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How should we channel future climate adaptation funding?

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(This article has been originally published here)

Finance needs to flow to the most vulnerable. To to this we need to understand who’s at risk and where the money should go.

Over the last decade, a consensus has emerged that the poorest and most vulnerable countries need international finance to help them adapt to climate impacts.

There is a willingness from the developed countries and even from some emerging economies to provide that money.

But there is still no agreement on how to channel the funds, or which countries should be prioritized.

This has been the most difficult question over the years. It could be argued that there are poor and vulnerable communities in every country, including the developed countries.

Mapped: Voices of people most vulnerable to climate change

For example, in the rich and technologically advanced US, more than a thousand people died during Hurricane Katrina in New Orleans.

Most were the poorest citizens living in the ninth ward, the most vulnerable part of the city.

Under the UN climate process, the least developed countries (LDCs), the small island developing states (SIDS) and African countries that are prone to floods and droughts are generally recognised as being “particularly vulnerable”.

However, there are many other developing countries , such as the Philippines, Pakistan and countries in Central and South America, that are also vulnerable but do not fall under any of the above groups.

EXISTING FUNDING CHANNELS:

LDC Fund (LDCF) which was created as part of the Marrakech Accords agreed at COP7 in 2001 with voluntary contributions from developed countries channeled through the Global Environment Facility (GEF) .

Special Climate Change Fund (SCCF) which was also created at the same time as the LDCF and also based on voluntary contributions from developed countries channeled through the GEF.

The Adaptation Fund (AF) was set up after the Bali Action Plan at COP13 in Bali, Indonesia in 2010 and had a separate Adaptation Fund Board (AFB) and was initially based on the “Adaptation Levy” , which was a 2% charge levied on all transactions made under the Clean Development Mechanism (CDM).

Pilot Programme on Climate Resilience (PPCR) was set up under the World Bank, not the UNFCCC, in 2010 with a combination of loans and grants and focused on a set of ten selected highly vulnerable countries in Africa, Asia, South America and two regional projects in the Pacific and Caribbean.

Bilateral Development Funding Agencies. In addition to the major multilateral funds mentioned above many developed countries also financed adaptation in self-selected developing countries through their respective bilateral development assistance agencies.

If one were to look at vulnerability within large countries such as China, India, Indonesia and Brazil there are probably larger numbers of people who are poor and vulnerable than in the LDCs or SIDS.

The number of poor and vulnerable people in India is certainly more than in all the SIDS put together and may even be more than those in the LDCs as well.

So an agreed method needs to be developed to enable the most vulnerable to be defined and prioritised for adaptation finance.

While prioritising the poorest and most vulnerable developing countries, the various funds also need to allocate funds to the poorest and most vulnerable communities within each country.

At the moment this is a very much a hit and miss matter with little or no monitoring of where the money actually ends up.

Better monitoring and reporting of funds to countries as well as within countries needs to be done.

It would be best for developed countries wishing to fulfil their obligations to provide funding for adaptation in the most vulnerable developing countries, to do so through the established channels under the UN rather than bilateral channels.

While bilateral overseas development aid should be made “Climate Smart” and be used in synergy, rather than parallel, with climate finance on the ground, the double counting of ODA with obligations under the UN is at best confusing and at worst morally questionable.

Written by: Dr. Saleemul Huq, Director, ICCCAD

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