Submission to the report on the doubling of adaptation finance
This is a submission to a call from the Standing Committee on Finance for information and data to inform the preparation of a report on the doubling of adaptation finance. The report was requested as part of the Sharm el-Sheikh Implementation Plan adopted at the UN COP27 climate conference, to inform further deliberations in the lead-up to COP28.
The submission focuses primarily on three aspects contained in the draft outline of the report: (i) methods for measuring adaptation finance outcomes; (ii) effectiveness of adaptation finance; and (iii) key opportunities to at least double adaptation finance.
- The Adaptation Finance Gap cannot be closed without strong and fast reductions in greenhouse gas emissions.
- Tracking finance as an input to the adaptation process is distinct from measuring its results. Accounting of financial flows cannot be taken as a proxy for effective adaptation.
- Results of adaptation, including of actions funded by international climate finance, can be measured at different levels (from the project to the global level). Assessments at each level typically have specific purposes and audiences and use methods that fit these purposes.
- There is no one-size-fits-all approach to measuring adaptation results. The suitability of monitoring and evaluation (M&E) methods and approaches depends on the purpose, intended audience and available resources for M&E.
- Adaptation indicators need to fit to their intended purpose and need to have a clearly defined way of measurement.
- Instead of aiming for a universal set of global portfolio indicators, it is more important to ensure the quality of each adaptation project, especially to specify in detail how activities are expected to help people adapt.
- The proportion of funding of an activity that is reported as adaptation finance should reflect the actual proportion to which the activity’s budget contributes to adaptation.
- Adaptation finance can only be effective if it is genuinely addressing climate risks.
- Donors need to improve the accuracy of their labelling of activities as either “principal” or “significant” under the OECD Rio Marker system to ensure that adaptation finance statistics are valid and reliable.
- Adaptation projects funded under international climate finance need to clearly outline how their activities will help the targeted beneficiaries to better deal with climate risks. A theory of change can facilitate outlining the intended adaptation process.
- To close the adaptation finance gap it is indispensable to establish new funding sources that deliver substantial and predictable funds that are less prone to changes in national administrations.
- Levies on fossil fuel extraction and consumption have the potential to generate additional funding sources for adaptation that exceed current levels of adaptation finance and that are predictable and aligned with the polluter pays principle.
- Repurposing fossil fuel and other harmful subsidies offers an immediate solution and an enormous fiscal potential to doubling adaptation finance based on existing budgetary resources.
- Ensuring that financial flows are consistent with climate-resilient development is an important complement to the provision of support.