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Fusing adaptation and mitigation funding: A lofty goal?

The clear separation of adaptation and mitigation in the international negotiations has become a major barrier to promoting synergies.
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At a glance :

  • Even though evidence shows adaptation and mitigation can work together on the ground, no financial instruments explicitly support both.
  • Forthcoming study explores integrated funding approaches such as Global Environment Facility’s incentive mechanism: For every $3 of investment in projects dedicated to two or more areas (e.g. land degradation, climate change and biodiversity), $1 is added.
  • Three areas for future focus:
    • Quantify adaptation benefits
    • Improve statistics, track financing flows, disaggregate data
    • Adjust funding criteria to support joint activities

At international negotiations, adaptation and mitigation to climate change are often discussed in different rooms by different representative bodies. Mitigation, like an only child, has long been favourited by policymakers, donors and project developers. Adaptation on the other hand has only been granted a sliver of this attention and funding.

The situation on the ground could not be more different. Adaptation and mitigation are rather treated as siblings – interconnected and interdependent, and recognized as such.

Take landslides as an example. Communities around the world are undertaking a number of approaches to protect themselves from this natural disaster, often utilizing ecosystems and the services they provide.

Re-vegetating steep slopes with fast growing tree and shrub species is an example of an adaptation measure to landslides. These trees can also absorb carbon from the atmosphere (mitigation benefits) and produce valuable timber for construction or firewood (adaptation and mitigation benefits).

Sometimes there are tradeoffs and these need to be recognized and managed. For example, some tree species suck out a lot of groundwater, making it difficult for communities to grow crops and increasing the risk of fire.

In this case, the choice of suitable trees for the right places and purpose is crucial. Similarly, if mitigation initiatives (e.g. REDD+ and renewable energy) are well designed they can provide additional benefits to local people that support their resilience to climate variability.

The clear separation of adaptation and mitigation in the international negotiations and, as a result, the separation of funding has become a major barrier to promoting synergies, even though evidence exists of how adaptation and mitigation efforts can work together on the ground.

We are in a time where financial resources are constrained. So the question now is: how can we ensure that investments in mitigation can overlap with communities’ adaptation, biodiversity conservation and land degradation goals?

What is the state of funding for adaptation?

In order to assist countries in shifting towards low carbon and climate resilient development the international community provides substantial financial resources through a variety of mechanisms.

Most of the funding is spent on mitigation activities, which represent 77 percent of the total climate financing approved since 2004.

Adaptation has been receiving 15 percent, slowly increasing compared to previous years thanks to public funding that play a major role in financing these interventions.

The remaining 8 percent of climate finance goes to multi-purpose projects, but the linkages between adaptation and mitigation are not necessarily explicit or synergetic.

Fig-1-Adaptation_Mitigation_pie-chart

The forestry and agriculture sectors combined are the main recipients of public funding for adaptation.

Comparatively, forestry and agriculture are the third recipients for mitigation funding (after the energy and transport sectors).

However, there are currently no financial instruments that explicitly support both adaptation and mitigation.

This is clearly not efficient: without much additional funding, we could do both adaptation and mitigation with the same forest and agriculture activities. Or we could at least avoid doing one at the detriment of the other.

We only have a few successful stories of existing activities where adaptation and mitigation are working together to achieve project outcomes. Researchers need to focus on clarifying the conditions under which synergies can be harnessed and trade-offs avoided.

Integrated funding options

In a forthcoming study, we examined a number of innovative initiatives that have emerged from funds and bilateral organizations to promote a more integrative approach to climate change adaptation and mitigation.

In July 2012, the World Bank expanded its reporting requirements to include more detailed information on the contributions of its commitments for low-carbon and climate-resilient development. The system tracks co-benefits for adaptation and mitigation at the project level based on the internationally recognized “Rio Markers” on climate change.

Fig-2-Adaptation_Mitigation_Recipients

The Rio Markers monitor the aid provided by 26 OECD members’ countries targeting the objectives of the “Rio Conventions” on Biodiversity (CBD), Desertification (UNCCD), and Climate Change Mitigation and Adaptation (UNFCCC). The adaptation marker was the last to be established.

The Global Environment Facility (GEF) during its last refurbishment period that will end this year, introduced an incentive mechanism so that for every $3 of investment from resources dedicated to two or more focal areas (i.e. land degradation, climate change and biodiversity), $1 will be added to support the project being proposed. This has resulted in an expansion of investments in integrated approaches. The GEF has decided to continue this funding modality until 2018.

A promising new initiative is the Green Climate Fund (GCF), which is currently in its design phase and expected to be operational in 2014.

According to a request by the UNFCCC COP, the GCF will balance the allocation of resources between adaptation and mitigation activities and “an integrated approach to funding mitigation and adaptation will be used to allow for cross-cutting projects and programmes”.

Fig-3-Adaptation_Mitigation_Incentive

In the coming years, we will encounter another opportunity to see how mitigation funding could influence adaptation at the local level.

Once REDD+ enters the implementation phase, payments for verified emissions reductions will be shared to final beneficiaries. These rewards can include cash or in kind contributions that are distributed directly to households or through community or government institutions.

In both cases, REDD+ finance will provide additional resources that could be invested to strengthen livelihoods, capacities or infrastructures that can have positive repercussions on communities’ aspiration for development and resilience to climate change.

Where could we see further progress?

There are three areas where we are keen to see further progress in the next few years:

1. Measuring adaptation: Preserving forests – through REDD+ or other mechanisms – has a lot of benefits beyond decreased emissions. These are often called “non-carbon benefits” and include conservation of biodiversity, improved water quality, stabilization of soil, ecotourism, and clarification of land tenure.

As you can imagine, quantifying such intangible benefits in order to check for changes and reward countries for safeguarding them is difficult and is an issue that researchers and policymakers alike are currently grappling with.

The same is valid for adaptation to climate change – we have a lack of clear indicators. If we were able to measure adaptation it would be easier for the international community to agree on what can be considered as “adaptation finance” and increase the willingness to pay to preserve valuable goods and services.

2. Follow the money: There is also a need to improve the statistics and track financing flows, especially for private investments whose figures are extremely uncertain due to their diversity and the voluntary basis of reporting.

If data could be disaggregated by purpose, sector, regions, and changes over time, we could better understand the actual amount of adaptation finance reaching vulnerable countries. This would also help funds managers make strategic decisions about how and where to disburse funds.

3. Adjust funding criteria to support joint activities: Finally, current funding criteria and operational plans could be adjusted within the existing flexibilities to offer opportunities and facilitate the support for more explicit joint adaptation and mitigation activities.

Communities exposed to climatic variations will not distinguish the technicalities mentioned above. But they will probably appreciate the multiple benefits and the reduced side effects brought by an appropriate landscape intervention.

Giacomo Fedele is a research fellow specializing in integrated approaches to climate change at the Center for International Forestry Research. 

Graphics by Jim O’Neill.

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Topic(s) :   REDD+ Peruvian Amazon
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