Any view on international finance for climate adaptation in developing countries must deal with the question of the cost of adaptation and how much funds will be available under current conditions. Although existing estimates of adaptation funding needs in developing countries are still very vague, they all indicate that they are and will be in the tens of billions €/$ per annum. At the same time, many developing countries presently do not have the relevant ‘absorptive capacity’, the capacity to carry out the adaptation measures needed, even if the funding were available. This paper argues that there is an urgent need to look into ways of scaling up the provision of adaptation funds for developing countries of the appropriate kind.The author considers how countries can raise the money needed for climate adaptation and highlights the Mexican multicultural climate change fund and the swiss global carbon adaption tax proposal as examples.
Three main points are raised in the paper:
further innovative financing mechanisms, apart from the CDM Adaptation Levy, are needed to fill the adaptation ‘funding chasm.’ The only way to provide funding for developing country adaptation, which is acceptable in the above-mentioned sense, is through international levies on emissions from international maritime transport and aviation/air travel and/or through international auctioning of assigned amount units
internationally, funds for adaptation need to be allocated on a strategic basis and not involve international micro-management at the project level. The strategic allocation of international adaptation funds should not attempt to re-invent the wheel. It should use the existing international bodies and initiatives to allocate funding streams, and not try to duplicate them under a ‘climate change banner'
the governance of the recently operationalised Kyoto Protocol Adaptation Fund represents a milestone in the evolution of international funding mechanisms, as for the first time developing countries have genuine ownership of such an instrument. In the case of adaptation funding, developing country ownership and public transparency of decision making is not only desirable but a prerequisite for success, particularly in the context of mainstreaming activities