The long and winding road to adaptation finance

The conference rooms of Paris are far from the plains of Malawi where the Mulanje Massif stands alone above sprawling tea plantations.

This year the region of Malawi near the mountain saw flooding rains, the heaviest in 30 years; but then rainy season failed and so did the mist that helps take the edge off the dry season. It is in ecosystems like that where the meaning of climate change is most evident and the need for adaptation most acute.

The problem is that despite all the talk about climate financing, very little of it is available to organizations like the Mulanje Mountain Conservation Trust, an endowment fund for conservation projects working to help people adapt to extreme climate and protect the ecosystems fragile forests, said Carl Bruessow, the executive director of the Mulanje Mountain Conservation Trust.

“Despite the fact that globally everyone’s said that there’s a ‘priority one’ agenda towards addressing climate change, when you as an organization want to apply to get that funding, it’s almost nonexistent,” he told Devex on the sidelines of the 21st Conference of Parties in Paris.

Bruessow’s comments aren’t off the mark. Five years after its launch, the Green Climate Fund, the financing facility forged at the 2009 climate summit in Warsaw where donors committed to contributing $100 billion in overall climate finance, has so far given away only $168 million. Even those disbursements came about only after some last minute scrambling at a board meeting in November to approve the first batch of eight projects.

Some fear that donors will be more enthusiastic about announcing they've reached the $100 billion per year climate finance target, than they will be about ensuring that money is making its way to real adaptation project implementers. Last month the Organization for Economic Cooperation and Development released a report claiming climate change finance already amounted to $62 billion in 2014.

“Where did that money go?” Bruessow asked.

According to some civil society representatives, that question reflects a fundamental weakness in the structure of these negotiations and the agreement they are expected to produce this weekend. The agreement might include top-line funding targets, but in the end it falls to individual countries to determine what is their fair share to contribute.

More commitments, but will funds follow?

Every day in Paris has seen new funding announcements. On Wednesday, U.S. Secretary of State John Kerry announced that the country will double its grant funding for climate change adaptation to $800 million by 2020. Many observers praised Kerry’s commitment, not least of all for the specific information it included.

“If you see all the announcements this week, they’re done in a way that is very untransparent. Donors keep announcing the same amounts of money. They don’t explain whether it is grants or loans. Sometimes it’s unclear whether it’s five-year or one-year,” said Celine Charveriat, Oxfam International’s head of advocacy and campaigns.

It doesn’t help that the people responsible for national budgets aren’t included in the delegations making ambitious pledges, Charveriat said. The United States pledge, for example, will still have to contend with a domestic funding reality that is hostile to climate finance. Republican lawmakers in the U.S. have said they will use budget legislation to block U.S. commitments to the Green Climate Fund. Both the Paris agreement and the U.S. budget deal deadlines happen to fall on the same day — Friday — though both are expected to take longer.

“The big absence from this conference are the finance ministers. At the end of the day you need finance ministers from each country to translate the agreement into national action,” Charveriat said.

Even when individual countries do commit funding for adaptation, that’s not the end of the road. Institutions like the Green Climate Fund still have to turn soft pledges announced at public events like this one into hard commitments that countries actually hand over to the fund’s administrators.

In May the GCF achieved “effectiveness,” meaning it converted half of donor pledges into formal commitments, according to Henrik Harboe, director of development policy at the Norwegian Ministry of Foreign Affairs and co-chair of the GCF. The GCF has gone from pledges to approved projects in less than one year, Harboe pointed out at a COP21 side event in Paris, calling that a “prudent start.”

The board chair isn’t alone in urging prudence when it comes to funding adaptation.

“There’s pressure to spend and there’s a demand for spend, and that doesn’t make an environment that’s conducive to stepping back and [saying], ‘let’s have some good practice principles,” said Mandy Barnett, the director of climate change adaptation at the South African National Biodiversity Institute, which has secured funding from the Adaptation Fund, a smaller grant mechanism that delivers funding for localized climate change adaptation projects.

Challenges channeling funds

The Green Climate Fund, Barnett said, is still just emerging from the high-level negotiation process that created it, not from hard-won experience on the ground. Describing something in international negotiations is not the same as building an effective development finance institution. Pushing money out the door as quickly as possible risks funding the wrong things and failing to deliver on the goals the fund was set up to achieve.

“The negotiators are negotiators. They’ve got a particular skill set to negotiate. They’re not the people that have the depth of practice,” Barnett said. “I don’t think it’s too late. I think it’s the beginning … This is the time for the funds to meet with the development community.”

While it may be true that climate change financiers face political pressure to move money out the door as quickly as possible, the systems they’ve set up to approve organizations for funding can hardly be described as hasty. The accreditation process organizations go through to become “nationally accredited entities” with the Green Climate Fund is rigorous and lengthy by all accounts. The fund currently lists 21 accredited entities, and there are another 60 in the assessment pipeline, according to Hela Cheikhrouhou, the GCF’s executive director.

Before they can access funding, organizations have to satisfy environmental and social safeguards criteria, fiduciary standards, and a gender policy. The fund asks for documentation demonstrating each of those requirements, according to Alberto Paniagua, executive director of Profananpe, the Peruvian trust fund for national parks and protected areas, which was the first organization to secure GCF funding.

Profananpe thought they were all set with the environmental and social safeguards, since they had implemented projects on behalf of other donors that have these policies. But the GCF wanted to see clear documentation that Profananpe had its own safeguards policy written into its operating procedures, not just a willingness to implement according to donors’ guidelines.

Before they can even get to that point, organizations have to demonstrate that they’re not just jumping on the climate change bandwagon.

“There’s a level of certification that involves seeing your annual reports for the last three years, seeing your strategic plan so they can understand that climate change is incorporated in that, not just some little word that says something … There’s a whole long list that you do before you even start,” said Bruessow, who hopes the Mulanje Mountain Conservation Trust will be accredited.

Even if MMCT isn’t accredited, the process will have been worth it, Bruessow said. Otherwise, he wouldn’t have started down this path in the first place.

“You have to put quite a considerable investment into it … and there’s no guaranteed output that’s going to be positive,” he said. “We have a ‘no regrets’ kind of approach … Even if we don’t get to the point of being accredited for some reason, the process is important enough to us — to upscale our capacity, our standards, our processes and procedures. That will be a benefit to us in itself.”

Safeguarding against the risk that scarce climate funds will be wasted by vetting organizations carefully is no doubt crucial. But still, proponents of additional funding say there are plenty of projects ready to absorb money now — and, the only way to learn what good adaptation looks like is to fund more of it.

“The only way of knowing more is investing more,” said Magdy Martinez-Soliman, the United Nations Development Program’s assistant administrator and director of the bureau for policy and program support.

“At the current rates of investment, we are self-prophesying that we don’t know enough, because we’re simply not investing enough in proofing our theories. There’s not enough critical mass of finance to find out whether you could scale, whether you could replicate in more places. And right now, we actually continue piloting adaptation,” he said. “That’s the reality of it.”

The Paris climate talks have been energized by a sense of urgency lacking from previous summits. While commitments to cut greenhouse gas emissions historically dominated the agenda when climate change negotiators gathered in Rio, Copenhagen, Lima or Durban, the immediate burden to adapt — and to finance that adaptation — has taken on larger importance this year in Paris.

With only days left to hammer out an agreement that will set the course of adaptation for years to come, negotiators still have to determine how the burden of financing will be distributed. A top-line commitment backed by a system of voluntary national contributions appears to be winning the day. If that is the outcome, it will be up to civil society organizations to track those dollars — and up to implementing organizations to prove they’re ready for them.

Update, December 14, 2015: This article was updated to clarify that the $100 billion pledged in Copenhagen was not to the Green Climate Fund, but for climate finance in general.

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