The State of Climate Adaptation Financing

The International Institute for Environment and Development produces some excellent brief reports suitable for student readings. If you’re looking for some readings for the Durban COP, there are a number of new reports, including one that caught my eye, on adaptation financing, Ciplet, et al.,, Adaptation Finance: How Can Durban Deliver on Past Promises?, Briefing (Nov. 2011).  Among the chief take-aways from the report:

  1. When developed countries agreed to provide $30 billion in “fast-start” financing by 2012, scaling up to $100 billion a year, part of the agreement was that it would be balanced between mitigation and adaptation initiatives; however to date, only 19-25% of fast-start finance ($4.8-6.3 billion) has been allocated to adaptation efforts, up slightly from 11-15% pledged a year ago;
  2. It is uncertain what proportion of adaptation funding will be in the form of pure grants, concessionary loans, or market-rate loans; vulnerable countries are ill-equipped to repay loans, nor should they be required to;
  3. Wealthy countries have failed to “scale up” their funding in anticipation of the post-212 era when fast-start financing ends, nor did the agreements in Copenhagen or Cancun provide a roadmap for doing so;
  4. There is a serious lack of transparency with fast-start financing, including a failure on most contributors to report their fast-start activities to the UNFCCC; moreover, the vast majority of fast-start funds have not flowed to UNFCCC-controlled funding mechanisms;
  5. The UNFCCC has failed to develop effective guidelines for identifying vulnerability, obviating efforts to target funding to those most vulnerable to climate impacts, as outlined in several recent agreements, including Cancun;
  6. Among the recommendations offered by the writers for Durban and beyond:
  • Develop other sources of funding beyond national revenue sources, e.g. a small level on international airline travel, bunker transport fuel or international financial transactions;
  • Develop defined targets for adaptation funding in the “hole” between when fast-start financing ceases in 2012 and the $100 billion annual pledge begins in 2020;
  • Develop a central account framework and registry to ensure transparency in financing, as well as provide guidelines for assessing whether pledges constitute “new and additional:” adaptation finance

This brief could generate some lively discussion on some core issues in climate policy making, including the following:

  • Should fast-start and long-term financing be equally balanced between mitigation and adaptation initiatives in developing countries?
  • Are developing countries entitled, as the authors argue, to outright grants for adaptation and mitigation financing initiatives?
  • Do developing countries have any recourse under international law should developed countries fail to meet their financing pledges?
  • Why is it important that financial flows primarily go through UNFCCC institutions?

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