The Adaptation Fund was established to finance concrete adaptation projects and programmes in developing country Parties to the Kyoto Protocol that are particularly vulnerable to the adverse effects of climate change.

The Adaptation Fund is financed from the share of proceeds on the clean development mechanism project activities and other sources of funding.  The share of proceeds amounts to 2% of certified emission reductions (CERs) issued for a CDM project activity.

The Adaptation Fund is supervised and managed by the Adaptation Fund Board (AFB).  The AFB is composed of 16 members and 16 alternates and meets at least twice a year ( Membership as of  September 2009 (134 kB) ). 

Upon invitation from Parties, the Global Environment Facility (GEF) provides secretariat services to the AFB and the World Bank serves as trustee of the Adaptation Fund on an interim basis. These interim institutional arrangements will be reviewed in 2011.   

At CMP 4, which was held in Poznań, Poland from 1-12 December 2008, Parties considered the report of the Adaptation Fund Board and adopted a decision ( 1/CMP.4) putting the necessary administrative and legal arrangements in place to allow for the full operationalization of the Adaptation Fund.  In particular, Parties adopted:

• The rules of procedure of the Adaptation Fund Board
• Memorandum of understanding between the CMP and the Council of the GEF to provide secretariat services to the AFB
• Terms and conditions of services to be provided by the World Bank
• Strategic priorities, policies and guidelines of the Adaptation Fund

Thus, Parties paved the way for the monetization of the CERs units that will enable concrete adaptation projects and programmes to be rolled out in 2009.

Parties also considered how to ensure that developing countries can directly access resources under the Adaptation Fund.  They agreed that the AFB be conferred with such legal capacity as necessary for the discharge of its functions with regard to direct access.  Following from that decision, such legal capacity would have to be recognized in some domestic jurisdiction and a Party to the Kyoto Protocol would need to take the necessary legal measures for that to occur.

Updated  5 May 2009