Part of money may be getting siphoned off to loss and damage fund facility, Mikko Ollikainen hints to DTE
Mikko Ollikainen. Photo: @OllikainenAF / X The Adaptation Fund, the global body that finances projects for vulnerable communities in developing countries adapt to climate change, has only received around half of the fund at the ongoing COP28 compared to what they minimally require. Even more damagingly, some countries could be siphoning adaptation funds to the newly operationalised loss and damage finance facility.
These explosive claims have been made by Mikko Ollikainen, the head of the Adaptation Fund, to this reporter at the end of the first week of negotiations at COP28 in Dubai.
Ollikainen termed the development as “discouraging and worrying”.
Earlier, during informal consultations, developing countries expressed disappointment that the United Nations Framework Convention on Climate Change’s Standing Committee on Finance had failed to arrive at a baseline for the doubling of adaptation finance.
This was a mandate carried forward from COP26 at Glasgow in which developed countries were “urged to at least double their collective provision of climate finance for adaptation to developing country Parties from 2019 levels by 2025…”.
“In March, the Adaptation Fund Board has calculated that at least $300 million is required, and expected that fund to be raised at COP28. But so far, only around $165 million has been promised. It is disappointing and worrying and we hope next week will be better,” said Ollikainen in an exclusive chat with this reporter on December 6 afternoon on the sidelines of the COP28 proceedings.
The official accepted that the Adaptation Fund Board estimate — $300 million — was on the lower side and a “compromise”, considering the needs of vulnerable populations and expected contributions from donor countries.
Incidentally, the recently published Adaptation Gap Report of United Nations Environment Programme pointed out that the adaptation finance gap now stands at between $194 billion and $366 billion per year. It needs 10-18 times more money, compared to current international public adaptation finance flows, the document added.
Ollikainen did not disagree when this reporter mentioned that some developing countries and civil society representatives have alleged that part of adaptation finance is being siphoned to the newly operationalised loss and damage finance facility.
“I too am hearing this from some of the contributor countries, though I cannot name them. It seems that there is political momentum in favour of it (loss and damage fund),” he pointed out.
The official added that finalising benchmarks of the Global Goal of Adaptation would make it easier to map needs and get financial support.
The Paris Agreement in 2015 introduced the concept of a Global Goal on Adaptation (GGA), a parallel to the global mitigation goal aimed at limiting global temperature rise to 1.5 degrees Celsius (°C).
An amount close to $600 million has been committed to the Loss and Damage fund during the first week of COP28, after it got operationalised on the first day of the summit. On the other hand, there has not been much headway in the GGA so far.
“That is excellent news. But we have to keep in mind that adaptation and loss and damage are two faces of the same coin and if adaptation fails, the loss and damage will get worse,” said Ollikainen.
He reminded that officials from the Adaptation Board participated in the Loss and Damage transitional committee meetings to strengthen the linkage between the two.
“We will be happy to extend whatever help they require,” the official added. The World Bank has been entrusted with the responsibility of coordinating loss and damage funds in the first four years.
Some developing countries protested at the informal consultations this past week that doubling of finances had not been ascertained so far. Many stated that even that is not enough, quoting the Adaptation Gap Report.
The Africa Group suggested that the doubling of the finance target should be further doubled. Brazil, on behalf of ‘G 77 and China’ group, expressed its concern about the lack of balance between mitigation and adaptation finance and referred to the adaptation gap report’s numbers as “alarming”. Developing countries also pointed out that the private sector cannot be relied upon for fund support.
Developed countries, in general, opposed the proposal though the European Union (EU) admitted that multilateral development banks had failed to mobilise expected finance for adaptation.
Saber Hossain Chowdhury, Bangladesh’s climate envoy, told this reporter that “fund support is inadequate in all sectors including in adaptation”. Bangladesh is known for its adaptation process.
“The fund calculation needs to be benchmarked with the temperature rise. All these calculations have been made considering a temperature rise of 1.5°C or less, compared to the pre-industrial period. But clearly, that limit will be breached and now, there are talks about 2.5 to 3°C rise. In that case, far more money will be required in climate finance,” added Chowdhury.
He reminded that while IPCC reports have called for nearly a 43 per cent cut in global emissions by 2030 to keep the world on track to limit the temperature rise around 1.5°C rise, all the submitted NDCs, cumulatively, can only cut emissions to around 5 per cent.
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