Adaptation to Climate Change: Scarce resources require effective Climate Policy Instruments

Background

Global greenhouse gas emissions are inexorably creeping upwards despite two decades of climate policy. By 2010, the average global temperature increase since the late 19th century had already reached 0.7°C and poor countries already now suffer from an ‘adaptation deficit’ to current climate variability. For the year 2030, the UNFCCC estimates annual global adaptation costs at 49 to 171 billion US$, with 27 to 66 billion accruing in developing countries. While adaptation has generally taken a back seat to mitigation in international climate policy, it increasingly becomes relevant in climate negotiations. In the Copenhagen Accord, industrialized countries have pledged 30 billion US$ as ‘fast start finance’ for mitigation and adaptation in developing countries with a view to increase financing to 100 billion US$ annually by 2020.By today, three multilateral funds under the UNFCCC earmarked for adaptation each contain around 150-250 million US$ of funding: the Adaptation Fund (AF), the Least Developed Countries Funds (LDCF) and the Special Climate Change Fund (SCCF). Furthermore new institutions such as the Green Climate Fund (GCF) and bilateral frameworks are currently under development.

Challenges

The modalities of most financing institutions remain vague.  Non-transparent selection processes circumvent a systematic comparison of adaptation projects’ performance, restrict access to funding sources and increase the risk of embezzlement or maladaptation. We see a strong need for improving selection processes in order to ensure integrity and public acceptability.

From an economic point of view, it would be desirable to maximize the adaptive benefit achieved with available financial resources. This implies that funds need to be allocated to those activities that bring most benefits to economies, people and environment. Post-implementation, proper monitoring and evaluation of activities’ impacts are a requirement for sustaining long-term effects. In addition, there is a need for all vulnerable countries to make informed decisions about their adaptation needs and priorities. This in turn requires a capable institutional basis and comprehensive know how.

Policy instruments that trigger effective and efficient autonomous adaptation will be crucial, both for industrialized and developing countries. However such instruments have been rarely elaborated and applied in the adaptation context.

Perspectives services

Building upon its vast experience with mitigation policies, Kyoto mechanisms and capacity building, Perspectives offers a wide range of services related to adaption to climate change. These include inter alia:

• Elaboration, improvement and implementation of concepts for determining the adaptive effect of adaptation projects/programmes;
• Criteria and procedures for selecting adaptation activities applying for funding;
• Economic instruments to promote autonomous adaptation and risk sharing;
• Monitoring and evaluation of adaptation activities;
     
• Institutional capacity building and support for National Implementing Entities (NIEs) and other adaptation agencies in vulnerable countries;
     
• Comprehensive national adaptation strategies and definition of adaptation demand and priorities;
• Exploring synergies between mitigation and adaptation in various contexts
• Conceptualization of market mechanisms for adaptation. For details see:
  www.fni.no/climatepolicyperspectives/FNICPP-03.html