Institutional Arrangements for Adaptation Fund: World Bank view

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

2. 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

3. 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 Climate disasters are already a major burden for developing countries

4. Climate Variability is Major Impediment to Development Ethiopia A water rich developing country, but with GDP tied to annual rainfall variations. Therefore adaptation and growth & development are closely linked 25 20 15 10 5 0 0 % -5 -20 1992 1987 1990 1997 1998 2000 1989 1993 1995 1988 1991 1994 1996 1999 1982 1984 1985 1983 1986 -10 -15 -40 rainfall variability -20 -60 GDP growth -25 Ag GDP growth -80 -30 year Preliminary results from :A Country Water Resources Assistance Strategy for Ethiopia

5. 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 %)

6. 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 majorconsideration 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

7. 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

8. Co-financing Complements Adaptation Fund Trustee GEF TF/ SCCF/LCDF Investment Lending As GEF Implementing Agency Technical Support To GEF Development Policy Lending World Bank Lending/ Co-financing Adaptation Fund Global programs & Trust Funds Support to GEF Secretariat Market Mechanisms- Carbon Finance/ Insurance Facility Emergency Lending for Hazards

9. Trustee World Bank GEF Council GEF Secretariat Strategy/ Business Plan Agencies IAs / EAs UNFCCC Share of Proceeds Country Coordinating Mechanisms for Adaptation Projects and Programs (GEF Focal Points) National governments Private Sector Multilateral & Bilateral Development Organizations Civil Society - NGOs, CBOs Proposal on Governance Structure for Adaptation Fund Evaluation Office M&E

11. Costs of Administering Stand Alone Adaptation Fund 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

12. World Bank Contribution to Adaptation Fund World Bank’s Multiple Roles under Adaptation Fund Co-financing to Adaptation Projects and NAPAs Trustee of Adaptation Fund & (GEF TF, LCDF, SCCF)  As Implementing Agency Coordinating with other IAs & EAs on Adaptation Projects  Technical Support to GEF Secretariat Mainstreaming Adaptation through PRSPs, CAS Policy & Market Mechanisms for Adaptation Investments Capacity & Knowledge mgt of Adaptation Programs Support to Private Sector on Adaptation Agenda

13. 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)

14. Multi-sector Approach - Kiribati Adaptation Project • Crop improvement programs to promote improved adaptation of cassava, yam, taro, sugarcane • Support to agricultural and rural development programs • Improving climate forecasting mechanisms Agriculture • Improved sanitation • Management of solid and liquid waste • Vector control programs for dengue fever • Monitoring of areas prone to ciguatera outbreaks Public Health • 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 Fisheries • Regional collaboration in tuna negotiations • El Nino/La Nina forecasting • Licensing arrangements to decrease year-to-year fluctuations Coastal Assets

15. 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