Adaptation Funding: funding, responsibility, and liability
The scale of the adaptation challenge relates not just to identifying the priorities (Task 4.4), but also the additional costs that will have to be borne, either to make adaptation possible or to compensate damages. The UNFCCC Secretariat Dialogue Working Paper presents an estimate of $41-171 billion annually by 2030 for adaptation in developing countries whereas the cumulative funding to date has been on the order of $0.4 billion, with a comparable amount expected to come in the future from pending pledges plus the revenue expected through 2012 from the CDM adaptation surcharge. The need for a significant scale up in resources inevitably raises the question of the responsibility of nations for causing climate change, as is firmly encoded in national case law, and present in international law such as the 1992 Rio Declaration in which signatories agreed that States have “the responsibility to ensure that activities within their jurisdiction or control do not cause damage to the environment of other States or of areas beyond the limits of national jurisdiction". This underlies various provisions of the UNFCCC that obligate Annex II countries to assist developing countries in meeting adaptation costs under specific circumstances (as expressed in Articles 4.3, 4.4, 4.8, 4.9 and 4.11). Certain GEF channels and Adaptation Fund of the Kyoto Protocol (a 2% levy attached to the CDM), are two means through which funds are being generated. However, these are generally agreed to be far from adequate. In order to generate sufficient funding for adaptation or, in the words of the Convention, to ensure ‘adequacy and predictability´ and ‘appropriate burden sharing´ in funding adaptation, the climate discussion will have to evolve from general acknowledgement of ethical and legal principles to specific definitions of responsibility and their quantification. One example of fairly concrete methods is the typology of quantitative indicators of responsibility recently produced by the World Resources Institute (Baumert & Markoff, 2003). As adaptation funding requirements are assessed, with due account taken of the magnitude of anticipated climate change impacts, the obligation to provide funding would then be allocated to Parties according to an agreed definition of responsibility. This tasks will assess the anticipated and projected flows through existing channels and the emerging understanding of the scale of the adaptation challenge (see Task 4.4), so as to compare the two. It will assess the international environmental legal context and precedents for this issue, and survey the proposals that are on the table for generation and channeling of these required resources (insurance mechanisms, “Autonomous Development Funds", aviation levy, trading (ET and JI) surcharge, ODA “strategic priorities", legal proceedings, etc.). It will identify options that appear promising with respect to their viability as a means of providing the resources at the necessary scale, consistency with UNFCCC decisions and international legal precedent, and, drawing upon Task 4.1, with the development constraints and needs in developing countries.
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