Finance for climate adaptation projects is below what is required to address the escalating risks posed by climate change, according to a new report.
Examples of climate adaptation projects include flood-resilient infrastructure, storm-resistant coastal defences, drought-resistant crops and early warning systems.
A joint report by the Climate Change Advisory Council and the Central Bank of Ireland has warned that without action, the impact of extreme weather events will test Ireland's economic and financial resilience.
The study found that many adaptation projects, particularly at local levels, are seen as too small or too uncertain to secure funding, even though their benefits are clear and long-lasting.
According to the research, deep rooted barriers to investing in climate adaptation include a lack of locally relevant climate risk data, high upfront costs, fragmented access to funding, and the absence of clear investment pathways that can attract private capital.
"Without considerable progress in scaling investment in adaptation, Ireland risks falling behind in building the resilience needed to withstand future climate shocks," the report found.
The study recommends solutions that include transition planning that incorporates adaptation; the development of scalable, investable project models; and a register of successful adaptation projects to build momentum and share solutions.
It highlights the need to address current insurance protection gaps through a long-term strategic approach to flood insurance with enhanced data sharing and a clear recognition of adaptation measures.
The report proposes a National Adaptation Finance Strategy to attract private and EU funding which should build on improved estimates of long-term investment needs.
"By addressing barriers, mobilising public and private finance, and implementing innovative solutions, Ireland can build a more resilient economy and society while reducing risks to the financial system," said Peter Thorne, Chair of the Climate Change Advisory Council's Adaptation Committee.
Vasileios Madouros, Deputy Governor of Monetary and Financial Stability for the Central Bank of Ireland, said climate change poses risks to the financial system and the long-term stability of our economy.
"We're already seeing the impact extreme weather has on communities, businesses and infrastructure, and we recognise the importance of addressing climate-related risks, including the growing need for investment in adaptation measures.
"This joint report proposes actionable steps to build resilience in the economy by increasing the deployment of adaptation finance in Ireland," Mr Madouros said.
