COP27: All eyes on Egypt to steer climate finance towards adaptation

With the summit happening amid Ukraine war and recession fears, budget cuts for climate are apprehended as nations use money to secure energy and development aid shifts towards humanitarian projects

The upcoming conference of parties (COP27) in Sharm el-Sheikh, Egypt is touted to focus on climate adaptation, rather than mitigation as has been the case in previous COPs. As developing nations, especially from Africa and South Asian, will have a chance to present their demands more strongly than ever, it is widely expected that there would be an enhanced focus on Loss and Damage Funding (LDF) and climate adaptation solutions. 

Mitigation pertains to reduction in carbon emissions while adaptation focuses on safeguarding from climate extremes.

With the summit happening in the backdrop of the Russia-Ukraine war and recession fears across developed economies, there is also apprehension of budget cuts for climate as nations divert money towards their energy security and development aid shifts towards humanitarian projects. 

The Indian government last year joined hands with 24 like-minded developing countries (LMDCs) to push for climate disaster funding from developed nations, on the “polluter pays” principle. This included several island nations, least developed countries which are in the first line of impact from climate extremes.

However, at the end of the COP26 last year, the negotiating text for the outcome offered no further enhancement to the climate financing budget and only “urged” the developed world to meet the $100 billion per year climate fund target set in 2009. It also steered clear of mentioning a separate fund for loss and damage.

With a developing nation hosting the COP this year, it is widely expected, the Global South will push for more funds to go for compensating poor nations facing climate extremes. 

The World Resources Institute (WRI) in a recent report said, finance must scale significantly to support adaptation needs. "Many stakeholders are calling for much greater levels of adaptation funding, and for adaptation finance to match that dedicated to curbing emissions," said WRI. 

Several global organisations especially based in the Global South are hoping to tap the growing need to fund adaptation. Amit Prothi, director general, Coalition for Disaster Resilient Infrastructure (CDRI) said the theme for this COP is “adaptation finance and adaptation solutions.”

CDRI will launch a call for proposal at COP27 to support the adaptation projects in Island states. The initiative follows the launch of Infrastructure Resilient Island States (IRIS) last year which supports the 58 Small Island Developing States (SIDS) in achieving sustainable development “through a systematic approach to resilient, sustainable, and inclusive infrastructure.”

“We would be interested in supporting the Island states through our three core activities – capacity building, knowledge sharing and technical assistance. The program would look at early warning systems, nature based solutions, climate resilient infrastructure among others. Most of it is adaptation focus and the agenda also is to build on our work to get additional finance for climate resilient infrastructure,” Prothi told this paper.

CDRI is a partnership of national governments, UN agencies and programmes, multilateral development banks and financing mechanisms, the private sector, and knowledge institutions that aims to promote the resilience of new and existing infrastructure systems to climate and disaster risks in support of sustainable development. It was launched by PM Narendra Modi in 2019 at the UN Secretary-General’s Climate Action Summit in New York, US.

International Solar Alliance (ISA), another multi-country partnership organisation launched and hosted by India is hoping that COP should be able to mainstream solar investment as part of climate investment. “We need to look at the kind of investment strategies that are taken for climate and make sure they are available for solar and particularly they are available for counties where money today is not flowing.,” Ajay Mathur, director general, ISA told this paper recently.

The report by the IPCC Working Group II last year, said climate and weather extremes are increasingly driving displacement in all regions with Small Island States disproportionately affected. “Flood and drought-related acute food insecurity and malnutrition have increased in Africa and Central and South America," it said.

It also observed adaptation is unequally distributed across regions, and gaps are partially driven by widening disparities between the estimated costs of adaptation and documented finance allocated to adaptation. “The largest adaptation gaps exist among lower income population groups. At current rates of adaptation planning and implementation the adaptation gap will continue to grow,” it said.  

Last year, several developing economies including India had proposed for the share of adaptation to increase in the climate finance pool. During COP26, developed countries had agreed to double finance for adaptation from 2019 levels by 2025, which equates to roughly $40 billion. Global aid experts however note, adaptation funding is still a third of the money allotted to emission reduction (mitigation) initiatives.

“At COP27, developed countries must also specify how they will ensure this finance reaches those who need it most. This will mean committing more finance for locally led adaptation, ensuring local people and organisations who are often disproportionately vulnerable to climate impacts have a say in investment decisions and can access the funding and other resources they need to build resilience,” WRI said.