Financing adaptation: why the UN's Bali Climate Conference must mandate the search for new funds

Climate change Economics Australia

Oxfam estimates that adapting to climate change in developing countries is likely to cost at least $50bn each year, and far more if global greenhouse-gas emissions are not cut fast enough. Yet international funding efforts to date have been woeful. In the year that the Intergovernmental Panel on Climate Change (IPCC) issued its direst warnings to date of the impacts of climate change on vulnerable developing countries, the rich and high-polluting countries increased their contribution to the Least Developed Countries Fund (LDCF) for urgent adaptation needs by a mere $43m. This brings the total pledged to $163m – less than half of what the UK is investing in cooling the London Underground. Worse, only $67m has actually been delivered to the Fund – that's less than what people in the USA spend on suntan lotion in one month.

It is now time for the dissonance between the science and the policy rhetoric to end. But on the evidence to date, rich countries are very unlikely to provide the scale of adaptation finance needed on a voluntary basis. Outcomes at Bali must, therefore, include a commitment to identify and establish new finance-raising mechanisms, so that vulnerable communities in developing countries will have the resources and support they need to protect themselves from the worst impacts of climate change. Oxfam asks that delegates realise the following in terms of adaptation at Bali:

• Rich country delegates must demonstrate their commitments to poor countries in terms of adaptation by living up to their obligations as agreed under the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol. This can be achieved through a 'Bali Mandate' ensuring that adaptation (including finance) is treated on a par with mitigation efforts in the post-2012 negotiating process.

• Delegates must agree to a negotiating track that includes explicit discussion of potential and equitable complementary funding sources for the Adaptation Fund (beyond the Clean Development Mechanism levy). New finance should be agreed and deployed within the first commitment period, so that adequate funding is available for those who need it urgently.

• Delegates must achieve strong consensus on Adaptation Fund management that puts the poorest, most vulnerable communities and countries first. A strong consensus is one in which potential recipient countries are confident that the Adaptation Fund will deliver financing in a timely, efficient, and practical manner. The Adaptation Fund must follow best practice in the delivery of development finance and, where possible, deliver funding through long-term, predictable grants to support poor-country plans for adaptation. That funding should be directed towards the most vulnerable communities, through gender-sensitive programs. Given the Fund’s potential as a major channel of resources to build the capacity of many of the world's poorest people, developing countries must have a strong say in ensuring its democratic and transparent management. So all options - including and beyond the Global Environment Facility (GEF) - must be considered.

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