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On the road to Bali: operationalising the Kyoto Protocol Adaptation Fund

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E. Sopoaga
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The Adaptation Fund (AF) was created under the Kyoto Protocol to support adaptation measures on the ground, particularly in very vulnerable countries. It is unique both in the way it is financed and in the potential scale of money generated. This opinion piece, written ahead of the United Nations Climate Change Conference in Bali in December 2007, argues that the AF would be best served with a ‘stand-alone’ operating entity and a decision-making format that genuinely guarantees the authority of the Protocol’s Meeting of Parties over the Fund. While this may mean a delay in setting up and running the Fund, the authors argue that getting the governance and management structures right is essential.  Unlike the other United Nations climate change funds, the AF does not rely exclusively on voluntary donations from industrialised countries. Instead it is currently envisaged that it will be funded mainly through an ‘adaptation levy’ on the credits generated by Clean Development Mechanism (CDM) projects carried out primarily by the private sector of both developed and developing countries. As a result, it could potentially dwarf the amounts of money likely to be made available for adaptation through Official Development Assistance (ODA). The brief argues that the AF be subject to a stand alone governance structure, which could enable the following governance reforms:

making the strategic decisions of the AF subject to the meeting of the Parties to the Protocol (MOP) and the Conference of the Parties to the Convention (COP)
the AF executive body should be made up of financial and adaptation experts
the executive body should be made up of members reflecting not only the UN regions, but also the main interest groups: the most vulnerable countries, including the Least Developed Countries (LDCs) and Small Island Developing States (SIDS), as the intended recipients, and the largest CDM investors, representing the main source of funding
the day-to-day running of the AF could then be delegated to a Secretariat, either housed within an existing organisation or even set up as a separate entity