Financing Adaptation to Climate Change in Developing Countries

Abstract

Adaptation assistance is a key element in promoting adaptation measures in developing countries. However, adaptation finance has not fully met the needs of adaptation in developing countries because of its limited amount and ineffective distribution. This chapter provides implications for designing more effective financing for adaptation under the United Nations Framework Convention on Climate Change, by analyzing the characteristics of two types of existing adaptation financing targeting Asia–Pacific developing countries: (1) multilateral adaptation funds related to the Global Environment Facility (GEF) and (2) bilateral official development assistance. The effects of the two financing schemes are compared, focusing on their financing rules and procedures and their targets and effects. The chapter shows that the adaptation finance schemes have strengths and weaknesses. The GEF-related multilateral adaptation finance has the potential to bring together various donors and organizations in implementing adaptation, while it has complex financing procedures and rules. Bilateral official development assistance is able to provide more adaptation finance, while it is more influenced by donors’ interests. To promote adaptation activities effectively in developing countries, there is a need for an international framework for coordinating adaptation financing that enhances the strengths and minimizes the weaknesses of both financing systems.