Sri Lanka has consistently ranked among the top 10 countries at risk of extreme weather events by the Global Climate Risk Index, and it must look both inward and outward for solutions that will make it more resilient amidst a deepening climate crisis. Nearly a decade ago, the country signed the Paris Agreement and joined a united hope that the global temperature increase could be limited to 20C or even 1.50C. Unfortunately, this goal is becoming progressively unattainable, as evidenced by the latest UN Emissions Gap Report 2024 declaring that the world could warm by up to 3.10C if only “current policies” are implemented.
In light of this, developing nations like Sri Lanka have been obliged to consider how they can adapt to a changing climate, and these plans have to be implemented alongside their existing mitigation strategies. The challenges are numerous, beginning with one that plagues all massive endeavours: a lack of funding. However, certain parties believe that coordinated collaboration between the public and private sectors can bridge this financial gap.
HSBC Sri Lanka’s Pursuit of Answers
HSBC Sri Lanka, in partnership with Janathakshan, recently hosted a Thought Leadership Forum to explore the value of climate action collaboration between the private sector and public sector. Titled “Partnering for Climate Resilience: The Development Partners’ Role in Adaptation in Sri Lanka,” the forum was held on December 05, 2024 at the Galle Face Hotel, Colombo. Among the Partners represented at the Forum were the United Nations Development Programme (UNDP), Asian Disaster Preparedness Center (ADPC), Japan International Cooperation Agency (JICA), United Nations Population Fund (UNFPA), Department of Treasury, and so on.
HSBC reaffirmed the role the Bank will play in the transition to a net-zero economy by supporting its customers and making changes to reduce the emissions. Dr R.D.S. Jayathunga, Additional Secretary (Environment Development), Ministry of Environment said that the Ministry of Environment recognizes the importance of collaboration with development partners.
He agreed that closing the financial gap should be a high priority, given substantial investments will be necessary for building resilience. Dr Jayathunga called for more innovative financing mechanisms, such as climate adaptation funds and green bonds, to support critical initiatives. “We recognize the vital contributions of multilateral and bilateral agencies,” he said, “as well as private sector investments in supporting critical programmes. However, the need to mobilize additional innovative financing mechanisms remains pressing.”
The Problem
In a bid to outline the problem and the measures being taken to address it, Senior Professor at the University of Peradeniya Prof Buddhi Marambe delivered a presentation on ‘Bridging the Adaptation Divide: Driving Collective Action for a Resilient Future.’
Many are already feeling climate change on a personal level, Prof Marambe acknowledged, but wider effects will continue to make themselves apparent as time goes on. Responding to these effects, however, will prove difficult due to certain factors, not the least of which is the country’s economic situation.
As an example of this, he explained that the central position of the country’s highlands has a distinct impact on Sri Lanka as a whole, such as the eastern slopes of the central highlands being dry when the western slopes are wet (and vice versa). This is an issue for an island with three climatic zones, seven agro-climatic zones, 46 agro-ecological regions, seven major soil groups, 120 soil series, and so on. While this diversity is an asset to the country, it also complicates efforts to produce a comprehensive climate action plan. A solution that addresses the needs of one area would not be suitable for implementation across the country, and this in turn raises the costs involved. Challenges like this, he hoped, are what HSBC’s development partners can assist in overcoming.
The 29th Conference of the Parties (COP29) in Baku, Azerbaijan was held only a few weeks prior to HSBC’s Thought Leadership Forum (Nov 11, 2024 – Nov 22, 2024). The goal of this conference was to reach a climate finance agreement, supported by developed countries, that would assist developing countries as they responded to the impacts of climate change.
At COP29, these countries agreed to work towards an overall aspirational goal of $1.3 trillion per year, but this finance target was criticized for being inadequate. UN Secretary-General António Guterres said at the conclusion of discussions that he had, “hoped for a more ambitious outcome—on both finance and mitigation—to meet the great challenge we face.”
Nearly two decades prior at the 2015 Paris Agreement (COP21), more than 190 nations signed on to help keep global temperatures from increasing above 1.5-20C relative to pre-industrial levels (Sri Lanka officially signed on the following year). At the time, the lower limit of 1.50C was an ambitious target as 20C was considered the critical threshold, but Prof Marambe says it is now accepted that an increase in 1.50C will still wreak havoc across the world. This highlights why the country must focus on adaptation strategies.
Sri Lanka’s Response
The National Adaptation Plan (NAP) for Climate Change Impacts in Sri Lanka, published in 2016 and covering a period up to 2025, identified nine climate-vulnerable sectors in addition to overall national needs. They include food security, water, coastal sector, health, human settlements, bio-diversity, tourism and recreation, export development and industry- energy-transportation, all of which will suffer without adequate climate mitigation and adaptation efforts.
To resolve food security, for instance, the NAP called for the screening of existing crops and animals for heat and water stress resistance over a three year period. Long-term goals were published as well, such as the decade-long development of research institutes’ ability to study tolerant crops and water-efficient farming techniques. However, initiatives of this scale require financing, and plans that were made in 2016 were unlikely to foresee the coming pandemic and economic crisis.
Crop and animal screening, as described by the NAP, was expected to require Rs20 million to complete, a common figure among the NAP’s proposals. In contrast, the research development initiative was expected to require Rs2 billion to complete. There are numerous initiatives (of varying cost) that are critical to follow through on sooner rather than later, and delays could lead to unrecoverable losses. However, as was indicated by several forum participants, including Department of Treasury Assistant Director P.S. Nilanki, funding and coordination remain a key issue.
Prof Marambe’s own observations agreed with this assessment. “In the National Budget, there is no column for climate change,” he pointed out. “If you look at the Provincial Budget, there is no allocation for climate change-related actions by the Finance Commission.” While he acknowledged that other factors may make it difficult to assign funds in this way, Prof Marambe entreated the country to consider all its options as carefully as possible.
“Maybe there are international partners, our development partners, who can help the country—especially the Treasury—to make sure that such items are embedded in the system so that budgeting and the National Budget will be more meaningful in addressing situations like climate change,” he suggested.
While the 2016 NAP could not have accounted for the country’s present challenges, Prof Marambe was able to confirm that the government intends to introduce a new plan for the period between 2026-2035 and meet the country’s evolving needs. Sri Lanka also updated its Nationally Determined Contributions (NDCs), commitments by participating countries to reduce greenhouse gas emissions in pursuit of climate change mitigation, in 2021.
“We are learning from history. We are learning from the past and building upon that,” he said. “If policy guidance is required for our international development partners to support us, it’s in place right now. Let’s build upon that.”
Another plan that Prof Marambe brought to the forum’s attention was the Climate Prosperity Plan. Launched in 2022, it is notable for being the first to estimate how costly it would be for the country to achieve its adaptation and climate action targets. Between 2022-2030, it would cost $26.5 billion. In contrast, were the country to pursue total carbon neutrality, it would need $140 billion to achieve this by 2050.
Stepping Forward Together
It is important to recognize that Sri Lanka has not been idle. Despite the enormity and variety of challenges it has had to grapple with, the country has worked steadily to establish policy frameworks with the foresight to guide present and future climate initiatives.
In addition to the pending update of the NAP, Prof Marambe shared that a refreshed National Policy on Climate Change (NPCC) was introduced as recently as 2023 by then President Ranil Wickremesinghe at COP28 in Dubai. This refresh builds on the foundation laid by the 2012 Policy. Additionally, the National Environment Policy (NEP) and the National Environment Action Plan (NEAP) 2022- 2030 were adopted in 2022.
As Prof Marambe cautioned, however, Sri Lanka and its development partners must seize the opportunity to tackle the problem together. Climate change marches on whether the country is ready or not, and delays enacting even the best laid plans can have disastrous consequences.