average flood risk exposure for automobile factories does not reflect the risk for your specific factory. Such an 'average' is not actionable information for a corporate risk manager or an investor.

From Climate Stress Testing to Climate Value-at-Risk: A Stochastic Approach Joint publication by Amundi Institute and Amundi Technology on climate stress testing and value-at-risk. With Baptiste Desnos, Theo Le Guenedal and Philippe Morais, we develop a comprehensive bottom-up approach to climate stress testing in the context of risk management of investment portfolios. In particular, we model the distribution function of the carbon tax, provide an explicit specification of indirect carbon emissions in the supply chain, introduce pass-through mechanisms of carbon prices, define price dynamics based on demand elasticities, derive value-added shocks, cascade earnings-at-risk at the issuer level and finally calculate value-at-risk and expected shortfall of stock portfolios. It is difficult to sum up all the findings of the 180-page research report in just a few words. Perhaps it is better to list some keywords to give an idea of the content: NGFS scenarios, WIOD, Exiobase, supply chain, input-output analysis, cost-push pricing model, dual Leontief matrix, pass-through, upstreamness/downstreamness, indirect emissions, GDP cost, inflation risk, global vs. regional taxation, mark-up pricing, price elasticity of supply/demand, tax regressivity, earnings-at-risk, conditional/unconditional VaR, expected shortfall, risk contribution, market portfolio, substochastic matrix, Neumann series, Markov chain, directed graph, copula, Monte Carlo simulation. #amundi #esg #sustainability #climate https://lnkd.in/e-TJEZeS https://lnkd.in/eMr8_YCt