How could Loss and Damage and adaptation financing issues be integrated into the global goal on adaptation?

Advice:

1. General overview of the global goal on adaptation (GGA) and its relation to the upcoming global stocktake (GST)

The GGA was established under Article 7.1 of the Paris Agreement to:

• Enhance adaptive capacity;
• Strengthen resilience; and
• Reduce vulnerability to climate change.

The aim of the GGA is to contribute to sustainable development and ensure an adequate adaptation response in the context of the temperature goal referred to in Article 2 of the Paris Agreement. The GGA, therefore, is directly tied to a key driver of the architecture of the Paris Agreement. Reviewing overall progress made in achieving the GGA is a mandated outcome of the GST referred to in Article 14.[1]

Nevertheless, it is unclear whether the GGA should be a quantifiable collective target for adaptation, in the same way as the 1.5C temperature goal; and there are differing views on what might constitute progress in achieving the GGA, including what kinds of national-level targets could be used to measure such progress. Indeed, small island developing States (SIDS) have expressed concerns about complying with an international standard that not only may not adequately incorporate the specific needs and special circumstances of SIDS but might then be used to compare the progress of SIDS in achieving the GGA against those of other Parties with larger economies and greater capacities.

Within this context, it is important to note that the technical phase of the first GST is scheduled to commence in early 2022, and given the mandatory nature of measuring progress toward achieving the GGA, Parties will shortly be put in the position of taking what was a political agreement in Paris and understanding the technical implications of this political agreement in order to make a fair assessment of progress under the GST, the outcome of which will ultimately be decided at the political level.

2. The Adaptation Committee’s technical paper on the GGA

In 2019, the CMA requested the Adaptation Committee (AC) “to consider approaches to reviewing the overall progress made in achieving the global goal on adaptation and to reflect the outcome of this consideration in its 2021 annual report.”[2] To support this request, the AC, published a paper in April 2021 which captures information and methodologies for assessing progress in enhancing adaptive capacity, strengthening resilience and reducing vulnerability to climate change. In so doing, the expectation of the AC in preparing this paper is that it will help to inform the discussion amongst Parties and other stakeholders on approaches to assessing the GGA.

Among other things, the technical paper finds that assessing adaptation progress is critical for understanding whether and how vulnerability is changing over time and across scales and dimensions, and how adaptation interventions (or a lack thereof) are influencing these changes. This will not only help decision-makers develop their plans and priorities, but it may also result in corollary benefits, such as raising the profile of adaptation nationally, improving estimates of the costs of adaptation, and helping to better target adaptation finance to where it is most needed. Nevertheless, while the value of assessing adaptation progress is clearly drawn in the technical paper, it also recognizes the challenges in finding an appropriate, acceptable, and / or feasible method for undertaking an assessment that addresses the concerns of all Parties.

3. Considering possible differences between finance for adaptation and loss and damage

Adaptation and loss and damage are treated separately under the Paris Agreement, a treatment that was hard fought for by developing country Parties, including SIDS. A key rationale behind the call for this separate treatment can be found in the preamble to decision 2/CP.19, the decision that established the Warsaw International Mechanism (WIM) for loss and damage. The language of the preamble reads as follows:

“Also acknowledging that loss and damage associated with the adverse effects of climate change includes, and in some cases involves more than, that which can be reduced by adaptation,” [emphasis added]

Recognising the notion that there may be limits[3] to adaptation, which could lead to permanent and irreversible loss and damage, many developing country Parties have called for finance for loss and damage to be separate from and additional to that for adaptation. In keeping with this position, the outcome of the 2019 review of the WIM recognises the urgency of enhancing the mobilization of finance for loss and damage in particularly vulnerable developing countries[4] and urges the scaling up of this finance.[5] In addition, the WIM’s Executive Committee (ExCom) was requested to collaborate with the Green Climate Fund (GCF) to clarify how developing country Parties might access funding for addressing loss and damage,[6] as well as to establish an expert group on action and support, including finance.[7] Therefore, at least from a notional perspective, looking to integrate finance for loss and damage under the rubric of the GGA might appear misplaced.

From a practical perspective, however, we must acknowledge that outside of Article 8 of the Paris Agreement: where Parties recognize the importance of averting, minimizing and address loss and damage, there is no mention anywhere else in the Agreement of loss and damage, much less financing for it. And, regardless of the positive outcomes on finance for loss and damage in the 2019 review of the WIM, corresponding decisions taken during the 2019 Madrid climate conference make it very clear that funding available under the financial mechanism is to come from existing funding windows and structures, which under both the GCF and the Global Environment Facility (GEF) are limited to climate change mitigation- and adaptation-related activities.

Recent reports of the GCF to the Conference of the Parties (COP) do highlight loss and damage-related finance that has been provided, primarily under the adaptation funding window. These include projects that include funding for early warning systems, weather insurance and resilient infrastructure. Recent SIDS-related projects with loss and damage elements include:

• Enhancing Climate Information and Knowledge Services for resilience in 5 island countries of the Pacific Ocean;
• Coastal Resilience to Climate Change in Cuba through Ecosystem Based Adaptation – “MI COSTA”;
• Building Regional Resilience through Strengthened Meteorological, Hydrological and Climate Services in the Indian Ocean Commission (IOC) Member Countries; and
• Climate resilient food security for farming households across the Federated States of Micronesia (FSM).[8]

4. Conclusion

To conclude, measuring progress toward achieving the GGA should have the added benefit of highlighting the scale and location of current and future adaptation finance needs. However, there are still different views on the approaches that might be used to measure this progress. Separately, but related, integrating finance for loss and damage under the GGA measurement process has both political and technical implications that must be considered. Many developing country Parties maintain that loss and damage is the phenomenon that occurs when adaptation has reached its limits, a view which has been supported by the latest science. Because of this differentiation between adaptation and loss and damage, the nature of finance for loss and damage resulting from reaching the limits of adaptation will be of a different character and have different access requirements than those for financing for adaptation.

[1] Paris Agreement, Art 7.14.

[2] Decision 1/CMA.2, para 14.

[3] See IPCC AR5 WGII, Chapter 16: Adaptation Opportunities, Constraints and Limits, followed by Special Report on Global Warming 1.5C, Chapter 3: Impact of 1.5C global warming on natural and human ecosystems, and AR6 WGI: The Physical Science Basis.

[4] Decision 2/CMA.2, para 31.

[5] Ibid, para 32.

[6] Ibid, para 39.

[7] Ibid, para 40.

[8] 2021 GCF report to the COP (draft).