Adaptation and adaptation finance in the 2015 regime. Presentation by Mizan R. Khan, Dept of Environment Science & Management, North South University, Dhaka

1. Adaptation and Adaptation Finance in the
2015 Regime
Mizan R. Khan, Ph.D
Professor
Dept of Env Science & Management
North South University, Dhaka
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CCXG Global Forum
OECD/IEA, Paris, 16-17 Sept 2014

2. Evolution of Adaptation in the CC Regime
• Thinking of adaptation began as an afterthought in the initial CC
regime
• It was right : mitigation was & still is viewed as the ultimate
solution
• But adaptation gradually moved onto the centre stage, due to:
– Extremely slow progress in mitigation
– IPCC AR3 in 2001 produced evidence of increased climate disasters
– Adaptation was held back by disunity within the G77
– Then a consensus emerged that antecedent deposition of GHGs for
long, accompanied by non-mitigation warrants more focus on adaptation
– COP13 brought in adaptation as one of four regime pillars, followed by
adoption of the Cancun Adaptation Framework at COP16 in 2010
– Loss & Damage as an agenda was included in the CAF, though
controversy persists over its due status & role

3. Emerging Debate over a Global Goal on Adaptation
• Establishing a global goal for adaptation to balance with
mitigation, for scaling up its implementation, with adequate
support
• Mitigation and adaptation needs to be addressed in the context
of the agreed 2°C T0 limit, in accordance with Article 2 of the
Convention: there are largely two schools of thought:
– A global goal for adaptation is to be established as a function of
mitigation, which would determine the means for implementation
(finance), under different T0 scenarios. Thus, the support needed for
NAPs & other processes is to be defined ex-ante (quantitative goal).
– A goal is to be defined as the agreed commitment to ensure resilience to
the adverse effects of CC by integrating adaptation into policies/
programs & build capacity accordingly (qualitative goal)
• In fact, the two strands are complementary & the 2015 regime
may reflect that way

4. Status of Funds primarily supporting Adaptation
(million US$, as of June 2014)
FUNDS Pledged Deposited Approved Disbursed
AF 226.3 206.2 225.6 92.3
GCF 54.9 36.7
LDCF 907.0 831.6 641.5 133.2
PPCR 1160.0 973.0 771.8 40.9
SCCF 334.4 299.1 227.5 216.4
GCCA 385.4 385.4 383.2 142.8

5. Status of Funds primarily supporting Adaptation
(in million US$, as of June 2014)
1400
1200
1000
800
600
400
200
0
AF GCF LDCF PPCR SCCF GCCA
Pledged
Deposited
Approved
Disbursed

6. Financial Needs for Adaptation
• Consolidated estimates of financial needs for adaptation shows
a range of $100bn to $450 bn a year until 2030 (Montes 2012)
• Implementation of LDC NAPA projects reveals a need of $4.6
bn, but only $2 bn are estimated to be eligible for int’l funding
• So, there is a huge gap in finance as orders of magnitude
(IPCC AR5 WG II; UNEP Africa Adaptation Gap Report, etc.)
• Estimates so far for global adaptation finance needs face
shortcomings in data, methods & coverage
• National adaptation plans (NAPs) are the main vehicle for all
DCs to do comprehensive planning and respective financial
needs assessments
• Taking the 20C T0 limit as a common reference for national
planning would make adaptation more concrete and cost
estimates more specific

7. Why Adaptation Funding remains Poor!
• Financial commitments of IC Parties can be put under 2 types:
– Assistance under Art 4(3) & under Art 4(4)
– These provide for principles & processes, but they suffer from
`constructed ambiguity’
• Only 18% of the FSF allocated for adaptation & only 16% went
to the PVCs; this is very discouraging
• No agreed definition yet of CF & no operationalization of the
agreed principles
• Part of ODA is given as CF & no problem would have been with
this, once Adaptation is viewed as `development in adverse
climate,’ but from policy point of view, CF is blurred with ODA;
while the former goes up, the latter goes down
• Oxfam (2009): Every dollar diverted from ODA means every
dollar less for direly needed health & education for children in
the PVCs

8. Why Adaptation Funding remains Poor (contd)
• Voluntary bilateral and multilateral funding constitutes the
largest share of adaptation finance, while democratic fin
institutions under the UNFCCC command little CF
• Private sector appears not interested in financing adaptation
particularly in the PVCs; they are initiating actions for their
business & financial risk management; they appear more
interested in soft loans mostly for low-carbon development
• Adaptation suffers from some conceptual lacuna, embedded in
Art 3(1), providing for cost effectiveness & global benefits from
adopted measures
• My Book: Toward a Binding Climate Change Adaptation
Regime: A Proposed Framework (London: Routledge, 2014)
attempts a reframing of adaptation, as a Global Public Good in
an era of `global commons’ problems

9. Adaptation Benefits – Expanded View
Local private
benefits
Local/nat
public
benefits
Direct global
benefits
Indirect global
benefits
Value of saved
crops for
individual
farmers;
Improved
water storage
for
households
Flood-proofed
infrastructure;
Afforestation
preventing
mudslides;
Coastal
afforestation as
wind and flood
breaks;
Build water
storage
Control of
climate-sensitive
infectious
diseases;
Protection of
climate-sensitive
biodiversity;
Agricultural
research on
flood-and saline
resistant crops
Continuation of
statehood by many
SIDS;
Avoided international
migration;
Lower price volatility on
climate-sensitive
agricultural products;
Enhanced purchasing
power among the > 100
PVCs & communities;
In sum, increase in
global peace & security

10. Other Problems in Adaptation Fin
• Extreme fragmentation of delivery of CF among old & new
agencies, resulting in a lack of coordination within & among
donors; this compromises aid effectiveness & MRV of finance in
DCs as well
• Historical relations between ICs & DCs stand in the way of
thematic & geographical balance
• GEF or MDB funding has extremely slow project cycle, which
promotes bilateral funding
• Excessive and varied administrative & reporting requirements
for accessing adaptation finance, coupled with inadequate
capacity in many PVCs
• So the GCCA recommends for joint programming & joint
financing, harmonization & simplification of procedures of
accessing funds

11. How can the 2015 Regime help scale up Adaptation?
• CC is global both in its cause & effect: the problem caused mainly by major
polluters pushed all nations, rich & poor, into a `vulnerability
interdependence’; so is the need for recognition of adaptation as a GPG
• Linking adaptation needs with the level of mitigation will provide for an
operational expression of the 20C limit of T0 increase; this will allow for a
clear orientation for national vulnerability assessments
• Recognition of such a linkage will facilitate operationalizing the global goal of
adaptation, denominated in national-level actions and support needs
• Adequate capitalization of the GCF with a clear roadmap up to 2020 (GCF
Board’s decision of 50:50 allocation for adaptation and mitigation, plus 50%
of adaptation finance for the PVCs are steps in right direction)
• Strengthening the consideration of trans-boundary aspects of adaptation
(e.g. mountain ranges, shared rivers and drainage basins, migration, etc.)
• Overall, adaptation in the new regime should have an integrated approach,
with other work streams, especially NAPs and Loss and Damage. The 2015
regime must operationalize the Warsaw Int’l Mechanism on L&D

12. Mobilization of Adaptation Finance
• The prime need for upscaling of mobilization & delivery of CF is
a robust system of MRV in both donor & recipient countries;
Review of common reporting format based on BA; CF
Readiness Program to be strengthened, which will speed up
direct access modality (demand/pull factors & supply/push
factors of CF)
• CC is universally recognized as the `greatest market failure,’ &
its correction process is led in each country by the govts
• So, internalization of externalities from increasing GHG
emissions appears the lead solution – a culture of funding the
solution, not the problem; this may need a differential approach
across the UNFCCC Party-Groups
• Some ICs define the threshold of measuring `new & additional’
finance relative to ODA

13. Mobilization of Adaptation Fin (contd)
• UNSG’s AGF, G20, UNFCCC & some other authoritative
reports have identified a good number of int’l public sources
• Now it’s time to zero in on some of them, over which there is
near consensus: without agreeing to some `auto-generation
mechanisms’ of int’l public financing, adequate & predictable
financing will never be available
• Another new instrument of mobilizing additional adaptation
finance could be a scheme that would charge countries for
exceeding their emission budgets under the 2015 regime &
transfer the money toward adaptation support
• Role of private sector in adaptation is growing, through their
business & financial risk management; huge liquidity is around
in Green Bonds & other global funds, but they will benefit
mostly the MDCs in low-carbon development

14. Mismatch of CF with A Climate Changed World
• IPCC AR5 & some other authoritative assessments (IPCC
2012; WB 2012; IEA 2012) warn of runaway CC
• Here is a statement of W.Churchill, a veteran British politician in
the House of Commons on 12 Nov 1936, which sounds as if it
had been written for today’s intractable climate negotiations:
So they [the Government] go on in strange paradox, decided only to
be undecided, resolved to be irresolute, adamant for drift, solid for f
luidity, all-powerful to be impotent…Owing to past neglect, in the face
of the plainest warnings, we have entered upon a period of danger…
The era of procrastination, of half measures, of soothing and baffling
expedience of delays, is coming to its close. In its place we are
entering a period of consequences….We cannot avoid this period, we
are in it now…”
(http://www.churchill-society-London.org.uk/Locusts.html.

15. Thanks for Your
Kind Attention!