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Direct access to the Adaptation Fund moving forward

by Sven Harmeling | Thomson Reuters Foundation
Friday, 17 September 2010 12:40 GMT

* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.

2010 may become a historic year in international finance policy, and the Adaptation Fund set up under the Kyoto Protocol may be the most important milestone.

For the first time in the history of climate policy, developing countries can access an international fund directly. What is so new about it?

Usually, developing countries have to submit projects through so-called Multilateral Implementing Entities to obtain resources from an international fund. The role of these entities, which for example are the country offices of the U.N. Development Program (UNDP), U.N. Environmental Program (UNEP) or the World Bank, is to oversee project implementation, in particular with regard to financial terms and fiduciary aspects.

However, many developing countries have complaints over significant delays in implementation and higher costs because of this process.

While the decision to allow direct access in the Adaptation Fund was taken at the U.N. climate conference in Bali in 2007, it has taken some time to develop the approach and the rules. But with the accreditation of the first National Implementing Entity, the Centre de Suivi Ecologique (CSE) from Senegal in March this year, direct access has become a reality under the U.N. Adaptation Fund.

In practice this means that the functions performed by the multilaterals are now performed by domestic institutions, which, of course, have to ensure they meet international fiduciary standards to be accredited by the Adaptation Fund Board.

THREE AGENCIES APPROVED

At its recent meeting, held in September 2010, the Adaptation Fund Board approved two other National Implementing Entities (NIEs), the Planning Institute of Jamaica and Uruguay's Agencia Nacional de Investigacion Innovacion. The count now stands at three, including the Senegalese Centre de Suivi Ecologique (CSE).

However, more than 30 developing countries have expressed interest in going the road of direct access, and the number of accredited NIEs may increase by the end of the year.

Interestingly, this provides a key opportunity for South-South cooperation. Governments interested in gaining direct access to funds can exchange information with the already accredited NIE organizations and learn from them how to complete the accreditation procedure.

This development opens up a new avenue for developing countries to obtain funding for adaptation to climate change, widely seen as an entitlement since most of the most vulnerable countries have contributed almost nothing to creating the problem.

If countries chose to seek funding through direct access, however, they must also be aware of their new responsibilities. The performance of the National Implementing Entities and how successfully direct access works will be keenly watched. Observers will include finance ministries, to see if they can trust domestic institutions to use money appropriately. Climate change negotiators, who want to build future direct access approaches on this experience, will also keep an eye on the effort. And finally many NGOs in the North and South will be watching both because they have supported the development of the Adaptation Fund as a new step in developing country ownership, but also because they will demand that NIEs pay special attention to the most vulnerable communities and hold appropriate, inclusive stakeholder consultations.

Thus, the story of direct access has just begun, and the future will show if it becomes a success story. However, one should not forget than none of the usual implementing entities, such as World Bank, UNDP or bilateral agencies, have a track record of 100 percent successful projects.

Problems that arise in the work of NIEs should be addressed with a view to improving their work, rather than using the failings as an argument against direct access.

Sven Harmeling is a senior advisor on climate and development with Germanwatch, a German development and environment NGO that has closely followed U.N. climate negotiations for 15 years. He focuses on adaptation to climate change under the U.N. Framework Convention on Climate Change, including the process towards a new global climate deal and the development of the Adaptation Fund. For more information on the Adaptation Fund: http://www.germanwatch.org/klima/af.htm Harmeling can be reached at: harmeling@germanwatch.org

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