10 November 2014: The UNFCCC Secretariat has published submissions from Bolivia, on behalf of the Group of 77 and China (G-77/China), and Sudan, on behalf of the African Group, containing their views on the second review of the Adaptation Fund, in advance of the 41st session of the Subsidiary Body for Implementation (SBI) to be held in Lima, Peru, in December 2014.

The G-77/China proposal addresses: the provision of sustainable, predictable and adequate financial resources, including the potential diversification of revenue streams; lessons learned from the application of the Adaptation Fund’s access modalities; linkages between the Adaptation Fund and other institutions; and institutional arrangements for the Adaptation Fund. The proposal suggests considering: a regular replenishment process; an ongoing fundraising strategy; and a mechanism to review the status of projects in the pipeline against the availability of financing.

The G-77/China submission supports exploring additional funding sources and alternative means of diversifying its sources as a matter of priority, as well as generating resources from the carbon markets. The Group also recommends that the Adaptation Fund Board consider applying for accreditation to the Green Climate Fund (GCF) in order to channel adaptation financing to developing countries in the medium to long term.

On implementation of projects and programmes, the proposal calls for considering: geographical and regional coverage of projects; social and environmental standards; a pipeline of priority projects in vulnerable sectors; and a targeted financing window for small-size projects and programmes.

Regarding institutional arrangements, the proposal notes permanent institutional arrangements should be determined based on an open and competitive bidding process. Some G-77/China members support placing the Adaptation Fund under the Convention and/or designating it as an operating entity of the Convention’s financial mechanism. Some also suggest considering extending the interim institutional arrangements of the secretariat and trustee until the third review of the Adaptation Fund.

Echoing much of the content of the G-77/China’s proposal, the African Group submission details expected outcomes of the second review, and stresses predictability as well as diversification of revenues. It recommends considering, inter alia: allocation of 10% of carry over units for the Adaptation Fund; measures to stabilize the price of certified emission reductions (CERs); and voluntary levies applied to national and regional emission trading schemes.

The African Group suggests a number of elements to ensure complementarity and coherence among adaptation finance windows, including: a new sub-window for institutional strengthening and capacity development of national implementing entities; placing the Adaptation Fund under the Convention; and making the Fund a specialized institution. The African Group proposal opposes “folding” any existing Funds under the GCF, and emphasizes that neither the Adaptation Fund nor the GCF alone can meet the adaption needs of developing countries. It also notes that, given the uncertain future of the Kyoto Protocol and the Clean Development Mechanism (CDM), care must be taken to ensure that the Adaptation Fund and all the efforts taken in establishing the current institutional and governance structure are not lost. [Views on the Second Review of the Adaptation Fund]