ADAPTATION FINANCE BULLETIN |
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UNFCCC Adaptation Committee |
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News from the Green Climate Fund (GCF) |
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Pictured above: GCF Executive Director Yannick Glemarec at COP 26
Photo by UN Climate Change/Kiara Worth
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Various GCF activities at COP 26 - including events, paper launches, and a new project agreement - highlight and advance the Fund's work on adaptation finance.
At the GCF-hosted leadership dialogue held at the margins of the COP, titled Catalysing climate investments in developing countries in the context of COVID-19, leaders stressed the urgency of closing the adaptation finance gap, and the key role that the GCF has to play in doing so.
Another GCF event convened various stakeholders to discuss how to bolster climate early warning systems in Small Island Developing States (SIDS). Almost 90% of SIDS identified development of early warning systems as a priority in their nationally determined contributions. While the GCF has become the largest financier of early warning systems in the world, there are enduring barriers related to budgets, coordination, and market access.
Together with the International Fund for Agricultural Development, the GCF also signed a project agreement during the COP green-lighting a USD 82.8 million investment in support of the Great Green Wall, which will help smallholder farmers in 7 Sahelian countries build resilience to climate change impacts.
The GCF also launched a working paper on innovation during COP 26, which describes barriers to climate innovation in developing countries and outlines how the Fund is helping tackle these barriers through a four-pronged approach: (i) establishing a conducive environment for climate action; (ii) facilitating the emergence of climate innovation; (iii) de-risking market-creating projects that will establish a commercial track record and crowd-in private finance for new climate solutions; and (iv) aligning finance with sustainable development to accelerate the widespread adoption of new climate solutions. |
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News from the Global Environment Facility (GEF) |
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GEF Council Marks 30 Year Anniversary, Approves USD 191 for People and Planet |
Meeting from 7 to 9 December, the GEF Council at its 61st meeting approved USD 191 million in grants and blended finance to support climate- and nature-related initiatives in 43 countries, including 10 Least Developed Countries and 16 small island developing States. The meeting also marked the 30th anniversary of the GEF, which was created in 1991, ahead of the Rio Earth Summit, to support work on a range of environmental issues, including biodiversity, climate change and ozone depletion.
Negotiations related to GEF-8, the next four-year funding cycle slated to start in June 2022, are underway.
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USD 413 million pledged to Least Developed Countries Fund at COP26 |
During COP26, 12 governments pledged USD 413 million in new funding for the GEF-hosted Least Developed Countries Fund (LDCF). The LDCF is the only climate resilience fund exclusively targeting the Least Developed Countries (LDCs), and it plays a key role in addressing adaptation needs of the LDCs, as identified in their national adaptation programmes of action, national adaptation plans, and adaptation communications. |
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Photo by Claudia Fernández Ortiz on Unsplash |
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News from the Adaptation Fund |
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Photo by UN Climate Change/Kiara Worth |
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Adaptation Fund Raises Record-breaking USD 356 Million in New Pledges at COP 26 |
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The Adaptation Fund Board held its annual Contributor Dialogue at COP 26, during which it raised a record-breaking USD 356 million in new contributions from 16 donors, including first-time contributions from the United States, Canada, and Qatar. This far surpassed the Adaptation Fund's previous annual resource mobilization record of USD 129 million, reached at COP 24 in 2018.
This new funding will help tackle the Fund's USD 300 million and growing pipeline of project proposals that are under development but not yet funded.
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Latest from the Adaptation Committee (AC) |
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Photo by Leo Wieling on Unsplash |
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AC Finalizes Information Note on Capacity Gaps in Accessing Adaptation Funding |
Following its 20th meeting, the AC finalized its information note on the topic of Capacity gaps in accessing adaptation funding. Based on submissions from Parties and other stakeholders, the information note highlights capacity gaps in the following areas:
- Raising awareness of climate change impacts and creating enabling environments;
- Making the case for adaptation;
- Navigating and accessing different funding instruments and mechanisms;
- Ensuring capability of the funding seeker; and
- Using and managing funds.
The note also explores lessons learned and good practices that can help bridge these capacity gaps.
Next steps identified in the paper have been included in the AC's new flexible workplan for 2022-2024; this includes holding dialogues at SB 58 and SB 60 on progress in closing the capacity gaps identified, and preparing action-oriented briefs or case studies to demonstrate how such capacity gaps could be closed. The workplan also includes further work relating to adaptation finance, for example the AC’s 2022 synthesis report on costs of adaptation, including assessing and meeting such costs.
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News from the Standing Committee on Finance (SCF) |
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Fourth Biennial Assessment and First Needs Determination Report Launched |
Both reports offer important insights on adaptation finance. The Biennial Assessment reveals, for example, that support for mitigation remains greater than that for adaptation, and adaptation finance has remained at between 20-25% of committed concessional finance across all sources. The needs determination report, meanwhile, finds that while developing country Parties identified more adaptation than mitigation needs, there were more costs identified for mitigation needs; this may be due to gaps in data, tools, and capacity to assess adaptation needs.
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Photo by Muhammadh Saamy on Unsplash |
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Spotlight on Adaptation Finance at COP26 |
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Photo by UN Climate Change/Kiara Worth |
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The critical importance of adaptation finance was a recurring theme throughout COP 26. In addition to the announcements, events, and pledges discussed above, various decisions taken at the conference will have implications for the international adaptation finance landscape going forward.
In the Glasgow Climate Pact, for example, the CMA urged developed country Parties to at least double their collective provision of climate finance for adaptation to developing country Parties from 2019 levels by 2025, in the context of achieving a balance between mitigation and adaptation in the provision of scaled-up financial resources. The COP also urged developed country Parties to urgently and significantly scale up their provision of adaptation finance, and called upon multilateral development banks, other financial institutions and the private sector to enhance finance mobilization for adaptation.
Also, as part of the pact, the CMA reiterated the urgency of scaling up action and support, including finance, for averting, minimizing, and addressing loss and damage and established the Glasgow Dialogue to discuss arrangements for the funding of related activities.
Further, the CMA initiated deliberations on setting a new collective quantified goal on climate finance, and decided to establish an ad hoc work programme from 2022 to 2024 for this purpose.
In its guidance to the GCF, the CMA requested the Board of the GCF to continue to enhance support for the implementation of adaptation projects and programmes informed by adaptation communications, national adaptation plans (NAPs), and other adaptation planning processes.
The COP also undertook discussions on the topic of long-term climate finance, and, in this context, acknowledged that some developed country Parties have doubled their provision of adaptation finance, and requested others to significantly increase theirs. The COP decided that continued discussions on long-term climate finance will conclude in 2027.
What's more, under the rules, modalities and procedures agreed for the new market-based UNFCCC mechanism established by Article 6.4 of the Paris Agreement to contribute to the mitigation of greenhouse gas emissions and support sustainable development, it was decided that a share of proceeds will be levied to assist developing country Parties that are particularly vulnerable to the adverse effects of climate change to meet the costs of adaptation. Specifically, a 5% share of proceeds will be levied, which will be delivered to the Adaptation Fund; this is more than double the 2% levy under the market mechanism established under the Kyoto Protocol - the clean development mechanism - which was also delivered to the Adaptation Fund and formed a key source of its income.
Additionally, the COP decided to extend the mandate of the Least Developed Countries Expert Group (LEG) until 2031, and requested the LEG to continue providing technical guidance and support to the LDCs for advancing the formulation and implementation of NAPs, including in the area of improving their access to funding under the GCF.
Finally, a newly established Glasgow-Sharm el-Sheikh work programme on the global goal on adaptation will seek, among other things, to enable the full and sustained implementation of the Paris Agreement, towards achieving the global goal on adaptation, with a view to enhancing adaptation action and support, and to enable Parties to better communicate their adaptation priorities and implementation and support needs.
Other related decisions taken at the COP include matters relating to the SCF, the Fourth review of the Adaptation Fund, guidance to the GEF, and more. A short explainer of COP 26 outcomes relating to adaptation finance is also available here. |
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UNFCCC Adaptation Committee | https://unfccc.int/Adaptation-Committee
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