Funding local adaptation – Quantity and Quality Matter

By Dr. Hannah Reid

Financing for local climate change adaptation initiatives comes from a number of sources: international and bilateral funds specifically targeting climate change, existing local, regional and national level budgetary support from governments, NGOs and INGOs working on climate change, private sector investments, philanthropic contributions, and increasingly, communities themselves who are providing finance and other in-kind contributions to improve local resilience in the face of growing climate-related challenges. There is, however, no global system for tracking and measuring the total amount of global finance made available for adaptation from all these sources. Work on the monitoring and evaluation (M&E) of adaptation and adaptation finance is a fast-evolving area, and tools and data sets are being developed, but most tracking does not look at where finance goes beyond the national level.

Local level funding is insufficient

At the 8th International Conference on Community-based Adaptation (CBA8) held in Kathmandu, Nepal in April 2014, the Executive Secretary of the UNFCCC, Christiana Figueres, noted that local-level adaptation funding was “pathetically insufficient” and highlighted the urgency with which funds should be delivered to the local level.

Formulated by participants attending CBA8, the Kathmandu Declaration on Financing Local Adaptation to Climate Change asserts that funding for adaptation should be increased and that “at least 50 per cent of all financing for adaptation should be allocated to local level actions and local communities.” The Nepalese National Adaptation Plan of Action has set a particularly strong precedent here by stating that 80 per cent of available money for adaptation must be spent locally.

We do not know how much climate change finance is reaching local levels, but my suspicion is that only a fraction of current funding allocated for adaptation currently filters down to the communities that need it most. Much adaptation finance is channeled through multilateral agencies and also national governments, neither of which have a particularly strong record of reaching the most vulnerable. The World Bank has come under particular fire from civil society networks in a number of countries for its management of climate change finance, including its high administrative charges.

Think quality as well as quantity: does it support ecosystems and ecosystem service provision?

It is not only the quantity of funding reaching the local level that we need to understand better and improve on. The quality of how this funding is delivered is important too. We need to know whether the support provided targets and meets the needs of the most vulnerable, genuinely involves them in decision making and is effective in terms of helping them adapt to climate change. Does it acknowledge that poor people are disproportionately reliant on natural resources such as timber, fish, grazing and wild medicines for their subsistence, well-being and livelihoods and that ecosystem-based approaches to adaptation (EbA) that use biodiversity and ecosystem services can help people adapt? Does it account for and value the multitude of social, economic and environmental co-benefits such approaches offer? Standard economic assessments rarely capture these benefits, so qualitative measures of how climate finance is delivered are also needed.

The Kathmandu Declaration reiterates the importance of ecosystems and ecosystem services for local adaptation. It states that “Finance should be focused on building natural capital” and account for ecosystem services without compromising environmental integrity. It also asks for international finance bodies such as the Green Climate Fund to ensure allocations for adaptation are in line with existing conservation planning and implementation activities.

How do we pay for local ecosystem-based approaches to adaptation?

So how, in practice, can we pay for EbA at the local level? Speakers in the CBA8 session on ‘Accounting for Natural Capital in CBA’ provided some ideas relating to financial instruments with some potential here.

Payments for ecosystem services were shown to be one way to meet climate change mitigation, adaptation and development needs, and Monica Pearce from RARE described how reciprocal agreements in Bolivia and Ecuador led, financed and implemented by communities themselves could potentially support EbA. Under these schemes, downstream water-using communities make payments to upstream landowners and managers (farmers and ranchers) in order to support sustainable upstream land and water management and to make related land uses more competitive against other potential land uses such as clear cutting for agriculture.

Community-based natural resource management initiatives have lessons for EbA relating to the institutional and governance aspects of securing finance from sustainable natural resource management and distributing this to local communities. Revolving funds, for example for community forest management, also have valuable lessons.

How do we secure action at scale?

Another key emerging issue is how to move from standalone projects to implementing actions at scale. The main way to do this is through mainstreaming into existing national development and climate change planning.

Dharam Uprety provided an example of how this could be achieved, describing how the Multi Stakeholder Forestry Programme (MSFP) in Nepal has been able to operate at scale and reach thousands of people by mainstreaming activities into state and non-state planning processes. MSFP works with more than 10,000 local forestry groups and successes centered on integrating CBA at different scales into the Local Adaptation Programme of Action planning process.

The challenge

Accessing finance remains a key challenge for EbA. Current successes have only really been achieved where there has been a market for ecosystem services such as timber and fish. Most ecosystem services, however, remain undervalued and no formal market for them exists. Most international and national systems for financing EbA are also either absent or in their infancy. Ecosystems provide a wide range of services that can help vulnerable people adapt to climate change, and they play an important role in climate change mitigation too. Therefore, it is important that emerging mechanisms for delivering finance for local adaptation both increase the quantity of support reaching the local level, and also the quality of this support. This requires us to get better at finding ways to value the multitude of benefits EbA can provide and deliver finance to support these.


References

Smith, B. (2014) Fine Tuning International Adaptation Funding for the Most Vulnerable. IIED Briefing. IIED, London.

Reid, H., Ampomah, G., Olazábal Prera, M. I., Rabbani, G. and S. Zvigadza (2012) Southern voices on climate policy choices: analysis of and lessons learned from civil society advocacy on climate change. IIED, London. Feature Photo © Simon de Trey-White / WWF-UK