Financing for adaptation and Loss and Damage at SB52

Legal assistance paper

All reasonable efforts have been made to ensure the accuracy of this information at the time the advice was produced. However, the materials have been prepared for informational purposes only and may have been superseded by more recent developments. They do not constitute formal legal advice or create a lawyer- client relationship. To the extent permitted any liability is excluded. Those consulting the database may wish to contact LRI for clarifications and an updated analysis.

Print Friendly, PDF & Email

Date produced: 07/06/2021

Can you clarify under what agenda item(s), if any, will finance for adaptation (including National Adaptation Plans financing) and Loss & Damage be discussed at this session.

Summary:

The issue of finance for adaptation or loss and damage are relevant to discussions under a few agenda items at the June 2021 SB session, and as such could be discussed in a number of places. However, some agenda items that would normally have been discussed at this session will instead be discussed at COP26 in order to manage the increased workload and backlog from 2020 and 2021 due to the COVID pandemic.

Advice:

Finance for adaptation and for loss and damage are critical for developing countries to manage and get ahead of adverse impacts from climate change. Although the boundaries and positions on adaptation and loss and damage are blurry, these two issues are still nonetheless distinct both in their treatment under the UNFCCC and in the minds of most Parties. This “distinction”, whether real or perceived, pragmatic or abstract, relates to all aspects of these two issues, including finance.  Therefore, notwithstanding that finance for adaptation and loss and damage is discussed in general terms below, it is important to note that the issue of finance for adaptation and loss and damage are quite distinct and evolving in different ways.

This SB session is quite different from past ones. The SBI Chair scenario note and the SBSTA Chair scenario note indicate the proposed plan of the SB Chairs for this session. Due to time constraints and an increased workload and backlog from 2020 and 2021 due to the COVID pandemic, the SB Chairs have outlined particular issues and agenda items which they propose to be discussed at COP26 rather than at this session. For example, two relevant agenda items, discussions on the report of the Adaptation Committee and discussion on the report of the Executive Committee of the Warsaw International Mechanism for Loss and Damage, will not be discussed at this session but instead deferred to COP26. The SB Chairs also propose that Parties work on the basis of the draft provisional agendas of the SBI and SBSTA without formally adopting the agendas at this session. This approach is meant to avoid spending time on formal agenda adoption and have more time for substantive work. Practically, it can also mean a little more flexibility in how items are discussed. They also propose to capture discussions in informal outputs at the end of the session.

There are weekly schedules which set specific dates and times for discussions on different topics. Here is the weekly schedule for the sessions in week 2: 7 – 13 June. And here is the schedule for the sessions held in week 1: 31 May – 5 June. The weekly schedule for the sessions in week 3 will be published near the end of week 2.

Finance for adaptation and loss and damage could also be discussed in the context of mandated events that will be held during the session, for example the In session workshop on Article 9, paragraph 5 of the Paris Agreement that will be held in week 2 of the session. The Overview Schedule lists the mandated events that will be held during the session. It is in draft and may change.

There is no specific agenda item for finance for adaptation and loss and damage so these issues could be discussed in any of the following agenda items:

SBSTA Item 9 – Sources of input for the Global Stocktake under the Paris Agreement

  • Parties will be discussing how to complement the sources of input for the global stocktake elaborated in Decisions 19/CMA.1.
  • These topics include themes such as:the state of adaptation efforts, support, experience and priorities; the finance flows and means of implementation and support and mobilization and provision of support; efforts to enhance understanding, action and support, on a cooperative and facilitative basis, related to averting, minimizing and addressing loss and damage associated with the adverse effects of climate change; and barriers and challenges, including finance, technology and capacity-building gaps, faced by developing countries.
  • There is an opportunity for developing countries to raise and discuss sources of input that highlight the financial priorities, needs and gaps related to adaptation action and addressing loss and damage. See an IIED briefing on Loss and damage in the Global stocktake for a high-level view of the ways loss and damage (and finance for it) are relevant to discussions under the global stocktake.

SBSTA Item 15 – Matters related to Article 6, Paris Agreement

  • The issue of financing for adaptation through a share of proceeds from the new mechanism to the Adaptation Fund was specifically discussed at an informal technical expert dialogue convened on 19 April 2021. SBSTA chair summary note of this meeting is available here.
  • Although the issue is unlikely to be given much prominence at this session it will still be open to parties to highlight the role of adaptation as an enabler of ambition (and specifically the importance of the scaling and predictability of finance for adaptation).
  • There is an opportunity to raise this issue under ‘Any other matters identified by Parties’ in the planning of discussions under this agenda but it is unlikely to feature much given the severe time constraints at this session.

SBI Item 4 – Reporting from Parties not included in Annex I of the Convention financial; sub-item 4(c) Provision of financial and technical support

  • This agenda item addresses financial and technical support provided to developing countries to assist them with their reporting obligations under the Convention and the Paris Agreement. The sub-item covers funding from the Global Environment Facility (GEF) for the preparation of national communications (NCs) and BURs, as well as biennial transparency reports (BTRs); and the Capacity-building Initiative for Transparency, amongst others.
  • Under the Enhanced Transparency Framework (ETF), parties are encouraged to report information on climate change impacts and adaptation and on support needed and received, including towards implementing adaptation plans. Further, pursuant to the MPGs (Decision 18/CMA.1), the information to be reported under adaptation includes a sub-section on information related to averting, minimizing and addressing loss and damage.
  • So there is scope for considering, under this sub-item, the reporting on adaptation actions (and on L&D associated with climate impacts) and on financial support needed and received for these actions and plans.

Item 12 – NAPs

  • Access to funding for formulating and implementing NAPs is likely to be one of the key issues to be considered based on the reports referred to in the SBI chair’s scenario note – please see our separate advice on this.

Item 14 – Matters relating to the Adaptation Fund – sub-item 4(b) 4th Review of the Adaptation Fund

  • CMP 13 requested the SBI to initiate the fourth review of the Adaptation Fund (AF), in accordance with the terms of reference contained in the annex to decision 1/CMP.12, or as amended, and to report back to the governing body to be convened in conjunction with COP 26 (November 2021).
  • Based on this mandate, consultations were convened in April 2021 which focused on following areas of discussion:
    • General expectations, including views on the overall approach and possible outcomes of the fourth review;
    • Possible terms of reference, building on the agreed terms of reference from the third review, or as amended;
    • Possible timing for the review, including when to agree/decide upon terms of reference, possible requests for submissions as well as a technical paper.
    • Any other matters related to the review.
  • Following these consultations, the Chair invited parties to make submissions on the terms of reference of 4th review of the AF, based on terms of reference from the previous review.
  • In advance of this session, the SBI chair prepared a note to facilitate parties’ discussions.
  • Although technically limited in scope to the terms of reference (ToRs) of the 4th Review, this sub-item may provide some opportunity to open up discussions around reviewing AF’s resources, scaling up these resources in line with adaptation needs of developing countries, ensuring equal treatment between mitigation and adaptation, and ensuring that the operationalization of the AF is in line with the PA and its goals, including adaptation goal under Art.2.1(b).
  • The first consultations on this item took place on June 3rd; the next ones are scheduled for June 8th.