Protecting Our Youngest: Supporting Children in a Changing Climate

Climate change poses significant challenges for all age groups; however, children under five may be especially vulnerable because they cannot protect themselves or cope with sudden changes brought about by extreme weather events or other disruptions caused by global warming patterns. According to the World Health Organisation, almost 90% of the global health burden related to climate change is borne by children under five. Research ahead of the 2015 Paris Agreement noted that a child born in 2020 will experience on average twice as many wildfires, 2.8 times the exposure to crop failure, 2.6 times as many drought events, 2.8 times as many river floods, and 6.8 times more heatwaves across their lifetimes, compared to a person born in 1960. Tragically, during the recent drought in Somalia, half of the 43,000 deaths were children (Somalian government, reported by The Guardian).

However, there are solutions that focus on creating new financial models geared towards adaptability and resilience (A&R) finance that consider both the short-term risks posed by climate change and long-term strategies designed to prepare children for future impacts they may experience later in life. Combining traditional sources with local ecosystems can also provide an effective way forward when it comes to addressing these issues head-on while ensuring equitable outcomes across all stakeholders involved.

This article discusses the case for new financial models and strategies to leverage grassroots programs better to empower local entrepreneurs and ecosystems.

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New Financing Models Required

The current A&R financial models are not designed to meet the needs of young children in a changing climate, with around 90 per cent of investments being allocated to infrastructure and similar projects providing very little direct allocation for the needs of young children. The remaining investment is allocated to social programs where the impact of early childhood development (ECD) is greater, though still under-resourced. In combination, there are insufficient investments to meet the needs of young children impacted by climate change.?

To effectively address the A&R needs of young children, new financing models should be developed that consider the long-term impacts of climate change on ECD. These models should emphasise sustainability, resilience, and adaptability. They should also be flexible enough to respond to sudden changes in environmental conditions or unexpected shocks like economic downturns or natural disasters.?

Broadly, there are two unlocks. First, a re-balance from infrastructure to social programs, and second, new sources of financing are required to support the development and implementation of these new models. Public sector financing alone cannot close the climate financing gaps, so there is a need to unlock private sector capital and involve public actors and philanthropies to provide catalytic capital through innovative new structures.

There are early signs of change in the balance of climate-related investment. A child-climate focused think tank, Capita, has emerged in this space (capita.org). Public and private financiers feel pressure to recognize the lack of investment in climate and increase financing for climate action, particularly in A&R. Private sector actors are increasingly considering the cost of inaction on social, economic, and environmental systems when evaluating project risks and returns. Innovation in risk-sharing instruments, such as blended finance, impact investing, and development bonds, also make climate finance more attractive for market-return-seeking capital. International financial institutions and multilateral development banks plan to integrate climate action into their investment mandates to increase overall climate financing.

New sources of finance are also emerging as the recognition of the underinvestment in climate is driving innovation in A&R financing. Four factors are shaping new sources of funding.

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• Market shifts are expected to remove barriers to investment, such as project risk, low returns, and limited project supply, as regulators, governments, and private sectors act on climate change.
• Private sector actors are increasingly considering the cost of inaction on social, economic, and environmental systems when evaluating the risks and returns of projects.
• Risk-sharing tools, such as blended finance, impact investing, and development bonds, can drive innovation and attract more investments, making them more attractive for investors seeking market returns.
• Multilateral development banks and international financial institutions are planning to make climate action a part of their investment mandates, which is likely to increase overall climate financing.

Mitigation and age-responsive and socially inclusive climate cost-benefit analysis

The USA plays an international role is setting the social cost of carbon.?Domestically, the social cost of carbon has been used to evaluate regulations during the current and previous administrations (whitehouse.gov). Globally, finance ministers are factoring in climate change risks in national budgets and investment plans to reduce economic and social costs. Many use the social cost of carbon established by the USA. Armed with this information, governments can make better-informed decisions about climate change-related plans and investments.?However, further guidelines are required to provide a systemic approach for assessing the costs and benefits of plans and investments related to climate change, considering the impact on vulnerable groups in particularly young children and their caregivers.?

Local Ecosystems & Social Investment

In addition to traditional sources of finance like government and philanthropy, local ecosystems can play an important role in developing A&R for early childhood development in a changing climate. By empowering grassroots programs through social investment initiatives such as microfinance or crowdfunding platforms, more resources can be put towards these local efforts in ways accessible to those closest affected by real-time changes. It is important that these solutions are developed locally, closely with communities and ecosystems for two reasons; to ensure relevance and to respond to donor requirements to finance local actors.

This direct investment model has proven effective in many countries around the world—including those affected by extreme weather events like floods or droughts—and can help ensure that communities have access to much-needed resources during times of crisis as well as longer-term solutions for adapting to climate change's effects on ECD over time.?Efforts should address mitigation, resilience, and adaptation requirements.