Point of View: Reframing the Private Sector’s Role in Adaptation Finance

The Zurich Climate Resilience Alliance’s report (here) delivers a clear-eyed and compelling assessment of the private sector’s limitations and potential when it comes to financing climate adaptation in developing countries. Its sectors-based breakdown (Types A, B, and C adaptations), detailed projections of private finance flows (~3% today, rising to ~15% by 2035), and nuanced discussion of ethical and structural barriers are valuable contributions that ground our expectations in reality rather than wishful thinking. 

Our POV - What They’ve Missed

Yet, amid robust analysis, the report has overlooked what might be the single most transformative contribution of the private sector: slashing the cost of adaptation through technological innovation.

Why This Matters

Reducing the cost of adaptation isn’t just about numbers—it’s about scaling and democratizing access. Lower-cost interventions allow local governments, NGOs, and even households to deploy adaptation solutions that were previously unaffordable.

Here are illustrative examples across sectors:

• Coastal Flood Protection (Type A – public goods)

  A decade ago, a detailed coastal flood risk study cost US$250,000, putting it well beyond the reach of many communities. Now, thanks to drones, high-resolution satellite imagery, and AI-powered flood modeling, the same analysis costs only US$10,000—a reduction of over 95%.

• Agriculture & Food Security (Type B – public-private mix)

  Traditional drought assessments—relying on physical field surveys and lab data—could cost US$1 million. Today, satellite data analytics and smart soil sensors can produce equivalent insights for under US$200,000.

• Urban Heat and Infrastructure (Type B/C – mixed returns)

  Mid-sized cities once spent up to US$15 million for heat vulnerability and resilience assessments. With digital twins, IoT sensor networks, and AI modeling, comparable studies can be completed for under US$2 million.

• Forest Fire Risk Mapping (Type C – commercial value)

  Fire-risk mapping used to cost US$500,000 per region; now it can be delivered for US$100,000 using satellite monitoring, drone-based infrared scanning, and machine learning.

• Water Systems & Invasive Species Monitoring (Type B)

  Monitoring invasive species or harmful blooms once cost US$1 million annually via manual sampling. Now, eDNA/eRNA sensors and cloud analytics reduce the bill to US$50,000.

These cost reductions—75% or more across sectors—are not hypothetical. They are already happening because private-sector startups and entrepreneurs are developing and deploying the tools, backed by venture capital, innovation grants, and private equity.

Why This Is the Private Sector’s Biggest Contribution

• Scaling Through Innovation: Lower costs mean adaptation is no longer exclusive to national-level actors. Local governments, NGOs, and communities can lead.

• Startups Lead the Way: It’s the young companies—often founded by technologists—that invent adaptive tools. When they succeed and scale, larger corporates or private equity acquire them, integrating innovation into mainstream markets.

• Better Than Waiting: Instead of pinning hopes on slow-moving international policies or philanthropy, innovation delivers results now—and at scale.

Why Scrutiny Equals Impact

Funders—development banks, philanthropists, ESG investors—must demand accountability:

• Ask tough questions: If a project cost US$15 million ten years ago but can now be done for US$2 million, why isn’t it using todays' technology innovations?

• Fund efficiently: Expect cost-effective, tech-enabled planning; invest only when adaptation solutions reflect current capabilities.

• Push for transparency: Cost savings should translate into wider coverage and deeper impact—not retained rent by outdated vendors.

The Cost Problem: An Uncomfortable Truth

Here’s the paradox: in the advocacy world, it’s almost anathema—or even anti-religious—to lower the cost of adaptation projects. Many advocacy groups are hardwired to argue for “more money,” which often means simply adding another zero to cost estimates. Bigger price tags are equated with bigger priority.

By contrast, knocking a zero off the price can make a project sound less important, even when it reflects efficiency gains from technology. That’s why armies of consultants and bureaucrats will continue inflating numbers—because higher costs align with traditional fundraising narratives. We know this will not be well received by some.

The reality, however, is clear: technology is driving costs down—whether producing high-resolution data, analyzing that data to generate actionable insights, or deploying physical solutions like modular sea walls or 3D-printed barriers. Pretending otherwise is not just misleading; it actively risks misallocating scarce adaptation finance.

The Big Unasked Question

Technology is unbundling value across the adaptation economy—but who loses when costs drop dramatically? Does outmoded consultancy resist change? Do traditional suppliers get edged out? That’s not for us to answer—but it’s a crucial question the sector must grapple with. Perhaps this POV will catalyze discussion and result in another beautifully designed report.

Inquiries: John Robinson, Partner, Mazarine Climate

Mazarine Climate, as a climate adaptation venture capital firm, is building a portfolio of early-stage companies that leverage the Industry 4.0 toolbox to help more of humanity prepare for, adjust to, and address water quantity and quality risks in our new climate reality. Our focus is firmly on SDG 13 (Climate Action) rather than SDG 6 (Clean Water and Sanitation).

Our first investment is in TDRI, an emerging company that enables road owners, operators, and their consultants to manage moisture risk—the single greatest threat to road infrastructure. It should come as no surprise to climate adaptation practitioners that as the climate changes, roads are getting beaten up, which is a business disruption and economic development risks but also a public health & safety risk. While this challenge (monitoring moisture in roads) doesn’t make headlines like wildfires or extreme heat, it represents a critical sub-vertical of adaptation: transport infrastructure. Roads are foundational for communities everywhere—from Bangladesh to Bolivia to Belgium.

TDRI’s founder, Damian Butters, is deeply committed to reducing costs and democratizing access to advanced road monitoring. His vision is to empower even the smallest municipalities to see and understand the state of their roads, prioritize repairs and replacements, and ultimately save their communities both in the near term and over the long run. The proverbial poster child of Climate Adaptation Tech (or CAT).

What was once prohibitively expensive is now becoming highly cost-effective. Under Damian’s intentional leadership, TDRI is equipping its customers with the tools to adapt to mounting water risks—and helping ensure that road infrastructure remains resilient in our rapidly changing climate.

To connect with TDRI, please contact John Robinson Partner, Mazarine Climate