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How's the Adaptation Fund doing?
The OG of adaptation finance should be riding the surge in awareness of climate risk and resilience, but attracting attention in an increasingly crowded climate finance space is tough
Louie Woodall
February 01, 2024
AI-generated via DALL-E
TL;DR
The Adaptation Fund (AF), one of the original financing mechanisms for climate adaptation in the developing world, is a critical capital provider to small-scale projects in climate-vulnerable countries.
However, the fund has struggled to hit fundraising goals, and was overshadowed at COP 28 by the new loss and damage fund.
Replenishing its coffers to meet growing adaptation needs is a challenge, since following the collapse of the Clean Development Mechanism, it needs to compete with other entities for donations from both private and public sectors.
Efforts to diversify the AF's funding and projects are underway, though much depends on its ability to attract and hold onto the attention of donors.
Climate activist icon Greta Thunberg is unsurpassed at drawing attention to our planetary crisis. Her actions and accolades are legion, but what’s truly remarkable is how she uses her profile to build up other individuals and organizations in the climate fight. In 2019, she made waves by donating a €25,000 civic award to three environmental organizations and one essential, but often overlooked, climate finance entity — the Adaptation Fund.
The Adaptation Fund (AF for short) was established at the 2001 UN Climate Change Conference in Morocco (COP 7). It has a simple purpose: to finance projects and programs that help communities adapt to climate risks. It’s governed by the Adaptation Fund Board (AFB), which draws over two-thirds of its membership from developing countries, and is focused exclusively on financing projects in these nations. Most of its funding projects are small in scale. Since its establishment to June 2023, the AF has bankrolled 156 adaptation projects to the tune of US$665mn — an average ticket size of US$4mn.
In light of worsening climate risks, you might think the AF would be the locus of climate finance interest at COP 28. But it was largely overshadowed by the new kid on the block: the fund to address loss and damage. Data gathered by the National Resources Defense Council (NRDC) shows that the loss and damage fund attracted US$662mn of contributions during and immediately after the Dubai summit, whereas the AF garnered US$192mn — far short of its US$300mn “resource mobilization goal” for 2023.
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