Download Adaptation Structural Options

Adaptation Structural Options
Jake Schmidt, Senior Policy Analyst
Center for Clean Air Policy
********
Dialogue on Future International Actions to
Address Global Climate Change
Stockholm, Sweden
16-19 May, 2004
Estimated Funding for Adaptation between 2000-2012
(in million $US)[1]
Special Climate Change Fund[2]
$3,320[3]
Adaptation Fund
$10-15[4]
Least Developed Countries Fund[5]
$16
GEF Trust Fund
$140[6]
Other
??
Total
$3,486
Source: Author’s Calculation
[1] This estimate is intended to provide an order of magnitude assessment and does not pretend to be a comprehensive assessment or list. Some
sources of funding are likely to be left out and the funding levels depend on a variety of factors that have yet to be clearly defined.
[2] The Special Climate Change Fund provides money for other things than adaptation (e.g., technology transfer). Shown is the total amount
promised for the SCCF to provide an estimated maximum amount. The amount for adaptation is expected to be less than this total amount,
since some will be dedicated to other SCCF priorities.
[3] The political declarations made in Decision 7/CP.7 stated the group would contribute $410 million annually by 2005, with this level to be
reviewed in 2008. It is assumed that this level of funding is provided for an eight year period (2004-2012). It is unclear how this money will
be allocated among the three funds. Here, it has been allocated solely to the SCCF for simplicity.
[4] Based upon estimated value of CER market of $500-750 million dollars (PointCarbon, 2003). Point Carbon estimates that this value may
increase as key players appear far from their Kyoto targets.
[5] As of June 2003, the total committed to the LDC Fund was $16 million (UNFCCC, 2003).
[6] GEF, 2003 shows values for FY05 of $10 million and $20 million in FY06 and FY07. It was assumed that funding levels would continue at
$20 million through FY11 and that half of the FY12 funding would be available since the fiscal year cuts across the calendar year.
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Structural Options for
Adaptation
Linking mitigation and adaptation
! Mainstreaming and integrating
adaptation and sustainable
development
! Insurance-related approaches
! Others?
!
Mitigation and Adaptation
!
!
!
Combining mitigation and adaptation projects
to increase feasibility by increasing funding or
removing other barriers
Use of CDM, ODA, or other funding?
Role of alternative approaches, for example:
» Sector CDM
» Policies as projects
» Adaptation CDM (A-CDM)
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Example Mitigation and
Adaptation Actions
!
Preserving or replanting mangrove
ecosystems
» Promotes carbon sequestration and minimizes
damages from storm surge
!
Farming techniques that reduce water needs
» Could reduce energy demands for irrigation and
reduce susceptible of farming technique to reduce
water supply
!
Modified building codes
» Combining changes to building codes so that
buildings are less susceptible to extreme weather
events and are more energy-efficient
!
Others
Adaptation and Sustainable
Development
!
Adaptation and sustainable development
(SD) are intertwined:
» Enhancement of adaptive capacity entails a
variety of similar actions to sustainable
development (e.g., improved access to resources,
poverty reduction, and improved infrastructure).
» SD can be hampered by the impacts of climate
change
» Some SD actions could lead to maladaptation.
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Development Funding
Net Resource Flows from OECD to Aid Recipients
Official development
in 2002
!
assistance (ODA)
5%
Official Aid (OA)
26%
9%
Other ODF
3%
6%
Total net ODA
disbursed in
2002 was $58.3
billion—0.23
percent of GNI
» Anticipated to
increase to
$76.8 billion for
2006—0.29
percent of GNI
(OECD,
2004b).
Direct investment
International bank lending
3%
2%
Total bond lending
Other (including equities)
46%
Grants by NGOs
Source: OECD, 2004b
2002 ODA Disbursements in Select Sectors
Million $
% of Total
Health
2,425
5%
Water Supply and Sanitation
1,295
3%
Transport and Storage
2,745
6%
Energy
2,133
5%
Agriculture
1,714
4%
Forestry
220
0%
Fishing
149
0%
Tourism
10
0%
General Environment Protection
1,280
3%
Food Aid excluding Relief Food Aid
1,398
3%
Emergency Assistance
3,377
7%
16,746
37%
Total in Highlighted Sectors
Source: OECD, 2004a
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Mainstreaming Adaptation and
Sustainable Development
!
!
!
Some have supported the need to
“mainstream and integrate adaptation and
sustainable development”.
Mainstreaming is where adaptation
responses are considered into sustainable
development processes (AfDB, 2003).
Integrating is when specific adaptation
measures are added to design and
implementation strategies (AfDB, 2003).
Mainstreaming (cont.)
!
!
Some specific mainstreaming approaches have been identified
(AfDB, 2003)
For development agencies and donors:
» Analyze projects and practices that show how translation of adaptation
into project design will provide real benefits;
» Start implementing adaptation activities where sufficient information is
available (including more proactive disaster prevention and
preparedness); and
» Implement priority adaptation activities identified by the UNFCCC.
!
For gov’ts in developing countries:
» Incorporating climate change adaptation in Poverty Reduction Strategy
Plans;
» Integrate climate change management in the economic planning and
budget process to ensure proper planning, financial management, and
prioritization amongst competing resource demands;
» Strengthen the links and coordination between government agencies
working on sustainable development, climate change policies, finance,
economic affairs, planning, and specific sectors.
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Possible Advantages of
Mainstreaming
!
!
!
Ensures consistency with adaptation and
poverty eradication needs.
More efficient means which can avoid
duplication of efforts.
Larger share of funding potentially available.
» Funding for ODA could be twice as much as
funding for adaptation
Possible Disadvantages of
Mainstreaming
!
Mainstreaming may not imply additional funding
» But may simply replace ODA funding for other purposes.
!
ODA funding may not necessarily go to countries
with the highest adaptation needs
» Distribution of ODA is based upon a number of factors not
necessarily intertwined with adaptation.
» Some countries garner a large share of ODA funding
!
Development of NSDS or PSRP
» OECD supports distribution of ODA funding based upon the
priorities outlined by recipient countries in their NSDS or
PSRP
– Some countries may not have the resources to conduct such
processes
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Some Options for Mainstreaming
and Integrating
!
!
!
!
!
!
Alter the priority of sustainable development
projects so that adaptation approaches are
more favorably viewed by development
agencies.
Set aside a specific portion of existing ODA
explicitly for funding adaptation projects.
Develop adaptation guidelines for sustainable
development funding
Develop debt-for-adaptation projects
Increase ODA funding explicitly for adaptation
Others?
Bahamas tourism case study CDERA 2003
!
!
!
!
!
!
Tourism - key to sustainable development
With frequent hurricanes, and external events (9/11),
insurance rates rising.
Expensive insurance cover impedes development.
In Caribbean, tourism provides 2 million jobs, 14% of
regional employment, 14.3% of GDP.
Bahamas, Antigua-Barbuda, St.Kitts-Nevis,
Montserrat, Anguilla - direct and indirect impact of
tourism on GDP is over 50%.
Tourism infrastructure concentrated on coast.
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Possible Insurance-related
actions
International Support for:
!
!
!
!
!
!
!
!
Incentives that offer insurance in exchange for risk reduction
(building codes, retrofitting)
Reinsurance schemes
Creation of national insurance or disaster funds (FONDEM,
FNDRRF)
Regional, inter-regional risk pools to lower cost of insurance
Alternative risk transfer mechanisms (catastrophe bonds,
catastrophe insurance, weather hedges)
Public-private partnerships (TCIP, CAT-NAT, NFIP)
Small States insurance schemes – triggers/debt servicing relief
Micro-insurance schemes
Some Key Adaptation Issues
!
Building additional support for more detailed
vulnerability & adaptation (V&A) assessments
in priority sectors
» e.g., agriculture and food security in Africa
!
!
!
!
Eligible projects?
Incremental?
Global vs. local benefits?
Others?
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Questions for Discussion
!
!
!
!
How to address these key issues?
Are there other adaptation “structural” options?
What combination of approaches? These or others?
How should a mitigation and adaptation approach be
structured?
» What form could it take (e.g., A-CDM, removal of other barriers,
etc.)?
!
What role for mainstreaming and integrating adaptation and
sustainable development?
!
What role for insurance?
» What options are most promising/problematic?
» For what impacts would insurance approaches be most appropriate
(e.g., weather-related extremes?, agriculture?, public
infrastructure?)?
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