The role of private finance in meeting adaptation infrastructure investment needs has been widely emphasised in climate policy debates. This new paper Mobilising private finance for coastal adaptation: a literature review in WIREs Climate Change reviews the scientific literature on the issue. The paper thus provides a perspective from the current literature on the questions of what promotes private investment in coastal adaptation and how can public actors’ interest in adaptation be aligned with private investor interests. In particular, the paper reviews the literatures on coastal adaptation finance and on financial arrangements involving both public actors and private investors, finding that private provisioning, public–private Partnerships (PPP), and public debt arrangements are promising. The authors then survey empirical examples, finding that private provisioning attracts investment when returns are high, for example, in urban real estate, and that PPPs attract dredging and construction companies’ investment, particularly for adaptation measures with a large share of operational costs, for example, beach nourishment. The authors somewhat surprisingly find little evidence of institutional investment through public debt instruments. They suggest a number of policy instruments, for example, concessional loans, tax incentives, and standards, to address this gap and enhance private coastal adaptation investment. The paper’s results are also relevant for other sectors that involve long-term infrastructure adaptation measures.
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