Adaptation Finance - The Overview Emani Kumar Deputy Secretary General & Executive Director, ICLEI – South Asia

Presentation Outline: © ICLEI 2012www.iclei.org Introduction to climate adaptation finance Global trends (e.g. amount allocated for adaptation finance, Multilateral Mechanisms Where the money is?? Bottom up Finance for Local Governments ICLEI’s Work on adaptation Conclusions

Climate Adaptation Finance © ICLEI 2012www.iclei.org adaptation to climate change has become a major agenda item in international climate policy, in particular under the UNFCCC and also at global and national levels. planning & design of adaptation finance is taking place at all levels.

Costs of Climate Change © ICLEI 2012www.iclei.org Annual Funding Needs 2005 Billion of US$ By YearMitigationAdaptation EC (2009)202094*10-24 African Group (2009) >67 World Bank (2009) UNFCCC (2008)2030> Source: IIED 2010, Briefing, Copenhagen‘s climate finance promise: six key questions

Financial Needs for Adaptation © ICLEI 2012www.iclei.org Estimated global adaptation costs: – World Bank: $ 70 – 100 billion/year until 2030 – UNFCCC: $ 60 – 186 billion needed globally in 2050, $ in developing countries 80% to be spent in cities and out of this 54% will be on infrastructure Bottom-up approach needed – for local governments to be able to access adaptation funds directly

Climate Change Funds

Region-wise Approved Vs Disbursed Source:

Climate Change Funds Funds Deposited ~10 bn USD Pledged ~13 bn USD AFAdaptation Fund134.57m166.65m FAAmazon Fund (Fundo Amazonia)128.91m m CTFClean Technology Fund4073m4936m CBFFCongo Basin Forest Fund143.63m186.02m FCPFForest Carbon Partnership Facility458.7m GCCAGlobal Climate Change Alliance385.36m GEEREF Global Energy Efficiency and Renewable Energy Fund65.66m169.5m ICIInternational Climate Initiative1081m ICFIInternational Climate and Forest Initiative m IFCIInternational Forest Carbon Initiative67.06m189.57m LDCFLeast Developed Countries Fund585.51m604.74m MDG MDG Achievement Fund - Environment and Climate Change thematic window90m PPCRPilot Program for Climate Resilience142.27m1155m SREP Scaling-Up Renewable Energy Program for Climate Resilience450m480m SCCFSpecial Climate Change Fund240m258.58m SPAStrategic Priority on Adaptation50mn/a UN-REDDUN-REDD Programme166.03m173.34m Source: data, accessed June 2013

Financing Adaptation - Multilateral Mechanisms © ICLEI 2012www.iclei.org Current active multilateral mechanisms for financing adaptation to climate change at the global level, including: – Official Development Assistance (ODA), – The United Nation Framework Convention on Climate Change (UNFCCC) Special Climate Change Fund (SCCF), – The UNFCCC Least Developed Countries Fund (LDCF), – The UNFCCC Adaptation Fund, – The World Bank’s Climate Investment Fund’s (CIFs) Pilot Programme for Climate Resilience.

FM- Official Development Assistance © ICLEI 2012www.iclei.org ODA is international public flows that aim to promote development ODAs are grants or loans for developing countries ODA cannot simply be labeled as adaptation funding Climate Change can threaten development So climate change funding should be new and additional to existing ODA

FM- Global Environemntal Facility – LDCF & SCCF © ICLEI 2012www.iclei.org Global Environment Facility (GEF) funds adaptation measures through: - The Least Developed Countries Fund (LDCF) - The Special Climate Change Fund (SCCF) Both funds are voluntary & depending on contributions from developed countries. LDCF was tasked with financing the preparation & implementation of National Adaptation Programs of Action (NAPAs). Currently a total of $605.84million pledged to LDCF and an amount of $585.51million deposited. Only $13.23million dispersed by the LDCF.

FM- Global Environemntal Facility – LDCF & SCCF © ICLEI 2012www.iclei.org SCCF also has adaptation as its top priority. SCCF supports both long-term & short-term adaptation activities in water resources management, land management, agriculture, health, infrastructure development, fragile ecosystems, including mountainous ecosystems, and integrated coastal zone management64. Currently, there is $259.33million pledged to the SCCF, with a total of $ deposited. Only $ dispersed by the SCCF.

FM- Adaptation Fund © ICLEI 2012www.iclei.org The Adaptation Fund - established in became operational in Bali under the Kyoto Protocol It is largely separate & distinct from the GEF. finance concrete adaptation projects and programmes in developing country Parties to the Kyoto Protocol AF is not dependent on contributions of funding from developed countries or ODA and it is a 2% levy on CERs from CDM. AF is pledged at $151.65million & a total of $134.57million deposited. It is very small when compared to both LDCF & SCCF

FM- Fast Start © ICLEI 2012www.iclei.org COP 2010, Cancun delivered the promise of balanced allocation of ‘fast start’ finance between adaptation & mitigation. Funding for adaptation is prioritized for least developed countries, small-island developing States and Africa. A formal commitment by developed countries to collectively provide resources approaching $30 billion for the period to support developing countries’ climate efforts.

FM- Scaled-up funding © ICLEI 2012www.iclei.org COP 18 in Doha offered agreement on scaled-up funding by developed countries: estimated to be at $10 billion a year. COP 18 was a pivotal moment with respect to financing climate change adaptation: as lot of uncertainty between the end of the original fast start finance period, and the $100 billion commitment made in Copenhagen that begins in Developing countries were hoping for some certainty for the interim period, but….

FM- Green Climate Fund © ICLEI 2012www.iclei.org Green Climate Fund (GCF): A new multilateral funding for adaptation Agreed $100 billion will be mobilized annually for both mitigation and adaption activities by the year 2020 Funds are to be new, additional to previous flows, adequate, predictable, and sustained, and are to come from a wide variety of sources, both public and private, bilateral and multilateral, including alternative sources of finance. Design of the GCF was agreed upon in Durban (although many structural elements are still undecided), Currently the GCF complements many of the existing multilateral climate change funds and it may eventually replace or subsume the other funds.

FM- Climate Investment Fund (CIF) © ICLEI 2012www.iclei.org CIF - Four different funding windows - Clean Technology Fund; - Forest Investment Programme - Pilot Programme for Resilience; - Scaling up RE Programme Implemented by National Governments with the support of MDBs in close collaboration with other development partners including UN & bilateral agencies. PPCR programs need to build on NAPAs and use existing adaptation funds Two Phases: Planning & Implementation A total of $1 billion in contributions to the PPCR, but there has only been $8million actually dispersed

FM- Climate Investment Fund (CIF) © ICLEI 2012www.iclei.org As of September 2011, 9 PPCR pilot countries: Bangladesh, Bolivia (Plurinational State of), Cambodia, Mozambique, Nepal, Niger, Tajikistan, Yemen, Zambia; as well as two regional programs in the Caribbean: Dominica, Grenada, Haiti, Jamaica, St. Lucia, St. Vincent and the Grenadines; and South Pacific: Papua New Guinea, Samoa, Tonga. 11 SPCRs have been endorsed and are underway in Bangladesh, Cambodia, Mozambique, Nepal, Niger, Tajikistan, and Zambia as well as Grenada, St. Lucia and St. Vincent and the Grenadines from the Caribbean and Samoa from the South Pacific. All other countries and regions are in the process of finalizing their SPCR design.

Where the money is

Bottom-up Finance for Resilience Initiative launched at Resilient Cities 2011, Bonn Call for inclusion of Local Government in development of funding/financing rules Call for flexible finance of performance upgrade projects devloped bottom-up Call for priority use of public funds for capacity+institution building for demand-driven market

Sources of Funds... © ICLEI 2012www.iclei.org Own funds Provincial/National Tax &Levies Loans, Municipal Bonds PPP Corporate Social Responsibility Carbon Markets

© ICLEI 2012www.iclei.org

© ICLEI 2012www.iclei.org

© ICLEI 2012www.iclei.org What is still missing after COP18? Binding emission reductions Clarity on actions and definitions Clear governance structures for international climate financing Clear definitions for implementation

ICLEI‘s other initiatives.... © ICLEI 2012www.iclei.org Cities Climate Registry (cCCR) Earth Hour City Challenge (EHCC) along with WWF 40 cities climate adaptation activities supported by Rockefeller Foundation GEB/PPP investments Small Grants Programme

In conclusion... © ICLEI 2012www.iclei.org Need for a more funds through various financial mechanisms Call for for clarity in governance, financing architecture & dispersion Governments needs to start working mainstreaming climate & DRR to become factors in conventional planning processes, project design and development decision making. Bottom-up planning process, technical and institutional capacity building and procurement Financial institutions needs to learn integration of resilience as a new design and project performance upgrading Governments start working with their own funds…

Thank you