The Adaptation Fund could cough up only “around one-sixth” of its targeted commitments from the 29th Conference of Parties, its head confirmed in an exclusive interview to this correspondent on November 16, 2024.
Mikko Ollikainen admitted that the UN Glasgow decision of doubling adaptation finance by 2025, compared to 2019, is likely to missed and push back by around five years.
This is bad news for developing countries, who need adaptation finance in the trillions, forget about millions, to implement their ‘nationally determined contributions’ (NDCs) as finalised in the Paris Agreement or thereafter.
Several reports released during the ongoing COP, including official UN reports, have underlined the importance of augmenting adaptation finance.
The Adaptation Fund is the global body that finances projects for vulnerable communities in developing countries adapt to climate change.
“So far we have received commitment in tune of US$61 million during this COP, about one-sixth of our target of US$300 million, and we expect that more countries will come up with fund commitments next week,” Ollikainen, head of the Adaptation Fund, told this correspondent on the sidelines of the COP negotiation.
10% target achieved
The official focused on the bigger picture and admitted that it has been really challenging to generate funds for adaptation across the world.
“According to estimates, the actual need for adaptation is in the range of US$200-$400 billion, and we so far, could only receive 10 per cent of the target,” admitted Ollikainen.
“We are facing serious challenges (in generating adaptation finances); doing whatever we can from several sources but still falling far short,” he added.
Last year, Ollikainen had termed the dynamics of adaptation funding to be “discouraging and worrying”. Clearly, the situation has hardly improved over the year.
The Adaptation Fund Board estimates that even US$300 million is on the lower side and a “compromise”, considering the needs of vulnerable populations and expected contributions from donor countries.
The Adaptation Gap Report 2024 of United Nations Environment Programme pointed out that the adaptation finance gap stands between “US$187-359 billion per year”.
The Adaptation Gap Report 2024: Come hell and high water, released in early November, found that nations must dramatically increase climate adaptation efforts, starting with a commitment to act on finance. Clearly though, the call has few takers from developed countries.
Glasgow climate pact likely to be pushed back
Ollikainen also opined that the Glasgow Climate Pact target is all set to be missed. The Pact mandated developed countries to double the Adaptation Fund finance flowing to developing and less developed countries in 2025, from the benchmark of 2019. In 2019, the adaptation fund value was US$19 billion, and hence the target for 2025 is US$38 billion.
“Yes. Though the target has not been modified, it is likely to be missed considering the slowness of the fund flow,” admitted the official when this correspondent specifically asked about the chance of the target to be achieved.
Though Ollikainen did not mention any target year, he accepted that “2030 probably” may be the new target year.
The Adaptation Fund report says that though the international public adaptation finance flows to developing countries increased from US$22 billion in 2021 to US$28 billion in 2022, it is still way short of the US$38 billion target to be achieved within a year.
Market mantra the spoiler
“That we only have $61 million instead of the $300 target for the Adaptation Fund is a joke and a cruel one. Developed nations’ tendency to forget their commitments has increased mistrust among developing nations, casting a shadow over the Baku COP29 climate talks on the new climate finance goal,” pointed out Sanjay Vashist, director of the civil society platform Climate Action Network South Asia in Baku.
Incidentally, a set of eminent personalities including former secretary general Ban Ki Moon have recently written to executive secretary of the United Nations Framework Convention on Climate Change, Simon Steill. They have urged reforms in the present UN structure to counter climate change, effectively hinting that all is not well in the present structure.
Nilanjan Ghosh, an economist specialising on ecological issues, pointed out that the market mantra of profiteering, as expressed by return of investment (ROI), is the biggest obstacle for adaptation finance as the long gestation periods and imperceptible short-term economic returns do not make adaptation financing seem worthwhile for business-as-usual investors.
“We need to remember that the adaptation financing needs are more for the Global South. Impacts of green transition will take time, and for most countries, net zero target years are 25-45 years away from today. But by that time, the low-lying areas will be under the sea, agriculture will be destroyed, urban settlements obliterated, and water crisis and food riots will be the order of the day,” said Ghosh, director of thinktank Observer Research Foundation (ORF), Kolkata.
“Communities need to adapt to survive, and that will not happen with the existing annual financing chasm; this gap needs to be bridged by all means,” he added.
