Financing Adaptation: For Whom, By Whom, and How

Abstract

It is now beyond reasonable doubt that climate change is happening. The Fourth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC AR4) concluded that even the most stringent mitigation efforts would not avoid further impacts of climate change in the next few decades. This makes adaptation essential, particularly in addressing near-term impacts. Yet mitigation also remains crucial: to rely on adaptation alone would lead to a level of climate change to which it is no longer possible to effectively adapt, or only at very high social, economic and environmental costs. Successful action on climate change therefore must include both mitigation and adaptation. For the last two decades or even more, the literature on climate change, its science, the role of human society, the physical and socio-economic impact has experienced an explosive growth and surge in research and policy analysis on ways in which technology and finance can support mitigation. Similar studies for adaptation are much more recent, and their results therefore less mature. As adaptation is deemed an urgent need, its financing issue is now at the centre of all discussions related to adaptation. Against this background, the major focus of this paper is the financing of adaptation measures in developing countries. Of course, it should be acknowledged that mere financing represents only a part of what is needed in order to adapt to climate change. But to keep the discourse limited to adaptation financing, this paper is organized into the following sections: describing the nature and scale of the adaptation challenge in developing countries, presenting the range of numbers that have been put on the table to estimate the developing countries’ actual need for adaptation funding. Subsequently, the current status of adaptation funding – how much money is currently being channelled through the multilateral adaptation funds as well as potential bottlenecks for post-Kyoto regimes – is particularly discussed in this paper.