Adaptation Fund

The Adaptation Fund – more German leadership!

With the recent conclusion of the 17th meeting of its Board, the Adaptation Fund has entered into its fifth year of operation. The meeting marked another step in capturing lessons learnt and further advancing the Fund´s provisions with regard to such critical aspects as the guidance for the consultative process, the consideration of most vulnerable communities, the establishment of complaints procedures and increased transparency regarding the technical review of project proposals. The AFB can be congratulated for increasing its attention towards these issues and for learning from its own lessons.

This is important for the AF at its critical juncture of raising funds for meeting the adaptation needs of vulnerable countries and financing innovative projects that benefit the targeted areas. The prices for Certified Emission Reductions (CERs) which is the innovative and main funding source of the AF have drastically decreased over the last months. Part of this is due to the lack of global ambition in mitigation. The EU, with its Emission Trading Scheme is one of the key demanders of the CERs. However, the current EU target of  20% reduction is not only well below the ambition required by the IPCC with regard to the 2°C limit, but also affects the prospects of the ETS as a functioning setter of price signals for emissions. (Of course, other developed countries lag behind in their mitigation ambition as well).

The direct access  approach of the AF is speeding up with more and more developing countries managing the associated accreditation process, while sadly the funding gap  is increasing, making hardly impossible for the AF to respond all the funding requests.

Only few resources have been dedicated to the AF, despite its innovativeness and its progress.  To address this issue the Adaptation Fund Board has now set the target to raise USD 100 million additional funds by the end of 2013. We very much welcome further contributions to the AF at this point on time to allow the AF to fulfill its role for the years to come. We also encourage all developed countries to put additional money into the Fund. These contributions should enable the AF to abide by the water – until the Green Climate Fund becomes fully operational – by adequately responding the increasing funding demands of developing countries

While Germany has been one of the few countries which have provided resources to the AF. The so far  10 million Euro deposit of the German government into the AF is, however, compared to the funding needs, neither an adequate signal of support and nor of the recognition of the progress so far achieved by the AF. Furthermore, Germany is the legal host of the AF and therefore should show more leadership. Sweden has put more than twice the same amount of money into the AF, in a 2010 and 2011 tranche. Spain, a country which has been affected much more heavily by the economic crisis than the German government, is the top runner, with 45 million Euro. Of course there are still too many developed countries who have not paid into it. (And one could also imagine that some developing countries would support the AF in their own interest, e.g. as a learning tool.)

In addition, it is quite problematic that no one from the German government is following the AFB meetings, which are happening in Bonn. These could actually be used for direct engagement with the AFB members as well as for tracking the progress made by AF.  This could also help better understand the AF and break the prejudice around the AF.

Climate finance will have to be increased in 2013 in view of the 100 billion commitments by 2020 and there should be a piece of everyone´s pie, including Germany´s, for this crucial instrument. This does not undermine the need for substantially larger funding into the “big” Green Climate Fund, which, however, still has to emerge. Germany is also applying with Bonn for becoming the host of the GCF. Showing adequate support for the “small” AF, even if it is only the legal host in this case, can also be supportive for the GCF application.

Sven Harmeling, Germanwatch