State of Finance for Adaptation andUNDP’s Strategy for Supporting

countries in the Arab States

Elie KodsiDrylands Development Centre

UNDP Environment and Energy Group

Damascus, 15-16 September 2010

2

Costs of Mitigation and Adaptation in Developing Countries

US $100 billion

2

per year by 2020

Copenhagen Accord

Source: EACC, WB 2010

Costs of Adaptation (World Bank and UNFCCC, $billions)

33

Source: SEFI, New Energy Finance in Glemarec et al (2010)

Diversity of schemes

Some operate at the international level

Others only available to domestic investors.

Four main categories: (i) public funds providing either grant or loan assistance; (ii) Private funds providing either grant or loan assistance; (iii) market-based instruments; (iv) innovative financing instruments.

4

Global Climate Finance Negotiations

UNFCCC negotiations continue to discuss reform of financial mechanism:

• A possible new fund: Copenhagen Green Climate Fund (CGCF) to manage a “significant portion” of future climate finance in addition to GEF and AF• Creation of a new oversight system (possibly a Finance Board) under the Convention that may be involved in fund allocation and approval (for CGCF, GEF and AF projects)•Use of Low-emission, climate-resilient development strategies as the foundation for accessing and allocating finance•Increased provisions for direct access under all funds

Status of Discussions as of mid-2010:• Negotiations moving slowly--full deal in Cancun ruled out• Still much to be clarified over the CGCF and respective roles of GEF & AF• However, “fast start finance” ($30bn per year 2010-12) is flowing (65% along bilateral lines; some as part of GEF V and AF pledges)

5

Registry/Mitigation

Forestry & REDD

CC Adaptation

Technology

Capacity Buliding

Adaptation Fund

BOARD ?

Financial Mechanism

Matching Coordination Oversight MRV

BILATERAL

Copenhagen Green Climate Fund ? GEF

COP

Countries Receiving Climate Finance

6

GEF and the Kyoto Adaptation Fund

GEF Assistance to Address Adaptation

Least Developed Country Fund(LDCF)(implementation of NAPAs)NO GLOBAL BENEFITS

Special Climate Change Fund(SCCF)Top priority to AdaptationNO GLOBAL BENEFITS

Adaptation Fund (AF)Adaptation in developing country parties to KPNO GLOBAL BENEFITS

GEF Trust Fund

UNFCCC climate change funds

The Adaptation Fund

Secretariat services for the AFB provided by GEF on an interim basis.

GEF Trust FundStrategic Priorityon Adaptation (SPA)adaptation action WITH GLOBAL BENEFITS

7

Modalities for Accessing The Kyoto Adaptation Fund

7

Source: Accessing Resources from the Adaptation Fund, 2010

88

Kyoto/AFCER Sales: $156m

Funding Approvals: $0

(For all Parties to Kyoto – non annex 1 to UNFCCC)

Source of Funding CER Sales

2010-2014 Expectation $317-434m

Governance AF Board (Parties)

GEF/SCCFPledges: $148m

Funding Approvals: $109m

(For all non-annex 1 Parties)

Source of Funding Replenished Voluntarily

Donor Contributions

2010-2014 Expectation$500.

Governance GEF LDCF/SCCF Council

GEF/LDCFPledges: $221m

Funding Approvals: $135m

(Only for LDC)

Source of Funding Replenished Voluntarily

Donor Contributions

2010-2014 Expectation $500m

Governance GEF LDCF/SCCF Council

Status of Funding

99

Current UNDP Support to Countriesin the Arab States

10

UNDP’s Adaptation Portfolio

• Where do we stand in the region?

$13,3 million / $15 million in co-financing

• Addressing priority climate hazards and adaptation needs

11

Sources of LDCF, SCCF and AF Funds Mobilized To-Date – Arab Regions

• Egypt - $4m (SCCF)

• Sudan - $3.3m (LDCF)

• Morocco - $3m (GoJ)

• Tunisia - $3m (GoJ)

• Morocco - $300K (SPA) (part of a global community based

adaptation project)

• Jordan – $750K (SCCF) (part of a UNDP-GEF global cc health

adaptation project executed by WHO)

Others: Number of Enabling Projects (Nat Coms, CB2s etc)

11

12

Funding to be Mobilized (2010 onwards)

SCCF: – Jordan – Treated waste water use $ 3.6 million; – Syria – Innovative finance for adaptation in the Badia steppe - $4.5

million;

LDCF– Requests from Sudan and Yemen

AF– Egypt – mariculture as coastal defense and livelihood diversification -

$5.7 million– Requests from Lebanon, Sudan, Yemen and Djibouti

13

Key Challenges in Attracting Financing

Assuming that international public finance commensurate with the Copenhagen Accord will be mobilized there are 3 key questions:

Finding ways to mobilize a variety of resources at scale How to attract, blend with, and catalyse, larger sources of public and private finance

How to assist countries to move towards low carbon climate resilient growth paths

How to deliver finance in a nationally defined and directed way where it is most neededFind ways to deliver finance at speed to where it is needed most

13

14

Emerging UNDP Support to Countriesin the Arab States to Pursue

Low Emission Climate Resilient Development

14

15

UNDP Approach For Assisting Countries Attract CC Finance

Raising finance and delivering finance go hand-in-hand (i.e cannot be dealt with separately)

A country-driven, multi-stakeholder framework to scale up cc finance to strengthen and advance national development priorities is required.

15

16

A New Development Paradigm:A country-driven, Multi-Stakeholder Climate Finance Framework

This approach allows governments to put development at the heart of climate planning

Public and Private Sources of Funds (National and International Sources)

Low Emissions, Climate Resilient

Development Strategies

Financial and Technical Support

CC Platforms

“NAMAs/NAPS”

Implementation and

Reporting Mechanisms

17

5 key steps to prepare a LCLRD Strategy

Develop Partnership & Coordination

Structure

Prepare Climate Change Scenarios

• Climate scenarios• Vulnerability scenarios• GHG emissions scenarios

Identify Mitigation & Adaptation

Options• Identify priority M&A options through a multi-stakeholder consultative process

Assess Priority Climate Financing Needs

• Assess existing financing options• Undertake cost-benefit analysis of priority options• Identify Financial flow requirements• Identify policy & financing options

Prepare comprehensive Low Carbon &

Climate Change Resilient Roadmap

Enhancing Climate Resilient Development

Drylands Development Centre Arab States Programme

18

The project aims at improving MDG related service delivery through an integrated community development based approach. The key MDG areas that will be addressed by the project target four MDGoals related to poverty reduction, education,health and environment. These specifically include: i) poverty reduction through employment creation; ii) access to and quality of education; iii) integrated health services and IV) access to safe water and improved sanitation.. This approach will be conducted in 24 villages in the eastern region which was hit by a severe drought, the worst of the last fourty years. Six villages namely Khan Toman, Jafer Mansour and Mgheirat Shibli in Aleppo and Bsetien, Mueijil and Kabajeb in Deir Ezzor [1] will be targeted in the 1st phas

[1] Refer to annex 4

19

DDC-supported Intervention in Syria

• The North-eastern Region in Syria lagging behind in terms of the MDGs and faces development challenges: lack of basic services and infrastructure, little investment and limited job opportunities, migration

• It is home to 58.1% of the poor population

• it has 42% of Syria’s cultivated area, is heavily dependent on agriculture and, therefore, is very sensitive to desertification and drought.

• Moreover, the region has been more impoverished in the last few years as a result of severe drought. Two UN joint assessments conducted in 2008 and 2009 concluded that the drought is severe, the worst of the last 40 years and affected about one million people.

19

20

DDC-supported Intervention in Syria

• The North-eastern Region in Syria has a major existing climate adaptation challenge, which climate change is likely to deepen.

(Impact from climate is not a future concern, it is an immediate concern)

• The Region’s adaptation challenge is inextricably linked with its development challenge: if people are well educated, have access to good basic services and have robust/diversified livelihoods they will be much less vulnerable to climate change.

• Adaptation is essentially about development in a hostile climate or climate-resilient development

20

21

DDC-supported Intervention in Syria

• National response: Integrated Community Development for scaling-up the MDGs in the North-eastern Region

• Joint project Ministry of planning and UN agencies (UNDP, ILO, WFP, FAO, UNICEF, UNFPA)

• Key MDGs targeted are related to poverty, education, health and environment.

• DDC support seeks to build community resilience to drought through: 1) developing vocational and business skills among adults and youth for livelihood enhancement/diversification and 2) building the capacity of farmers to adopt appropriate land and water management practices

21

22

Syria - Lesson learned

• A window of opportunity today: a chance to put in place nationally-owned programs that boost sustainable development and in doing so greatly improve the levels of climate adaptation

• The work piloted in Syria can:

1. Serve as a baseline for mobilizing additional funding from international climate finance (this is on-going)

2. Feed into the development of Low Emissions, Climate Resilient Development Strategy (whether at the national or sub-national level)

22

2323

2424

For further information on adaptation funding and programming in the Arab States Region:

Keti Chachibaia, Regional Technical Advisor- Adaptation- Arab States keti.chachibaia@undp.org

Elie Kodsi, Regional Manager for Arab States, UNDP Drylands Development Centre, elie.kodsi@undp.org