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Financing climate change adaptation in developing countries: current picture and future possibilities

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K. H. Flaam
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From its inception, the international climate policy effort has predominantly been focused on reducing greenhouse gas emissions to prevent climate change. The concept of adapting to climate change has, on the other hand, received less attention. There has also been some reluctance towards giving attention to the adaptation issue, for fear that it would be seen as a signal of giving up on combating climate change. This report focuses on generating funding for adaptation, presupposing that the funding in any case represents an important prerequisite for successful adaptation in the world‘s most climate vulnerable regions. The authors describe the nature and scale of the adaptation challenge in developing countries, presenting the range of numbers that have been put on the table to estimate the developing countries‘ actual need for adaptation funding. The report then presents the current status of adaptation funding, how much money is currently being channelled through the multilateral adaptation funds. Particular attention is paid to the Kyoto Protocol‘s Adaptation Fund. The authors point to some of the possibilities that lie ahead in terms of generating additional adaptation funding. All of these alternatives are presented in brief, the purpose being primarily to give the reader a quick overview of some of the possible options that exist. These include:

increasing the current adaptation levy, or expanding it so that it also covers the other flexibility mechanisms such as the Joint Implementation mechanism  and Emissions Trading
applying adaptation levies on bunker fuelled transports
funding adaptation through carbon taxes
using revenues from auctioning of emission permits.