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Adaptation Fund

Adaptation Fund. History Governance Funding Programs Meaning. Legal History. COP3 (1997) – Conception: The Kyoto Protocol KP must “assist developing country Parties … particularly vulnerable to … climate change to meet the costs of adaptation ."

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Adaptation Fund

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  1. Adaptation Fund History Governance Funding Programs Meaning

  2. Legal History • COP3 (1997) – Conception: The Kyoto Protocol • KP must “assist developing country Parties … particularly vulnerable to … climate change to meet the costs of adaptation." • COP7 (2001) – Birth: The “Marrakech Accords” to the KP • “[T]he Adaptation Fund shall finance concrete adaptation projects.” • COP13, CMP.3 (2007) – Christening: Bali Roadmap, Decision 1 • Launches the AF into the world with structure and legal bona fides

  3. Legal History • Late 2009: AF becomes operational • Early 2010: AF approves its first projects • Senegal • Honduras • Nicaragua • Pakistan • February 2011: host country Germany confers international legal personality status, allowing AF to: • Enter into contracts with recipients • Manage finances independently • Monetize CERs

  4. AFB Governance • Adaptation Fund Board – 16 members • Ten representing developing countries • Six representing developed countries • Decision-making by consensus • Failing that, a 2/3 majority vote • One member = one vote • All Board meetings are open to observers • Board is weighted towards LDCs

  5. Direct Access • Fund-recipient relationship designed to: • Increase national involvement in adaptation • Increase national ownership of projects • Simplify and strengthen accountability to Fund • NIE vs. MIE: Sophie’s Choice? • NIEs accredited: 3 • MIEs accredited: 7 • Cap on allocation to MIEs: 50% • No direct financing of NIE capacity-building

  6. A Role for Civil Society? • National level • Work with local communities in the project region • Arrange independent field visits • Promote dialogue between NIEs and national AF focal points • Advise and monitor NIE’s work and help in capacity-building • International level • Attend meetings to observe performance of the AFB & AF • Submit written materials (letters, briefs, memos) to the AFB • Provide independent analysis of the AFB • Raise public awareness

  7. Who Funds the Fund? Donations by Kyoto parties initiated funding — US$85.59 million donated — Largest Donation: Spain with US$57 million Mechanism for “independence” from donations — Two percent of Certified Emission Reductions (CERs) through the Clean Development Mechanism (CDM) of the Kyoto Protocol (KP) is transferred directly into the Adaptation Fund (AF). — CERs are then monetized by exchange on a carbon market

  8. CERs and the Market Total CER Issuance by Month CER Prices Since May 2009

  9. The Books

  10. Project Funding • Board has approved US$23.72 million in projects and programs • Board has endorsed projects worth $81.67 million • Approved projects range in cost from $3.91M to $8.62M • At March meeting, Board has $187 million in funding available for project approval

  11. Program Review Process Detailed application process, including a 50+ page proposal. Four-step process, with an additional step for those projects using the one-step approval process, rather than the two-step process. 1. Country Eligibility 2. Project Eligibility 3. Resource Availability 4. Eligibility of NIE/MIE 5. Implementation Arrangement

  12. Program Review Process AF Strategic Priorities specify a consideration of: level of vulnerability risks arising from delay ensuring equitable access to the fund lessons learned in project and program design maximizing regional co-benefits maximizing multi- or cross-sectoral benefits adaptive capacity to the adverse effects of climate change

  13. Senegal Implementing Entity: Centre de SuiviEcologique Total project cost: $8.619 million Program Objective: • Contribute to the implementation of Senegal’s National Adaptation Plan of Action on Climate Change (NAPA) Specific Objectives: • Protect coastal infrastructure from erosion • Fight salinization of agricultural lands (anti-salt dikes) • Assist coastal communities (esp. women) in handling fish processing operations • Communicate, sensitize, and train on best practices • Develop and implement appropriate regulations for coastal management

  14. Additional Programs Approved Honduras – Addressing Climate Change Risks on Water Resources in Honduras: Increased Systemic Resilience and Reduced Vulnerability of the Urban Poor • Implementing Entity: UNDP • Total project cost: $5.698 million Nicaragua – Reduction of risks and vulnerability based on flooding and droughts in the Estero Real river watershed • Implementing entity: UNDP • Total project cost: $5.5 million Pakistan – Reduction of Risks and Vulnerability from Glacier Lake Outburst Floods in Northern Pakistan • Implementing entity: UNDP • Total project cost: $3.9 million

  15. Concepts Endorsed (not yet Approved) Cook Islands –Integrated Climate Change Adaptation and Disaster Risk Management • Total project cost: $4.9 million Ecuador –Adverse Effects of Climate Change on Food Security • Total project cost: $7.4 million El Salvador –Infrastructure Development in San Salvador Metropolitan Area • Total project cost: $5.4 million Georgia –Flood and Flash Food Management Practices to Protect Vulnerable Communities • Total project cost: $5.3 million Maldives –Integrated Water Resource Management Programme • Total project cost: $8.9 million

  16. Finding Meaning Monies Disbursed to Adaptation-Specific Projects (Dedicated Bi- and Multilateral CC Funds, data as of 01/2011)

  17. Since 2010

  18. Fund Activity Fund Size as of 02/2011 Total Deposits (USD millions)

  19. Now Some Ups and Downs • NIEs and MIEs: numbers re proposals

  20. The Good and the Less Good • Direct access model • Dominance of MIEs • Other ways to improve NIE accreditation? • “Peer-to-peer” partnerships between accredited NIEs • Alternative sources of funding from bilateral streams for capacity-building • AFB has not explicitly defined the role of CSOs in the project application and approval process • Gender • Project design & proposal • Direct vs. indirect access • Scale of projects (community vs. industrial / national)

  21. More of the Same • Incredibly speedy model: look how quickly projects have been funded • What happens when the KP evaporates?

  22. More - Legitimacy • Developed countries favor existing institutions (think development banks) • Developing countries prefer new institutions • Promoting direct access for developing countries • NIEs, e.g. Center for Ecological Monitoring in Senegal • Funds drawn from proceeds of the CDM rather than contributions from developed countries

  23. More - Money • CER Price and Issuance Volatility • CER Market Security • Equitability in Project Funding • Country Cap, Regional Allowances, Individual Country Characteristics? • End of Kyoto • No mechanism for equitable funding to date

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