An ecbi Finance Circle meeting took place on 8 November 2016, during the 22nd Conference of Parties (COP 22) to the UN Framework Convention on Climate Change. It was attended by 15 negotiators from developed and developing countries.
ecbi director Benito Müller made a presentation on the Adaptation Fund, saying its current lack of resources posed a grave danger to its future sustainability. With resources from the Clean Development Mechanism having dried up, it is now entirely dependent on voluntary bilateral contributions for its resources. He pointed to the need for the COP serving as the Meeting of the Parties to the Kyoto Protocol (CMP) to respond to the request for guidance by the Fund’s Board on whether the Board could consider accreditation with the Green Climate Fund (GCF). Müller argued that through such accreditation, the Adaptation Fund could become a “boutique” or “retail” outlet specialising on adaptation finance, allowing the GCF to remain a “wholesale” fund, and to function at scale without administrative bottlenecks. He pointed to Adaptation Fund’s capacity to deal with nano and micro projects.
Müller said ensuring resources for the Adaptation Fund was even more important that the pending decision on whether the Fund should serve under the COP serving as the Meeting of Parties under the Paris Agreement (CMA). The decision to let it serve under the CMA could bring in resources later, in the form of “shares of proceeds” from the trading mechanisms of the Paris Agreement, but there was a great deal of uncertainty on whether the mechanisms would yield sufficient resources, or indeed whether the shares of proceeds would be earmarked for the Adaptation Fund. In any case, he said, by the time the mechanisms are functional, the Adaptation Fund could already be rendered non-functional due to the lack of resources. Reminding participants that the Adaptation Board had specifically sought guidance from the CMP, he said not providing this guidance would also send a signal.
Participants then discussed the time it would take to get accreditation from the GCF; the suitability of the Adaptation Fund to get accredited; the existing fund raising strategy of the Adaptation Fund; and possible impacts by the share of proceeds from the CMA market mechanisms.