What you need to know about the Adaptation Fund

Climate change adaptation is finally front and center in these Paris climate change negotiations. Developing countries want to see half of climate finance directed toward adaptation, and they want the initiatives managing those funds to start putting them into implementers' hands. The Adaptation Fund is receiving more proposals than ever. Established under the Kyoto Protocol of the United Nations Framework Convention on Climate Change, the fund was supposed to share in proceeds from carbon emissions reduction credits. But when the bottom dropped out on the carbon market, its board had to go looking for other benefactors. Devex spoke with Marcia Levaggi, manager of the Adaptation Fund board secretariat, on the sidelines of the COP21 Paris negotiations. Here’s what she had to say about the fund, its priorities, and its future: It’s interesting to see this relationship developing between the Green Climate Fund and the Adaptation Fund. A number of the NGOs that have spoken about their experiences have described accreditation with the Adaptation Fund as almost a precursor to accreditation with the Green Climate Fund. Is that the way that you intended this to be, or has that come about naturally? There was a relationship between the two secretariats. When the GCF secretariat was being set up, they visited us, and we of course offered our experience … But then, obviously the entities [that have been supported by the Adaptation Fund], their experiences with the Adaptation Fund are good credentials for trying the same with the GCF. So it came about naturally and some of them have been successful already and there are more in the GCF pipeline. So now it’s, I would say, widely acknowledged that the Adaptation Fund can be a first step for accreditation with the GCF. How should organizations understand the distinction between the two funds? The GCF goal is to work at scale. The Adaptation Fund works with medium or small — which for the GCF is micro — projects. Our projects are up to $10 million. I would say the average is between $7 and $5 million — localized projects, concrete projects that deliver results on the ground. We don’t fund studies unless they are preparatory for developing a project. We fund concrete interventions that build resilience to climate change and that can later be upscaled with funding from other sources and replicated if proven successful. Would it be wrong to think of this as organizations piloting things at the Adaptation Fund level and then taking them to scale at the Green Climate Fund level? The fund … has been characterized as a learning institution by our evaluators. Yes, these are learning experiences that, if proven successful, can later be replicated. Adaptation so local, so linked to the community level, I think we cannot think about one solution for a country. A country has to try different options based on geographical, social, and number of reasons for tackling the effects of climate change at that community level. But it’s undoubtedly a learning experience that later on can be upscaled. You received a record number of proposals for consideration in your previous board meeting. Given that wide interest in accessing financing from the Adaptation Fund, what are some common mistakes or misconceptions that organizations have when they bring their proposals to you? Are there any common red flags that you see or just misunderstandings about what you’re looking for? Some gaps we see are entities that are not very thorough in doing the community consultations. That is a very important aspect … that takes time. If you want to rush a proposal, well you are going to leave outside a number of stakeholders that need to be involved, and if you don’t involve them you will have problems in project implementation. So, we try to review these gaps at the project review stage and make them really be rigorous in consulting all these stakeholders. Also the environmental and social policy of the fund, which was approved in late 2013, is something new for some of the entities … Now we have a very specific policy with 15 principles that go from human rights to labor rights, greenhouse gas emissions that need to be avoided. All this requires more scrutiny. Then, we have the adaptation reasoning. They need really to make the case that this is an adaptation project, not just development — that what they are presenting for us to fund addresses the effects of climate change, and they need to show trends in climate variability that have created the situation they need to adapt to. So they need to be really engaged with the scientific literature that’s showing climate change impacts in their location? I think the people know that the climate a few years ago was such and now is different. We have more rain, or we have drought, which before we didn’t have. It doesn’t need to be highly scientific, but it needs to show trends backed with some data … We are not prescriptive in the way they need to demonstrate it, but they need to demonstrate that that has been a change in climate. And that the project that they’re proposing specifically addresses or relates to that change? Exactly. What can we expect the Adaptation Fund to look like in the future? The Adaptation Fund at the moment is facing a difficult situation in terms of financial sustainability. These events are important because they allow us to showcase our experience and show the value added that the Adaptation Fund can have to the other bigger funds that are out there. We expect that this will be acknowledged by the participants in this conference, that the role of adaptation and the importance to address adaptation will also be acknowledged in the agreement, and that we will be able to receive more resources that allow us to continue meeting our goals and mission. Have you seen any indication so far that the negotiations are moving toward financing the Adaptation Fund? We have some signals from some donors — Sweden has already announced its contribution. Some want to announce during the high-level segment in the last couple of days of the conference. We expect that we will have some additional funding. We have a modest fundraising target for these two years — 2014 and 2015 — of $160 million, and we have a shortfall about $80 million. Our expectation is to meet our funding target at least, because if we continue to receive such a big amount of proposals, we may run out of funds at the end of next year. 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