Adaptation Fund

The Adaptation Fund at COP24

Germanwatch Adaptation Fund

Woman collecting seaweed at low tide in Zanzibar, Tanzania. Photo: Gray Kotze /

While the future role of the Adaptation Fund was only vaguely defined in the Paris Agreement, the 2016 climate summit in Marrakech set a clear course: the Adaptation Fund is intended to serve the Agreement. This direction was clearly confirmed by the parties to the Kyoto Protocol at the summit in Bonn in 2017. The only major point open to debate now is how and under what terms it should do so. Following on from this process, the negotiators at the climate change conference in Katowice (COP24) now need to make concrete decisions to ensure the Adaptation Fund’s continued existence and effective operation under the Paris Agreement.

In a recent publication, Germanwatch analyzed the role of the Adaptation Fund in the architecture of international climate finance. The organization made concrete recommendations to the negotiators in Katowice to ensure that the Adaptation Fund can continue to occupy its unique position in that architecture and in the global response to the impacts of climate change. In particular, the study aims to stimulate discussions on the Fund’s implementation modalities, environmental and social standards and decision-making structures. In addition to addressing the negotiators in Katowice, the authors also recommend measures to improve the Fund’s work to the Adaptation Fund Board.

Maintaining the special role of the Adaptation Fund

With its various unique qualities, the Adaptation Fund has an important function in the international climate finance architecture. Its distinguishing feature is that it provides funding for small, concrete and urgent projects in developing countries. In addition to its clear focus on vulnerable populations, it offers countries in the global South direct access to finance. In concrete terms, this means that national institutions in developing countries can apply for funding directly, without having to go through an international implementing entity. The Adaptation Fund has played a key role in realizing direct access to international finance. With currently 28 national implementing entities, it makes a major contribution to strengthening institutions in the global South. Since 2010, the Fund has provided more than $532 million for concrete activities to strengthen resilience. Almost six million people benefit from its 80 approved projects.

The Fund has also been a pioneer in many respects with regard to transparency and opportunities for civil society participation. Its environmental and social standards actively promote a human rights-based approach and its gender strategy is sound and robust. Its decision-making body also works well in its current constellation (a slight majority of developing countries), although a greater gender balance could be attained. A COP24 decision on the Adaptation Fund should clearly highlight these points.

Securing the financing of the Adaptation Fund

The open question of how to secure long-term, predictable financing for the Adaptation Fund is a further point that must be clarified at COP24, however. The Fund’s financial resources originally came from a levy on international emissions trading in the Clean Development Mechanism (CDM). However, trading volume and the certificate price have fallen sharply in recent years, leading to the collapse of this innovative financing method. This has left the Fund dependent on pledges from donor countries for the time being – at least until it can present a new, functional and innovative financing mechanism. Germany is by far the largest donor to the Adaptation Fund, having pledged €50 million at both the 2016 climate change conference in Marrakech and the following year in Bonn, thus enabling the Fund to even exceed its fundraising target of $80 million for 2016 and 2017.

At the 2018 conference in Katowice, it will be crucial for Germany and other industrialized countries to send another clear signal on the added value of the Adaptation Fund in the architecture of international climate finance by making financial pledges and ensuring that it can continue its work effectively. In addition to its financial commitments to the Adaptation Fund, Germany should also take a clear stand in discussions on its implementation modalities, environmental and social standards and decision-making structures, and play a constructive role in the negotiations in Katowice.

Julia Grimm, Germanwatch