Adaptation finance: climate change’s forgotten child

RELEASE DATE

15 November 2016
Top advisor to poor countries says he’s changing advice and telling them to give up reliance on the promises of adaptation funding from developed countries

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For over a decade I have been advising the Least Developed Countries (LDC) Group of countries in the UNFCCC negotiations on the topic of adaptation since these most vulnerable and poorest developing countries formed a negotiating group at COP6 in The Hague in 2000.

A major step forward was achieved a year later in 2001, here in Marrakech at COP7 where the LDC Fund was agreed to provide each country with an initial finance of USD 200,000 to carry out a National Adaptation Programme of Action (NAPA).

This enabled each country to carry out a rapid assessment of its vulnerable sectors and regions and develop a list of adaptation actions and submit the most “urgent and immediate” actions for funding from the LDCF to be implemented.

Since then all 48 the LDCs have completed their NAPAs and also submitted their highest priority actions for funding to be implemented and most have received at least one round of funding.

However, as the countries started to submit more projects the pipeline of money , which has always been dependent on voluntary contributions from the developed Annex 1 countries has dried up. So the LDCF ,which is managed by the Global Environment Facility (GEF) now has a pipeline of approved “shovel ready” projects but not enough money to put into them1.

In the meantime at COP13 in Bali the UNFCCC created a second Adaptation Fund to use the money from the so-called “Adaptation. levy” of 2% on the proceeds from transactions from the Clean Development Mechanism (CDM) under the Kyoto Protocol .

This was a very innovative fund with greater representation from the developing countries on its Board and it pioneered the modality of “Direct Access” which enabled the developing countries to apply directly to the Fund instead of through intermediaries such as the World Bank or the UN Agencies.

It has some initial successes over the years until the CDM pipeline became a trickle . It is now being kept alive based on voluntary contributions from a few developed countries , such as Germany.

However, there is now a strong push here in COP22 by the developed countries to bring the Adaptation Fund to an end as they view its role has been superseded by the Green Climate Fund (GCF) which is now the new kid on the funding block and the darling of the Annex 1 countries.

While the Board of the GCF made a very welcome policy decision to allocate 50% of their funding to adaptation and prioritise that towards the most vulnerable island developing countries and LDCs, unfortunately the GCF has only been able to allocate less than 10% of the Money it has already been given.

Hence we have the paradoxical situation of the LDCF and AF both having a pipeline of ready-to-go approved adaptation projects in the poorest and most vulnerable developing countries and the GCF sitting on several Billion unspent  US Dollars.

Having advised the LDCs to chase these different sources of adaptation funding promised at many COPs but with very little actually being delivered in the ground, I am now changing my advice to the countries and telling them to give up reliance on the promises of adaptation funding from the developed countries made at multiple COPs and look to doing what they can with their own resources.

The main reason for this change in advice is the fact that while we have been coming to COP after COP every year to make the same arguments for help over and over again, climate change has become a reality of the present and ceased to be a problem of the future.

Hence the most vulnerable countries need to look to their resources to finance adaptation , and possibly even Loss and Damage as they sometimes reach the limits of adaptation, as much as possible.

This is not to say that they should not keep pursuing the developed countries to fulfil the pledges they have made over time but that reality on the ground now trumps negotiations at COPs.

So let me end by citing the example of my country Bangladesh, which has seven years ago developed a climate change strategy and action plan and then set up a Climate Change Trust Fund using its own money.

Each year since then the Finance Minister of Bangladesh has been allocating approximately 100 Million US Dollars from the country’s own Exchequer to this fund to implement hundreds of adaptation activities around the country by government as well as civil society.

Thus Bangladesh has already invested well over half a Billion Dollars of its own funds over the last seven years and is now looking toward setting up a National Mechanism on Loss and Damage also with its own funding.

Other vulnerable developing countries such as Kenya, Rwanda, The Gambia and others are making similar national level funding arrangements.

So the time may now have arrived for the LDCs and other vulnerable developing countries to turn their attention more towards national actions and finance and also towards more South-South sharing of experiences and give up their hope of the pledges of finance from the developed countries materialising fast enough to matter to them on the ground.

One last thought on the issue of global funding for adaptation in vulnerable developing countries is that there has been much speculation here in Marrakech over the last week on whether or not President -elect Trump will try to withdraw from the Paris Agreement or even the UNFCCC, the one thing he is almost certain to do is de-fund the UNFCCC and the LDCF, AF and GCF!