THE GLOBAL ENVIRONMENT FACILITY:FUNDING FOR ADAPTATION OR ADAPTING TO FUNDS?
and Richard J.T. KLEIN
Climate & Energy Working Paper, Stockholm Environment Institute, June 2007
International support for adaptation to climate change has evolved into an intricate system of financial instruments, including four global funds: the GEF Trust Fund, the Least Developed CountriesFund, the Special Climate Change Fund and the Adaptation Fund. Previous research on adaptationfunding focused on the financial adequacy of these global funds, as well as on economic and ethical di-mensions of the funds’ technical adequacy, as reflected by their efficiency and fairness. This paper as-sesses the funds’ technical adequacy from a governance perspective, as revealed by their responsivenessto the needs of developing countries. These needs are expressed as various forms of guidance on the useof the funds. The paper analyses the adherence by the GEF to guidance from the UNFCCC Conferenceof the Parties, and the adherence by the Implementing Agencies of the GEF to guidance from the GEF.It concludes that the funds are not technically adequate for responding to developing countries’ needs,owing both to the complex design of the funds and to poor implementation of the guidance. This findingmay be of relevance to the development of additional guidance on the Adaptation Fund, as well as con-tribute to discussions on the availability of adaptation funding under the GEF Trust Fund and on the roleof the funds under a post-2012 international climate policy regime.
climate change, adaptation, financial instruments, funding, technical adequacy, adherence,UNFCCC, GEF, Implementing Agencies, developing countries.
The United Nations Framework Convention on Climate Change (UNFCCC) commitsdeveloped countries to assist developing countries in meeting costs of adaptation to theadverse effects of climate change. The World Bank (2006a) concludes that the incre-mental costs to adapt to projected climate change in developing countries are likely to beof the order of USD 10–40 billion per year, whilst Oxfam International (2007) estimatesthis number to be over USD 50 billion per year. The Stern Review on the Economics of Climate Change estimates that if no action is taken to mitigate climate change, overalldamage costs will be equivalent to losing at least 5% of global gross domestic product(GDP) each year, with higher losses in most developing countries (Stern, 2007).The Global Environment Facility (GEF) is currently the entity entrusted with the op-eration of the financial mechanism of the UNFCCC, and as such provides the instru-ments for the transfer of financial resources from developed to developing countries.
The author conducts PhD research whilst also being assigned to the UNFCCC Secretariat as an Associ-ate Expert. The views expressed in this paper are those of the author and do not necessarily reflect theviews of the UNFCCC Secretariat and the United Nations. The e-mail address for correspondence email@example.com.
Stockholm Environment Institute, Stockholm, Sweden.