Financing Adaptation was a big topic in Bonn at SB44 last month (see our SB44/APA1 overview here), and rightly so, with the newly released UN Environment Program (UNEP) 2016 Adaptation Finance Gap Report. The report states that current international public finance flows for adaptation are only one-third to one-half the amount needed right now. Additionally, the roughly $22.5 billion in 2014 adaptation finance flows to developing countries will need to be 6-13 times that in 2030, or $135-$292 billion, and 12-22 times that by 2050. That’s $270 billion to nearly half a trillion per year.
In Bonn, we witnessed the launch by the Subsidiary Body for Scientific and Technical Advice (SBSTA) of its process to develop an accounting framework for climate finance under the Paris Agreement (per Decision 1/CP.21), a long-sought goal of developing countries. Other UNFCCC institutions and the secretariat held adaptation finance workshops and updates related to various COP directives. And, side events extended the dialogue, providing attendees insight into the principles of and country experiences with fossil fuel subsidy reform and fuel levies to fund adaptation activities, as well as the critical and growing role of private finance for adaptation programs and projects.
Among the UNFCCC events was the second of two (one each in 2015 and 2016) in-session half-day workshops on pre-2020 long-term finance, held in accordance with 5/CP.20. Executive Secretary, Christiana Figueres, opened the workshop – one of her last activities before stepping down from her celebrated 6-year post on July 6. There were presentations, panel discussions, and breakouts covering topics ranging from enhancing the understanding of adaptation finance and the role it plays in meeting developing country needs, to scaling up and enhancing the transparency of that finance. (Presentation slides and audio can be found here.)
Three of the key needs identified in the workshop represented adaptation financing themes that reverberated throughout the Bonn meetings:
- Scaling up of availability of funds – The UNEP Adaptation Finance Gap starkly underscored this need and buttressed arguments for fossil fuel subsidy reform and fuel levy policies to support adaptation finance.
- A clear definition on adaptation finance to move tracking forward – Though not the most contentious negotiation point in the SBSTA’s agenda item 12 on developing modalities for climate finance accounting (referred to above), the informal consultations were marked by developing countries’ objection to using an un-vetted definition of climate finance (sourced from the 2014 Biennial Assessment and Overview of Climate Finance Flows Report of the Standing Committee on Finance (SCF)). We may see this issue come up again in Parties’ and observer organizations’ submittals of their views on the development of modalities (due by August 29) and in the in-session workshop now planned for SBSTA 45 (Nov. 2016). (Watch for our fuller coverage coming soon on the Bonn negotiations regarding “modalities for the accounting of financial resources provided and mobilized through public interventions” under Article 9.7 of the Paris Agreement.)
- Private sector engagement – This major thread, building on the focus leading up to and at COP21 (see here and here), grew steadily across SB44/APA1, and we expect it’s continued weaving into approaches to address climate change across the board – in mitigation, adaptation and loss and damage. Many are hanging their hopes for sufficient adaptation finance on this sector.
It remains unclear, as yet, how the fast growing requirement for adaptation finance will be met, especially given how far behind current needs the flows already are. We are looking forward to the SCF’s 2016 Biennial Assessment and Overview of Climate Finance Flows, along with a number of adaptation finance events leading up to COP22 to help shed some light on the range and reach of the pathways. Many working on this critical issue are well aware that the price of inadequate adaptation is the tragedy of loss and damage.