Financing Climate Change Adaptation: International Initiatives

Climate change is the key issue confronting humanity today. In addition to raising the specter of looming ecological disaster, it is also the fundamental human development issue of our time. The impacts of climate change will be transferred to human communities in lopsided proportions with the maximum costs transferred to the poorest and the most vulnerable. Evidently then, fighting poverty and fighting the impacts of climate change have a strategic linkage which needs to be explored for effective policy making. Climate change and human development are locked in dialectic, with changes in one affecting the other. Thus many adverse effects of climate change can be forestalled by focusing on development, and this focus can reciprocally help fighting the causes of climate change. The global climate change regime overseen by the United Nations Framework Convention on Climate Change (UNFCCC) is a complex governance mechanism, with responsibility to coordinate climate change action among states. The global solution to the perils of climate change has crystallized in the form of two competing strategies, mitigation and adaptation, with the former aimed at the causes and the latter at addressing the effects of climate change. Since the developed countries have a disproportionately large carbon footprint, mitigation would not succeed without a cooperative framework involving commitments from all advanced industrialized countries. Meanwhile, the socioeconomic costs will continue to be borne by the less developed countries who must adapt to alleviate the impacts. Closer analysis suggests that current global efforts are biased in favour of mitigation at the cost of adaptation which is more germane to human development. Understanding the reasons for this bias is the key to understanding the mystery surrounding global inaction on adaptation and thus development. This article critically explores the history and functioning of the international climate regime to discover these reasons. The second component of a critical analysis is of course the exploration of alternatives towards positive action. Therefore, an evaluation of the potential of 'microfinance' as a strategy for financing adaptation is also a part of this study. Finally, the employment of microfinance as a strategic approach for adaptation efforts at the societal level is conceptualized with the dual aim of creating employment opportunities and thus poverty alleviation, as well as mobilizing the vast human resource currently neglected in the global discourse on climate change. 2

The objective of this paper is to present an assessment of existing and proposed mechanisms to financing climate change interventions in developing countries, and to provide guidance on the best ways to make progress in raising and utilizing such financing. Recent events pose major challenges to the availability and sustainability of public (official and developing countries’ domestic resources) and private financial flows to developing countries. Yet, they also provide an opportunity to implement mechanisms for collective action at a global scale, particularly on issues such as climate change that affect both developed and developing countries.

2010

In the Copenhagen Accord of December 2009, developed countries agreed to provide start-up finance for adaptation in developing countries and expressed the ambition to scale this up to $100 billion per year by 2020. The financial mechanisms to deliver this support have to be tailored to country and sector specific needs so as to enable domestic policy processes and self sustaining business models, and to limit policy risk exposure for investors while complying with budgetary constraints in OECD countries. This paper structures the available financial mechanisms according to the needs they can address, and reports on experience with their application in bilateral and multilateral settings.

2012

Contiene: 1. Purpose and outline of the guidebook -- 2. Overview of financing for adaptation -- 3. Bilateral and multilateral financing sources for adaptation technology projects -- 4. Private financing sources for adaptation technology projects -- 5. Conclusions

2020

reports are not rigorous or systematic reviews; they are intended to provide an introduction to the most important evidence related to a research question. They draw on a rapid desk-based review of published literature and consultation with subject specialists. Helpdesk reports are commissioned by the UK Department for International Development and other Government departments, but the views and opinions expressed do not necessarily reflect those of DFID, the UK Government, K4D or any other contributing organisation. For further information, please contact [email protected]. Helpdesk Report

Stockholm Environment Institute briefing note for the European Climate Platform, 2008

2008

Climatic Change

Beginning as an afterthought in the UN Framework Convention on Climate Change, adaptation as an agenda has come a long way since 1992. With no ambitious mitigation, recent years have witnessed an increasing frequency of extreme climate events, including cross-border or borderless climate risks. Accordingly, the Paris Agreement frames adaptation as a global goal and global responsibility. However, financing for adaptation continues to remain extremely poor, relative to the estimated needs, even though the regime has obligatory provisions for support by developed countries. Why is this so? Why should the majority of the countries, with an insignificant contribution to causing the problem, suffer from increasing climate impacts? How can adaptation finance be enhanced at scale? As a response to these queries, the paper substantiates three claims: (1) that poor funding can be attributed to the territorial framing under the regime that conceptualizes adaptation largely as a local or national public good and, hence, the inefficacy of market mechanisms, (2) that it makes conceptual and political sense to consider adaptation as a global public good, and (3) that such a reframing should make a difference in boosting adaptation finance. In a multi-polar world with different views on adaptation finance, multilateral agencies should lead in promoting the proposed framing.

2017

2018

ACT (Action on Climate Today) is an initiative funded with UK aid from the UK government and managed by Oxford Policy Management. ACT brings together two UK Department for International Development programmes: the Climate Proofing Growth and Development (CPGD) programme and the Climate Change Innovation Programme (CCIP). The views expressed in this paper do not necessarily reflect the UK government's official policies.