Institutional Arrangements for Adaptation Fund: World Bank view
OceansOceans
HealthHealth
AgricultureAgriculture
DisastersDisastersDesertsDesertsBiotic resources
Coastal
Steve GormanGlobal Environment Operations
World Bank
Adaptation Agenda
• Adaptation and Mitigation are strong complements• Climate change impacts on developing countries are expected to
increase regardless of mitigation efforts• Demand for infrastructure and agricultural/water investments that
further need to adapt to climate• Adaptation links global environment issues with local development
paths• Development investment is at risk in the absence of consideration of
climate variability and climate change issues• The Multilateral financial institutions can effectively link the lending
and adaptation agenda to produce synergies• Expected growth of adaptation agenda within UNFCCC • Need to strengthen national and local institutions to promote
adaptation• Need for long-term funding arrangements to support adaptation
agenda
Adaptation and Development as part of World Bank Poverty Agenda
• According to OECD Study, 20% to 50% of ODA is subject to climate risk • Whatever the mitigation efforts, we are already committed to significant
climate change• Current climate variability and climate change are significant threats to
development
-
1,000
2,000
3,000
4,000
1970s 1980s 1990s 2000s
Nu
mb
er
aff
ec
ted
(M
illio
ns
)
Dev'ed
CIT
Dev'ing
LDC
Climate disasters are already a major burden for developing countries
-80
-60
-40
-20
0
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
year
%
-30
-25
-20
-15
-10
-5
0
5
10
15
20
25
rainfall variability
GDP growth
Ag GDP growth
Ethiopia
A water rich developing country, but with GDP tied to annual rainfall variations. Therefore adaptation and growth & development are closely linked
Preliminary results from : A Country Water Resources Assistance Strategy for Ethiopia
Climate Variability is Major Impediment
to Development
World Bank and IADB Portfolio Study:vulnerability to climate change
World Bank IADB
• Average no. of projects each year 440 91
• Average size of annual financing portfolio $ 20 B $ 6.6 B
•• % of projects with moderately sensitive components 40% 27%
• % of projects with highly sensitive components 25% 11%
• Estimated annual expenditure at risk $ 5.3 B $ 1.2 B• (Level 2 & 3 impacts) (21 – 34 %) (8 – 33 %)
World Bank’s Implementation of Adaptation Agenda
• Mainstreaming adaptation initiatives in country assistance strategies • Financing and technical support to adaptation programs outlined in
poverty reduction strategies • Adaptation is a major consideration in development policy lending and
sector wide adjustment programs• Anticipatory adaptation is a major component of World Bank Hazard
Management Program• Bank support to private sector development, microfinance, insurance, and
small and medium enterprises to promote adaptation at local level• Engagement of line ministries at the policy level to promote adaptation
agenda• Analytical activities supporting adaptation in Bank policy and lending
programs
World Bank Experience in Global Funds that Complement Adaptation Fund
• More than 30 years experience in managing trust funds on global programs• Currently manages over 850 trust funds valued at over $9 billion yearly covering all major
sectors with over 25 which Adaptation Fund overlaps
World Bank Lending/Co-financing
TechnicalSupportTo GEF
Co-financing Complements Adaptation Fund
Adaptation Fund
As GEFImplementing
Agency
Emergency Lending
for Hazards
Market Mechanisms-
Carbon Finance/Insurance
Facility
Global programs
& Trust Funds
DevelopmentPolicy
Lending
InvestmentLending
Trustee GEF TF/
SCCF/LCDF
Support toGEF
Secretariat
Proposal on Governance Structure for Adaptation Fund
Country Coordinating Mechanisms for Adaptation Projects and Programs(GEF Focal Points)
National governments
GEF Council
GEF Secretariat
Strategy/Business Plan
Agencies
IAs / EAsUNFCCC Share of Proceeds
TrusteeWorld Bank
Multilateral & Bilateral
Development Organizations
Civil Society - NGOs, CBOs
Private Sector
Evaluation OfficeM&E
GEFGEF$2.8 $2.8 billionbillion
IBRD/IDA IBRD/IDA $4.8 billion$4.8 billion
Other CoOther Co --financingfinancing$13.8 billion$13.8 billion
World Bank Group – GEF Program:Mobilizing Public and Private Fu nds
($21.4 billion) 1993-2005
Costs of Administering Stand Alone Adaptation Fund
Year CERs (Million)
2% of CERs
Size of Fund
@ $ 15/ CER
Admin. Costs of standalone AF
@ 5% of Fund
Current estimate from project pipeline for 2012
340 6.8 $ 102 M $ 5.1 M
Low Expectation for 2012 910 18.0 $270 M $ 13.5 M
Medium Expectation for 2012
1500 30.0 $ 450 M $22.5 M
High Expectation for 2012 2000 40.0 $ 600 M $30.0 M
Source: UNFCCC and WB estimates
Note: Administrative costs of a stand alone AF could be saved by managing AF as part of existing GEF trust fund portfolio
World Bank Contribution to Adaptation Fund
World Bank’sMultiple Roles under Adaptation Fund
Trustee of Adaptation Fund
&(GEF TF,
LCDF, SCCF)
As ImplementingAgency
Coordinating with other IAs & EAs on Adaptation
Projects
Technical Support to
GEF Secretariat
Mainstreaming Adaptation
through PRSPs, CAS
Co-financing to AdaptationProjects and NAPAs
Policy & Market Mechanismsfor Adaptation Investments
Capacity & Knowledge mgt of Adaptation Programs
Support to Private Sectoron Adaptation Agenda
World Bank’s Implementation of GEF Funded Adaptation Projects
• Kiribati Adaptation Program (SPA funded)• Columbia’s Caribbean Insular Human Health (SPA funded)• Pilot Adaptation in Coastal areas of Dominica, St. Lucia • (SPA funded)• Sustainable land management in Zambezi valley (pipeline)
(SPA funded)• Pilot Climate Change Adaptation Measures in Andean
Region (SCCF funded)• Caribbean Mainstreaming Adaptation to Climate Change
(Stage II Adaptation funding)• Caribbean Planning for Adaptation to Global Climate Change
(Stage II Adaptation funding)
Multi-sector Approach - Kiribati Adaptation Project
• Hazard mapping done to avoid infrastructure in flood and landslide prone areas
• Elevation of coastal infrastructure
• Introduction of building codes
• Protection of coral reefs
• Replanting of mangroves
• Improved sanitation
• Management of solid and liquid waste
• Vector control programs for dengue fever
• Monitoring of areas prone to ciguatera outbreaks
Public Health
Coastal Assets
• Regional collaboration in tuna negotiations
• El Nino/La Nina forecasting
• Licensing arrangements to decrease year-to-year fluctuations
Fisheries
• Crop improvement programs to promote improved adaptation of cassava, yam, taro, sugarcane
• Support to agricultural and rural development programs
• Improving climate forecasting mechanisms
Agriculture
Conclusions
• GEF management of AF with other Funds (GEF TF/SCCF/ LCDF) avoids additional costs and time associated with standalone administration of Adaptation Fund
• Experience in managing GEF Trust Funds permits application of same standards/oversight to Adaptation Fund
• Small and uncertain size of Adaptation Fund can be better managed as compliment to the portfolio of GEF Trust funds
• Adaptation fund could benefit from the larger co-financing and global program resources
• Use of existing trustee infrastructure to manage the Adaptation Fund can result in significant cost savings, which could be ploughed back into the fund to support more projects