Transcript Strengthening the Adaptation Fund

Strengthening the Adaptation Fund:
Review of Potential Sources
African Climate Policy Centre (ACPC)
The Energy and Resources Institute
(TERI)
Estimates of adaptation costs for Africa
Adaptation funding for Africa
(in US$ million, as on 28 March 2012)
Total
pledged
Dedicated funds for adaptation
Adaptation Fund
Pilot Programme for Climate
Resilience
Special Climate Change Fund
Least Developed Countries Fund
Sub-total
Other funds for adaptation
International Climate Initiative
Global Climate Change Alliance
GEF Trust Fund - climate change
focal area (GEF5 2010-14)
Sub-total
Total
Approved for
Sub-Saharan Africa
Disbursed to
Sub-Saharan Africa
116
1208
34
73
6
1
217
415
1956
20
107
234
16
75
98
851
226
1.5
12
60
1
3
1
1079
3035
73
307
4
102
Source: Climate Funds Update website
Note: GEF5 figure shows funding marked for multiple foci (not specifically adaptation).
The Adaptation Fund
•
•
•
•
Financing concrete adaptation activities
A more inclusive governance structure
Direct and indirect access model
Innovative financing approach
Sectoral distribution of projects identified in
African NAPAs
6%
Food and Agriculture
4%
26%
8%
Water Resources
Terrestrial Ecosystems
8%
Coastal Zones/Marine
Ecosystems
9%
18%
Early Warning and
Disaster Management
Health
21%
Energy
Source: UNFCCC (2012)
Sectoral and geographical distribution of
projects funded by Adaptation Fund
Country
Eastern Africa
Djibouti
Eritrea
Madagascar
Mauritius
Tanzania
Northern Africa
Egypt
Western Africa
Mauritania
Senegal
Amount (US$)
30,412,135
4,658,556
6,520,850
5,104,925
9,119,240
5,008,564
6,904,318
6,904,318
16,422,605
7,803,605
8,619,000
Source: Adaptation Fund website (accessed on 9 August 2012)
Sector
Agriculture
Agriculture and water
resources
Agriculture
Coastal
Coastal
Food security
Food security
Coastal
The case for strengthening the
Adaptation Fund through
Additional Revenues
• The main source will be dwindling
– Price of carbon expected to decrease
• 3 countries moving out of the Kyoto Protocol
• Less ambition
• Unilateral measures
• The demand for adaptation will increase
– Parties start implementing projects after needs
assessment
– Actual and expected changes become graver than
anticipated: improvements in prediction, less mitigation
ambition
Potential sources
• Emissions levy
• Extending the levy on CDM to JI and
International Emissions Trading
• Extending the levy on CDM to the NMM and
various market-based approaches (including
those operating nationally)
• Raising the levy on the CDM
• An international air travel adaptation levy
Potential sources
• Redirecting fossil fuel subsidies
• Carbon taxes
• Auctioning emissions allowances
Requirements
• How much can be raised from a particular
source?
• What are the incentives and disincentives to
reduce emissions associated with a particular
source?
• To what extent a particular source is
consistent with equity, the principle of
common but differentiates responsibilities?
Requirements
• Do we have (or can we quickly to establish)
the right institutional framework to be able to
mobilize resources from a particular source?
• How predictable is the flow from the source?
• Additionality
• Political acceptability
Preliminary assessments
• Emissions levy
– Could potentially generate significant resources
– Provides the right incentives to reduce emissions
and hence minimizing the costs of adaptation
– Scope for lower or no levies on some regions and
countries
– Political acceptability?
Preliminary assessments
• Extending the levy on CDM to JI and
International Emissions Trading
– Revenue depends on demands for credits and
allowances from JI and IET
– Difficult relationship with the incentive to reduce
emissions
– In terms of equity, better than the levy on CDM
Preliminary assessment
• Extending the levy on CDM to the NMM and
various market-based approaches (including
those operating nationally)
– Very important, particularly considering the
potential to generate significant amount of credits
and allowances (sectoral approach) and NMM
could potential reduce the revenue from CDM to
the AF
– Difficult relationship with the incentive to reduce
emissions
– In terms of equity, mixed outlook
Selected proposals to generate climate finance
Bunker fuel
emissions tax
Likely revenue (billion USD/year)
100
Brendenkamp and
Patillo (2010):
SDRs and green bonds
Silverstein (2010):
Rising global
carbon tax
Swiss proposal:
global carbon tax
Norwegian
proposal:
auction
allocations
Ward (2010): 2-tier
debt-equity model
Border cost
levelling
ET levy
1
LOW
Predictability of revenue
HIGH
Source: Adapted from Hof et al (2011) and others