Making Adaptation Finance Work
One of the intractable challenges in climate adaptation is getting funding where it’s needed most.
Unfortunately, the people most at risk from climate change are also some of the hardest to reach with support.
Recently, WRI hosted a roundtable on Adaptation Finance in Washington, D.C., bringing together experts in development and climate finance to discuss this challenge: Countries and donors are mobilizing hundreds of millions of dollars to help people adapt to a changing climate. How do they get it to the local communities that need it most?
Adaptation Finance Accountability Initiative
The Roundtable on Adaptation Finance was organized as part of the Adaptation Finance Accountability Initiative (AFAI).
This initiative brings together Oxfam, the Overseas Development Institute, the World Resources Institute, Clean Energy Nepal, the Institute for Climate Change and Sustainable Cities in the Philippines, Climate Action Network Uganda, and the Zambia Climate Change Network in a partnership to enhance transparency and accountability of adaptation finance.
The participants, representing NGOs, think tanks, multi-lateral development banks, and representatives from U.S. ministries that provide development assistance, among others, all faced this targeting problem in their work on adaptation. They provided examples of barriers, as well as some of the emerging best practices.
2 Main Challenges in Getting Finance to Local Communities
Channeling and targeting funding effectively is a major challenge to reaching people who are most vulnerable to climate change. In most countries, the web of financial flows from national to local communities is complex; funding has to trickle down through many layers of government before it reaches its intended target. Local governments may only receive a small annual allocation; often not enough to actually implement adaptation projects. That’s why countries need to build partnerships and systems to properly channel and organize climate adaptation funding.
Civil society organizations and legislative bodies can help hold donors and national governments accountable for the use and flow of adaptation finance. However, they are often hindered by the sheer difficulty of identifying and tracking these kinds of funds.
In many countries, there isn't a lot of clarity about the amount of climate finance coming into the country, and even less clarity about what portion of that finance flows to sub-national levels. Also, at the community level, it is often difficult or counterproductive to distinguish between finance that is meant for adaptation and finance that is meant for development. It’s important, then, for development partners and international funds to educate civil society organizations, government officials, and local communities directly about adaptation and adaptation finance, so that they can provide more effective oversight.
Communities and civil society organizations can play an important role in enhancing effectiveness of government and donor spending. One roundtable participant raised the example of the Pilot Program for Climate Resilience (PPCR) in Zambia. The program, meant to help farmers and rural communities build resilience, was designed with extensive involvement of communities and civil society organizations. The project now takes a climate-compatible development approach, integrating development and adaptation planning with an important role for civil society in monitoring its implementation.
For their part, donors and international climate funds can help foster joint programming and better coordination between ministries and other organizations in countries. At the same time, trade-offs exist between good coordination and early implementation of activities. One lesson we have learned is that adaptation projects usually take much longer to design than development projects, mostly because of the additional coordination required. In most cases, this time commitment is justified, as it builds capacity for organizations to work together and leads to better implementation later on.
Key Lessons: Breaking Silos and Building Accountability
Governments and donors need to incentivize collaboration and coordination within countries. International funds such as the Green Climate Fund need to build in incentives to work in this way with countries. Climate change is a cross-cutting issue, so breaking silos is important, and stakeholders must facilitate collaboration and not compete for resources. In Samoa’s PPCR project, for example, the Samoan Ministry of Finance acted as a catalyst to coordinate joint programming between the Asian Development Bank, World Bank, AusAid, UNDP, and the Ministry of Natural Resources and Environment.
It is important to build civil society’s capacity to actively engage in these issues over the long term, in order to create greater domestic accountability. Capacity building can come through donors’ support, or through networks of civil society organizations. For instance, in the Philippines, the Institute for Climate and Sustainable Cities used the data gathered by the Adaptation Finance Accountability Initiative to lobby the government for greater transparency in adaptation spending.
Going forward, international climate funds and donors providing finance for adaptation need to take into account the complexity of reaching local actors. Understanding the local context, working with local and national government agencies and ministries, and coordinating amongst different actors takes time, but it leads to better implementation.