The Adaptation Fund

The Adaptation Fund

The Adaptation Fund has been established under the Kyoto Protocol in order to finance the full cost of country-driven concrete adaptation projects and programmes that reduce the harmful effect of climate change, which state, region and communities within them have been confronted.

 

 Short Background on the Adaptation Fund

The Adaptation Fund has been established under the Kyoto Protocol in order to finance the full cost of country- driven concrete adaptation projects and programmes that reduce the harmful effect of climate change, which state, region and communities within them have been confronted.

It was officially set up in 2007, although it was established in 2001 at the 7th Conference of the Parties (COP7) to the UNFCCC in Marrakech, Morocco. One year later in 2008 the legal framework of the Fund was established when its key documents were adopted at the climate summit in Poznan, Poland (COP14). At Poznan, the Parties agreed that the AF should begin to operate as soon as possible as well as decided to give its Board legal status.

The AF has several unique features to do with the way it is owned, funded and governed. 

 


Time Bar

2016: At COP 22 in Marrakesh, the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement (CMA) decided that "the Adaptation Fund should serve the Paris Agreement” following subsequent decisions to be taken at COP24 in 2018. This is a significant step towards the Fund serving the Paris Agreement.

2015: COP 21 in Paris recognized that "the Adaptation Fund may serve the Paris Agreement", subject to relevant decisions by the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol (CMP) and the Conference of the Parties serving as the Meeting of the Parties to the Paris Agreement (CMA).

2013: The Adaptation Fund became the first climate fund to sign up to the International Aid Transparency Initiative (IATI) Standard. Furthermore, the AF decided to develop the Fund’s own Environmental and Social Safeguard Policy, envisioned to be finalized by the last AFB meeting in 2013. As of September 2013, 29 projects have been approved.

2011/2012: In January, the first AF funded project in Senegal has been launched. By March 2012, overall 18 projects have been approved and eleven National Implementing Entities have been accredited.

2011: During the latest meeting the AFB approved for funding projects from Ecuador, Eritrea, Solomon Islands.

2010: The AF became fully operational. It has since then accredited three National Implementing Entities (NIE) and six Multilateral Implemening Entities. It had also approved funding for four projects: Senegal, Honduras, Nicaragua, Pakistan.

2009: AFB makes considerable progress in developing an institutional mechanism which allows direct access to funds, establishing legal capacity and taking steps to set up fiduciary standards.

2008: The guidelines and rules for the work of the fund as proposed by the AFB were adopted by the conference of parities in Poznan (Poland). Also there, it was decided to confer the AFB a legal capacity of the Fund with regard of the direct access approach.

2007: the Parties to the Kyoto Protocol agreed on the institutional arrangements of the Adaptation Fund (AF) at COP17 in Bali (Indonesia). The Adaptation Fund Board has been set up under the authority of, and is accountable to, the Meeting of the Parties to the Kyoto Protocol.

2001: Establishment of the AF under the Kyoto-Protocol in Marrakesh (Morocco)

 


Direct access

The Adaptation Fund enables for the first time in climate finance that developing countries can have direct access to its resources. This is what developing countries have been asking for many years, and represents a break with the traditional model of development aid. The direct access approach aims at simplifying and accelerating the way by which the Fund disburses its resources to the eligible developing countries. The Adaptation Fund Board offers developing countries two access options: 

  • a) direct access via National Implementing Entities (NIEs) in that country, 
  • or (b) via Multilateral Implementing Entities (MIEs), such as national offices of the UN Development Programme or regional banks. 

In both cases the chosen implementing entities have to meet criteria and fiduciary standards set by the Board in order to be accredited as an implementing entity

 


Governance structure

The Adaptation Fund is is supervised and managed by the Adaptation Fund Board (AFB), which works under the authority of, and accountable to, the Conference of Parties serving as the meeting of the Parties to Kyoto Protokol. It is managed by the AFB supported by the GEF providing the secretariat service and the World Bank acting as the Trustee. Both institutional arrangements are on interim basis.

The AFB consist of 16 members and 16 alternates: Non-Annex I countries, Least Developed Countries (LDCs), Small Island Developing States (SIDS), and regional constituencies. All decisions should be taken by consensus, if a consens can not be reached a two third of the Board member is required to have a quorum.
The AFB usually meets four times a year every three months (mostly in Bonn), during which the Board deals with policies and guidelines of the fund as well as considers project proposals for funding. Now the German government has conferred the Adaptation Fund a legal capacity, which allows the fund to enter into contract with its implementing entities.

 


Funding Mechanism

The UN-AF is the first Fund which is supplied by an international income source which originates from an internationally agreed climate policy framework. It is quasi-auto financed from the 2% share of proceeds on emission reductions issued under the Clean Development Mechanism project activity. The Fund’'s Trustee is in charge of the monetization of the CERs received by the Fund according to the the guidelines developed by the World Bank, which has beenapproved by the Fund's Board. 

The inaugural sale of Certified Emission Reductions (CERs) for the Adaptation Fund took place in May 2009. Since then, the World Bank has sold 8.2 million CER Tons, generating $139.1 million. By the end of 2012 total potential resources from CER monetization is expected to be around USD 350 million. Other funding sources include donations from Annex 1 countries, which amounted to ca. USD 80 million as of December 2010.

Focus on the most vulnerable communities

Furthermore the Adaptation Fund set strategic priorities, which stipulates that "by developing project and programmes a special attention should be given to the most vulnerable in developing countries". This is a kind of qualification in order to ensure the sustainability of the project throughout the implementation phase and beyond. It should ensure that the resources has been challenging to serve those who are most in need, without jeopardising the undoubted principle that adaptation priorities need to be identified within the countries and not from outside.

 


Activities and projects

The Adaptation Fund is fully operational and has started to finance project and programme in developing countries. Project proposals are usually put on the AF website several weeks before they are discussed at AFB meetings. In order to allow the public to provide comments on these projects, a specific website facility has been set up at the website of each project.

Germanwatch has developed an Adaptation Fund Project Tracker which provides information on each project considered by the AFB. It is regularly being updated.

>> Adaptation Fund Project Tracker

 


Key Documents of the AF

Key Documents by the AF:

>> Adaptation Fund Handbook

>> Adaptation Fund Brochure

>> Operational Policies and Guidelines for Parties to access Resources from the Adaptation Fund

Key CMP/ CP Documents: 

>> The key decisions by the Conference of the Parties to the Kyoto Protocol (CMP) 

Website: Adaptation Fund

Website: Adaptation Fund on the UNFCC