The decision to operationalize the Climate Change Adaptation Fund, taken in Bali last year, was of
historic importance. It acknowledged the urgent need to address the vivid adverse impacts of climate
change - already being felt by developing countries, in particular the poorest and most vulnerable
– through predictable and sustainable sources of funding.
The Adaptation Fund under the Kyoto Protocol is unique in the way its revenue is generated, namely
through a two per cent levy on the emission permits known as Certified Emission Reductions (CERs)
that are generated by emission reduction projects under the Kyoto Protocol’s Clean Development
Mechanism (CDM). This unique source of funding makes it predictable and reliable. The Adaptation
Fund’s other two sister funds under the Convention - the Special Climate Change Fund and the
Least Developed Countries Fund, on the other hand, are both reliant upon voluntary contributions from
developed country parties to the Convention. The Adaptation Fund also has the potential to grow
exponentially, depending on the agreed outcome next year in Copenhagen on a strengthened
international climate change agreement.
The Adaptation Fund indeed represents a significant step forward in delivering funding for developing
countries to deal with the impacts of climate change. It also marks the beginning of a true
international commitment to address the adaptation needs of those developing countries that are
suffering most from the impacts of climate change particularly African countries, Least Developed
Countries and Small Island Developing States. Rising sea levels, coastal inundation and
shortages of water and food are putting billions of people in developing countries at risk. These
impacts are set to worsen in the future, making adaptation inevitable.
Within the Adaptation Fund Board, we are taking every effort to accelerate the financing of
adaptation projects in order to strengthen the resilience of the most vulnerable countries. The Board
faces the formidable task of ensuring that this unique Fund lives up to the expectations of
developing countries, and that mechanisms are put in place as soon as possible to allow direct and
quick access to the available resources.
The estimated $400 million USD that the Fund is expected to contain by 2012 may seem trivial compared
to the projected annual costs for adaptation of tens of billions of dollars, as estimated last year
by the UNFCCC secretariat. The Fund is nevertheless an important source for addressing the most
pressing adaptation needs in the most vulnerable poor developing countries.
It is clear that current resources are insufficient to meet the adaptation needs of developing
countries. While adaptation support can, and is being undertaken through other financial channels, to
remain truly committed to the multilateralism envisaged within the UNFCCC in addressing the impacts
of climate change, the Adaptation Fund needs to remain the principal channel for adaptation support
to developing countries. This Fund needs to grow in accordance with the expanding adaptation needs of
developing countries. It is my belief that the international community will help enable this by
agreeing on additional carbon market sources for the Fund as part of a strengthened international
climate change agreement, hopefully by the end of next year.