Kaplina undp climate finance in developing countries


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Expert Workshop on Adaptation Financing and Implementation, Putting Priorities into Practice in OECD Countries, Paris, 18-19 June, 2014

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Kaplina undp climate finance in developing countries

  1. 1. Enabling Adaptation Finance in Developing Countries Catalyzing Adaptation Finance Anna Kaplina Regional Adaptation Specialist, ECIS Paris, June 2014
  2. 2. Cambodia/LDCF Georgia/AF Hungary/SPA Laos/SCCF Supporting the Vulnerable and Marginalized
  3. 3. Where are the main funding requirements for adaption likely to arise? “Additional” Funding Needs  $2.129 b (Urgent and Immediate Priorities -NAPAs)  $30-100 b/year for period 2010-2050 (WDR 2010)  $290 b/year (Parry et all 2009)  $326 - $355 b/year for financing adaptation options on natural ecosystems) (Source: Berry 2007) • Mainly infrastructure • Estimates are likely an underestimate! Catalyzing Adaptation Finance Present Level of Assistance  Approx. USD $140-175b & $70-100 b/year for 2010-2050 (mainly for mitigation)  Vertical Funds (for adaptation; LDCF/SCCF/AF): less than $1.0b to-date cumulatively Copenhagen Accord- $100b/year additional finance by 2020 (50% of this for adaptation)
  4. 4. Estimated Losses: $15-20 billion (Swiss Re/Munich Re) $21 billion (prop. damage); $22 billion (opp. costs) (World Bank) Catalyzing Adaptation Finance Scale of Damage in Thailand (2011
  5. 5. Catalyzing Adaptation Finance: Key Drivers  Public finance alone is not currently sufficient; Public finance alone is not going to be sufficient  Most of the investment in adaptation expected by businesses and households (end-users). Facilitating private sector investment will be necessary: – Preserving existing infrastructure, businesses and livelihoods – Developing new businesses – No-regret investments (adaptation is an ancillary benefit) Ensuring that money is well spent, and hence maximizing its impact and effectiveness will be critical to maintaining support and realizing the transition to a low-carbon, climate-resilient future. Catalyzing Adaptation Finance
  6. 6. Key Barriers to Adaptation Finance Catalyzing Adaptation Finance • Assess needs and priorities, and identify barriers to investment • Identify policy mix and sources of financing • Multiple access channels • Blend and combine finance • Formulate project, progamme, sector-wide approaches to access finance • Implement and execute project, programme, sector-wide approaches • Build local supply of expertise and skills • Coordinate implementation • Monitor, report, and verify flows of results and funding • Performance- based payments Financial Planning Accessing Finance Delivering Finance Monitor, Report & Verify
  7. 7. Mainstreaming or earmarking funding for adaptation? Ideally full mainstreaming, BUT: • No appropriate M&E systems in place • How to make sure that the most vulnerable would be targeted? • Separate funding required for capacity building and enabling conditions • Some countries /sectors prefer to have stand-alone adaptation strategies, plans, programmes Catalyzing Adaptation Finance
  8. 8. How to adapt existing regulations and policy instruments • Clarity of the legal framework is critical • Technical capacity and knowledge of personnel in the various sectors is a major inhibitor to adoption of new technologies and approaches • Cross sectoral approaches may help reduce the need for additional funding Catalyzing Adaptation Finance to the adaptation needs? Are there opportunities to reduce public spending and support resilience?
  9. 9. 9 Focus of UNDP’s Work on Climate Finance Readiness Catalyzing Adaptation Finance ACTION ON THE GROUND CAPACITY ENHANCEMENT BARRIER REMOVAL POLICY DIALOGUE • Policy development: How is CC policy formulated? Are national CC strategies developed? • Provide a framework for sector-wide approaches & to incentivise private investments • Institutional structures: What are roles & responsibilities of institutions involved in managing CC response & their interaction? • Public financial management: How to quantify & track CC-related expenditures in the budget? • Developing bankable adaptation projects including training on the economics of adaptation NAP-GSP, LECB, CPEIR LDCF/SCCF/AF/Bilateral financed projects NAP-GSP, LECB, CPEIR, LDCF/SCCF/Bilateral financed projects CPEIR Economics of Adaptation
  10. 10. 10 Partnerships – A Must! Catalyzing Adaptation Finance ACTION ON THE GROUND CAPACITY ENHANCEMENT BARRIER REMOVAL POLICY DIALOGUE LDCF/SCCF/AF/Bilateral financed projects NAP, Climate Readiness, Economics of Adaptation, Evidence Based Result Tracking www.undp-alm.org