Institutional Arrangements for Adaptation Fund: World Bank view

1
Institutional Arrangements for Adaptation Fund
World Bank view
Biotic resources
Coastal
Oceans
Steve Gorman Global Environment Operations World
Bank
2
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

3
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

Climate disasters are already a major burden for
developing countries
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Climate Variability is Major Impediment to
Development
Ethiopia
A water rich developing country, but with GDP
tied to annual rainfall variations. Therefore
adaptation and growth development are closely
linked
25
20
15
10
5
0
0

-5
-20
1982
1984
1985
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
1983
1986
-10
-15
-40
rainfall variability
-20
-60
GDP growth
-25
Ag GDP growth
-80
-30
year
Preliminary results from A Country Water
Resources Assistance Strategy for Ethiopia
5
World Bank and IADB Portfolio Studyvulnerability
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 )

6
World Banks 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

7
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

8
Co-financing Complements Adaptation Fund
Trustee GEF TF/ SCCF/LCDF
Investment Lending
As GEF Implementing Agency
Technical Support To GEF
Development Policy Lending
World Bank Lending/ Co-financing
Adaptation Fund
Global programs Trust Funds
Support to GEF Secretariat
Market Mechanisms- Carbon Finance/ Insurance
Facility
Emergency Lending for Hazards
9
Proposal on Governance Structure for Adaptation
Fund
Evaluation Office ME
10
(No Transcript)
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Costs of Administering Stand Alone Adaptation Fund
Year CERs (Million) 2 of CERs Size of Fund _at_ 15/ CER Admin. Costs of standalone AF _at_ 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
12
World Bank Contribution to Adaptation Fund
World Banks Multiple Roles under Adaptation Fund
Co-financing to Adaptation Projects and NAPAs
Trustee of Adaptation Fund (GEF TF, LCDF,
SCCF) ? As Implementing Agency Coordinating
with other IAs EAs on Adaptation
Projects ? Technical Support to GEF
Secretariat
Mainstreaming Adaptation through PRSPs, CAS
Policy Market Mechanisms for Adaptation
Investments
Capacity Knowledge mgt of Adaptation Programs
Support to Private Sector on Adaptation Agenda
13
World Banks Implementation of GEF Funded
Adaptation Projects

• Kiribati Adaptation Program (SPA funded)
• Columbias 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)

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Multi-sector Approach - Kiribati Adaptation
Project

• Improved sanitation
• Management of solid and liquid waste
• Vector control programs for dengue fever
• Monitoring of areas prone to ciguatera outbreaks

• Crop improvement programs to promote improved
  adaptation of cassava, yam, taro, sugarcane
• Support to agricultural and rural development
  programs
• Improving climate forecasting mechanisms

Agriculture
Public Health

• 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

Fisheries

• Regional collaboration in tuna negotiations
• El Nino/La Nina forecasting
• Licensing arrangements to decrease year-to-year
  fluctuations

Coastal Assets
15
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