Over the past eight days, ECO was quite pleased to hear that all negotiators seem to agree on the added value of the Adaptation Fund (AF). Quick reminder: the AF is a successful institution with well-functioning governance which provides full-cost grant financing to small-scale concrete adaptation activities. It is focused on the most vulnerable populations, very often through direct access for developing country institutions. This is exactly the kind of adaptation funding we need €” and we need much, much more of it!.
ECO was surprised that some developed country Parties are pushing to have additional seats on the Fund’s Board for contributors. Though strangely, these are the same Parties opposing a decision encouraging contributions. But contributors who are willing to engage in the Fund’s Board can easily do so through the seats assigned to their region or constituency. Why change something that works?
For ECO, one thing seems very obvious: there is a need to take a clear decision here in Katowice to secure the Fund’s future serving the Paris Agreement. And there is no need to change the AF’s well-functioning model.
The AF does not need changes to its operating model €“ but it will need sustainable, adequate and predictable resources to operate.
ECO notices that for many negotiators, the favourite talking-point on resource mobilization for the AF seems to be the VISA crowdfunding installation at the COP24 main entrance. ECO wanted to find out more, so it passed by the installation and tapped a card, which resulted in ‚¬3 going directly to the Adaptation Fund. ECO knows that the Fund has estimated that it would need an average of US$158 million annually to implement its new Mid-Term Strategy. So, a quick calculation showed that all it would take would be 46,333,333 taps with a Visa card, or 3,861,111 per each COP day, to secure adequate funding.
Problem solved, ECO thought. But then it learned that Visa’s contribution is capped at $75,000. So, we still need a solutionfortheother99.9%ofthemoney.That’swhyECOwas encouraged to see contributors pledge over US$129 million for the Fund at this COP, more than ever before. And yet, some contributors are much more ambitious than others, while some of the richest countries are still missing. It is pastime to step up!
The other source of funding many delegates have in mind is a link to Article 6 of the Paris Agreement. That could work, but it will take time to see how well it works and would subject the Fund to the ups and downs of the carbon market fluctuations. Ask anyone at the Adaptation Fund how well that has worked so far. The AF needs stable and predictable sources of funding to be able to play its unique role in the international finance architecture €“ more stable than a link to the carbon market and more predictable than purely voluntary contributions. At the very least, a COP24 decision on the Adaptation Fund must encourage Parties to contribute to it.