institutional arrangements for adaptation fund: world bank view

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Institutional Arrangements for Adaptation Fund: World Bank view Oceans Health Agriculture Disasters Deserts Biotic resources Coastal Steve Gorman Global Environment Operations World Bank

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Deserts. Disasters. Health. Agriculture. Institutional Arrangements for Adaptation Fund: World Bank view. Biotic resources. Coastal. Oceans. Steve Gorman Global Environment Operations World Bank. Adaptation Agenda. Adaptation and Mitigation are strong complements - PowerPoint PPT Presentation

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Page 1: Institutional Arrangements for Adaptation Fund: World Bank view

Institutional Arrangements for Adaptation Fund: World Bank view

OceansOceans

HealthHealth

AgricultureAgriculture

DisastersDisastersDesertsDesertsBiotic resources

Coastal

Steve GormanGlobal Environment Operations

World Bank

Page 2: Institutional Arrangements for Adaptation Fund: World Bank view

Adaptation Agenda

• Adaptation and Mitigation are strong complements• Climate change impacts on developing countries are expected to

increase regardless of mitigation efforts• Demand for infrastructure and agricultural/water investments that

further need to adapt to climate• Adaptation links global environment issues with local development

paths• Development investment is at risk in the absence of consideration of

climate variability and climate change issues• The Multilateral financial institutions can effectively link the lending

and adaptation agenda to produce synergies• Expected growth of adaptation agenda within UNFCCC • Need to strengthen national and local institutions to promote

adaptation• Need for long-term funding arrangements to support adaptation

agenda

Page 3: Institutional Arrangements for Adaptation Fund: World Bank view

Adaptation and Development as part of World Bank Poverty Agenda

• According to OECD Study, 20% to 50% of ODA is subject to climate risk • Whatever the mitigation efforts, we are already committed to significant

climate change• Current climate variability and climate change are significant threats to

development

-

1,000

2,000

3,000

4,000

1970s 1980s 1990s 2000s

Nu

mb

er

aff

ec

ted

(M

illio

ns

)

Dev'ed

CIT

Dev'ing

LDC

Climate disasters are already a major burden for developing countries

Page 4: Institutional Arrangements for Adaptation Fund: World Bank view

-80

-60

-40

-20

0

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

year

%

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

rainfall variability

GDP growth

Ag GDP growth

Ethiopia

A water rich developing country, but with GDP tied to annual rainfall variations. Therefore adaptation and growth & development are closely linked

Preliminary results from : A Country Water Resources Assistance Strategy for Ethiopia

Climate Variability is Major Impediment

to Development

Page 5: Institutional Arrangements for Adaptation Fund: World Bank view

World Bank and IADB Portfolio Study:vulnerability to climate change

World Bank IADB

• Average no. of projects each year 440 91

• Average size of annual financing portfolio $ 20 B $ 6.6 B

•• % of projects with moderately sensitive components 40% 27%

• % of projects with highly sensitive components 25% 11%

• Estimated annual expenditure at risk $ 5.3 B $ 1.2 B• (Level 2 & 3 impacts) (21 – 34 %) (8 – 33 %)

Page 6: Institutional Arrangements for Adaptation Fund: World Bank view

World Bank’s Implementation of Adaptation Agenda

• Mainstreaming adaptation initiatives in country assistance strategies • Financing and technical support to adaptation programs outlined in

poverty reduction strategies • Adaptation is a major consideration in development policy lending and

sector wide adjustment programs• Anticipatory adaptation is a major component of World Bank Hazard

Management Program• Bank support to private sector development, microfinance, insurance, and

small and medium enterprises to promote adaptation at local level• Engagement of line ministries at the policy level to promote adaptation

agenda• Analytical activities supporting adaptation in Bank policy and lending

programs

Page 7: Institutional Arrangements for Adaptation Fund: World Bank view

World Bank Experience in Global Funds that Complement Adaptation Fund

• More than 30 years experience in managing trust funds on global programs• Currently manages over 850 trust funds valued at over $9 billion yearly covering all major

sectors with over 25 which Adaptation Fund overlaps

Page 8: Institutional Arrangements for Adaptation Fund: World Bank view

World Bank Lending/Co-financing

TechnicalSupportTo GEF

Co-financing Complements Adaptation Fund

Adaptation Fund

As GEFImplementing

Agency

Emergency Lending

for Hazards

Market Mechanisms-

Carbon Finance/Insurance

Facility

Global programs

& Trust Funds

DevelopmentPolicy

Lending

InvestmentLending

Trustee GEF TF/

SCCF/LCDF

Support toGEF

Secretariat

Page 9: Institutional Arrangements for Adaptation Fund: World Bank view

Proposal on Governance Structure for Adaptation Fund

Country Coordinating Mechanisms for Adaptation Projects and Programs(GEF Focal Points)

National governments

GEF Council

GEF Secretariat

Strategy/Business Plan

Agencies

IAs / EAsUNFCCC Share of Proceeds

TrusteeWorld Bank

Multilateral & Bilateral

Development Organizations

Civil Society - NGOs, CBOs

Private Sector

Evaluation OfficeM&E

Page 10: Institutional Arrangements for Adaptation Fund: World Bank view

GEFGEF$2.8 $2.8 billionbillion

IBRD/IDA IBRD/IDA $4.8 billion$4.8 billion

Other CoOther Co --financingfinancing$13.8 billion$13.8 billion

World Bank Group – GEF Program:Mobilizing Public and Private Fu nds

($21.4 billion) 1993-2005

Page 11: Institutional Arrangements for Adaptation Fund: World Bank view

Costs of Administering Stand Alone Adaptation Fund

Year CERs (Million)

2% of CERs

Size of Fund

@ $ 15/ CER

Admin. Costs of standalone AF

@ 5% of Fund

Current estimate from project pipeline for 2012

340 6.8 $ 102 M $ 5.1 M

Low Expectation for 2012 910 18.0 $270 M $ 13.5 M

Medium Expectation for 2012

1500 30.0 $ 450 M $22.5 M

High Expectation for 2012 2000 40.0 $ 600 M $30.0 M

Source: UNFCCC and WB estimates

Note: Administrative costs of a stand alone AF could be saved by managing AF as part of existing GEF trust fund portfolio

Page 12: Institutional Arrangements for Adaptation Fund: World Bank view

World Bank Contribution to Adaptation Fund

World Bank’sMultiple Roles under Adaptation Fund

Trustee of Adaptation Fund

&(GEF TF,

LCDF, SCCF)

As ImplementingAgency

Coordinating with other IAs & EAs on Adaptation

Projects

Technical Support to

GEF Secretariat

Mainstreaming Adaptation

through PRSPs, CAS

Co-financing to AdaptationProjects and NAPAs

Policy & Market Mechanismsfor Adaptation Investments

Capacity & Knowledge mgt of Adaptation Programs

Support to Private Sectoron Adaptation Agenda

Page 13: Institutional Arrangements for Adaptation Fund: World Bank view

World Bank’s Implementation of GEF Funded Adaptation Projects

• Kiribati Adaptation Program (SPA funded)• Columbia’s Caribbean Insular Human Health (SPA funded)• Pilot Adaptation in Coastal areas of Dominica, St. Lucia • (SPA funded)• Sustainable land management in Zambezi valley (pipeline)

(SPA funded)• Pilot Climate Change Adaptation Measures in Andean

Region (SCCF funded)• Caribbean Mainstreaming Adaptation to Climate Change

(Stage II Adaptation funding)• Caribbean Planning for Adaptation to Global Climate Change

(Stage II Adaptation funding)

Page 14: Institutional Arrangements for Adaptation Fund: World Bank view

Multi-sector Approach - Kiribati Adaptation Project

• Hazard mapping done to avoid infrastructure in flood and landslide prone areas

• Elevation of coastal infrastructure

• Introduction of building codes

• Protection of coral reefs

• Replanting of mangroves

• Improved sanitation

• Management of solid and liquid waste

• Vector control programs for dengue fever

• Monitoring of areas prone to ciguatera outbreaks

Public Health

Coastal Assets

• Regional collaboration in tuna negotiations

• El Nino/La Nina forecasting

• Licensing arrangements to decrease year-to-year fluctuations

Fisheries

• Crop improvement programs to promote improved adaptation of cassava, yam, taro, sugarcane

• Support to agricultural and rural development programs

• Improving climate forecasting mechanisms

Agriculture

Page 15: Institutional Arrangements for Adaptation Fund: World Bank view

Conclusions

• GEF management of AF with other Funds (GEF TF/SCCF/ LCDF) avoids additional costs and time associated with standalone administration of Adaptation Fund

• Experience in managing GEF Trust Funds permits application of same standards/oversight to Adaptation Fund

• Small and uncertain size of Adaptation Fund can be better managed as compliment to the portfolio of GEF Trust funds

• Adaptation fund could benefit from the larger co-financing and global program resources

• Use of existing trustee infrastructure to manage the Adaptation Fund can result in significant cost savings, which could be ploughed back into the fund to support more projects