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Wednesday, January 28, 2009

Adaptation Finance

The Institute for Development Studies has released a brief entitled Principles for Delivering Adaptation Finance. The brief outlines four core principles for financing adaptation in developing nations:

    1. Country ownership: eligible states should be allowed to set their own adaptation priorities through dialogue with other in-country stakeholders, supported by finance delivery mechanisms that promote programmatic approaches to adaptation. However, in recognising the considerable differences between states, delivery mechanisms will need to be flexible and tailored to specific needs and contexts. For example, Annex I countries suggest that some states will require capacity building on managing fiduciary risk to improve accountability and transparency before programme-based approaches to adaptation can be supported. Other countries will require assistance to scale up adaptation efforts and to create effective institutions and planning approaches for adaptation. In some cases, project-based funding will be needed to catalyse, develop capacity, mobilise and test scaling-up possibilities.
    2. Prioritising the most vulnerable: with climate change being cast as a social justice issue by many, adaptation delivery mechanisms must channel resources effectively to those most in need as a priority. Integration of adaptation into Poverty Reduction Strategy Papers and national adaptive social protection mechanisms are options where pro-poor state-led processes are potentially effective in reaching the most vulnerable groups. In cases where states are unable to provide adaptation goods and services to those people, alternative delivery mechanisms – such as through CSOs or regional institutions – may be necessary. In many cases, a blend of delivery channels is likely to be most effective at reaching all groups. Care must be taken to protect the ‘country ownership’ principle wherever possible.
    3. Mutual accountability: the governance of international adaptation delivery mechanisms must be transparent, equitable in representation and power, and possess clear lines of accountability. At country-level, adaptation M&E structures should also be: transparent, locally owned, formulated in partnership with other stakeholders and subject to clear accountability measures.
    4. Harmonisation: delivery mechanisms at a country level must not become
      unnecessarily fragmented and must not duplicate functions. Measures to counter fragmentation at this level may include multi-donor trust funds, an approach recently adopted by Bangladesh to ‘harmonise support for its national climate change strategy’. Once eligibility criteria are set, eligible states and those prioritised within states, should be able to directly access financial and technical resources, with minimal transaction costs.

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