New pledges on adaptation finance

The Climate Adaptation Summit brought forward some welcome new pledges from rich countries and aid institutions:

• The African Development Bank (AfDB) and the Global Center on Adaptation (GCA) announced a new Africa Adaptation Acceleration Program (AAAP). The programme will focus on agriculture, infrastructure, youth and innovative finance, mobilising $25 billion to 2025, of which at least 50% will support climate adaptation and resilience. AfdB and GCA will use this to leverage an additional $12.5 billion through other partners.
• German Chancellor Angela Merkel committed a total of 220 million euros extra budget for climate adaptation, in support of vulnerable communities.
• British Prime Minister Boris Johnson launched the Adaptation Action Coalition, a group including Egypt, Bangladesh, Malawi, the Netherlands, Saint Lucia and the UNDP,  that will be working with the Race2Resilience initiative and the UN Climate Action team towards COP26. It aims to accelerate efforts to convert political commitment into tangible action to help the most climate-vulnerable people.
• Canadian Prime Minister Justin Trudeau said that Canada had supported the GCA’s previous Young Leaders Program and would fund its new Youth Leadership initiative.

John Kerry, newly-appointed Climate Envoy for the United States, delighted delegates by promising that Pres. Joe Biden’s government would “make up for lost time” of inaction on climate change during Pres. Trump’s tenure. He did not make any US finance pledges during the summit, Kerry’s first major outing in his new job. However, two days afterward, Pres. Biden signed an executive order pledging that the US would begin developing a climate finance plan immediately, “making strategic use of multilateral and bilateral channels and institutions, to assist developing countries.”

While deeply welcome, the new pledges still leave a long way to go. Ban-ki Moon, the former UN Secretary General, remarked: “We need a 5-10 fold increase in funding for adaptation in developing world”. Only a “tiny fraction” of Covid economic stimulus packages are going to adaptation – he added.

Rebalancing the scales

The Climate Adaptation Summit shone a spotlight on the historic imbalance in funding for climate change adaptation and mitigation. At present, of the US$71 billion in climate finance flows from developed to developing countries, only 19%  is spent on adaptation (according to the OECD 2019 report). Pledges were made at the Adaptation Summit to redress the balance:

• UN Secretary-General António Guterres called for 50 per cent of the total share of climate finance provided by all donors and multilateral development banks to be allocated to adaptation and resilience.

• The World Bank Group committed to maintaining the share of its total climate finance that is earmarked for climate adaptation to at least 50%.  

However, another imbalance came into sharp focus, too: the question of ‘who decides’ how to spend adaptation finance – and who actually gets the money?

There is a problem of ‘high intermediation’ in climate finance, argued Gebru Jember Endalew in an article on the cusp of the Summit. Intermediation is about “funds moving from one organisation to another, to another” which “leads to funds being significantly depleted due to high administration and transaction costs, by the time they reach communities (presuming they get that far).”

 The LDC initiative for effective adaptation and resilience (LIFE-AR), for which Mr Endalew is the Technical Lead, sets out a plan for overcoming these problems, by moving from ‘business as usual’ to ‘business unusual’.

Business unusual

According to Mr Endalew, moving to ‘business unusual’ means putting in practice:

1. Equality: between LDCs and the international community, between government and non-government actors, involving equal decision/making and mutual accountability.
2. Integration: uniting sectors and actors to deliver whole-of-society action.
3. Ownership: enabling LDC countries and communities to lead on the development of climate solutions – and working with existing LDC institutions and systems to build sustainable capabilities.
4. Placing local action at the heart of climate action, where resources are put into local hands with a target of 70% finance flows that support action on the ground in LDCs by 2030.
5. Inclusion: leaving no country and no one behind, challenging social barriers and focusing on gender transformation and social justice.

At the summit, a coalition of 40 governments and organisations also backed the launch of the Principles for Locally-Led Adaptation, which complement these proposals.

The principles are: Devolve decision making to the lowest appropriate level; address structural inequalities faced by women, young people, children, disabled, displaced, Indigenous Peoples and marginalised ethnic groups; provide more patient, predictable and accessible funding so it is long term, flexible and does not come with numerous strings attached; invest in local capabilities to leave an institutional legacy; build a robust understanding of climate change impacts, risk and uncertainty; provide flexible programming and learning; ensure meaningful transparency and accountability; and enable collaborative action and investment.

“I am inspired by the Locally-Led Adaptation Principles,” LDC Chair Sonam P. Wangdi told the summit. “These principles, including the focus on increasing resources to the local level, providing patient and predictable funding and investing in local capabilities, are a serious and meaningful response to the LDCs’ ask of the international community as outlined in our vision.

“I ask you to take these principles seriously, not as a tick box exercise, but use them to inspire meaningful improvements”.

It will take more than a 24-hour summit to change the way adaptation finance is programmed, but the strength of the voices from the LDCs and their allies could mark a more permanent change in direction.

All the videos and events of the Summit can be viewed on CAS TV.

Reporting by Mairi Dupar, CASA.