Earth Today | Adaptation Fund gets first financial pledge of 2025

AT A pivotal time when the work of the Adaptation Fund (AF) is more urgent than ever, its resource mobilisation efforts for 2025 kicked off on a positive note as Sweden stepped forward to make the first new pledge of the year to the fund with 130 million SEK (US$13 million).

The pledge was announced during a high-level visit by the AF in Sweden. The Swedish government has been one of the fund’s most consistent contributors.

Sweden is its second largest bilateral donor and has contributed more than US$ 200 million to the fund since its launch in 2010.

“This is an important contribution to global climate work and to support the developing countries that are hardest hit by the effects of climate change. The Swedish support will, among other things, contribute to nature-based breakwaters that will protect against rising sea levels,” said Swedish Minister for Development Cooperation and Foreign Trade Benjamin Dousa in a release to the media.

“It will also help farmers in rural areas to better protect their land against extreme weather events,” he added.

The Adaptation Fund Board will consider setting a new resource mobilisation goal for the Fund in 2025 when it meets for its 44th meeting in Bonn, Germany. The Fund hopes to improve upon the US$133 million it mobilised last year.

The AF has been facing increasing demand for its work over the last several years as the urgency of climate change and the global adaptation financing gap have risen sharply.

The United Nations Environment Programme (UNEP) has estimated a gap as high as US$387 billion a year between what is provided and what is needed for developing countries to adapt to climate change through international adaptation public finance flows.

PIPELINE PROJECTS

With a pipeline of nearly US$600 million of projects that have not yet been approved or funded, the AF also has a mandate from decisions by Parties at the UN COP29 climate conference last year that calls for a tripling of outflows from 2022 levels by the AF and other United Nations Framework Convention on Climate Change climate funds by 2030. This would amount to the fund increasing to about US$400 million in project outflows per year.

Although the Fund will receive a five-per-cent share of proceeds from a new Carbon Crediting Mechanism under the Paris Agreement (Article 6.4) in the near future, it is unclear how much that might generate and how soon.

Parties and other stakeholders using cooperative approaches under Article 6.2 of the agreement are also strongly encouraged to make direct monetary contributions to the fund.

It is hoped that Sweden’s valuable contribution will help set the tone for others to come forward in 2025.

“We would like to thank the Swedish government for its generous pledge, which will help further the Adaptation Fund’s tangible actions on the ground for the most vulnerable,” said Mikko Ollikainen, head of the AF.

“Sweden is one of our longest-standing and most-consistent supporters and biggest contributor on a per capita basis. Sweden’s support for the work of the Adaptation Fund through financial contributions and active engagement on the board has been invaluable to the evolution of the Fund,” he added.

“Scaling up the work of the fund is more important now than ever as we strive to meet the goals of the Paris Agreement, so no one is left behind. The fund has further proven to deliver effectively and efficiently since its launch nearly 18 years ago,” Ollikainen said further.

Since inception in 2010, the Adaptation Fund has grown its portfolio to about US$1.25 billion, committed to more than 180 projects (about half in LDCs or SIDS) serving nearly 46 million beneficiaries; trained 1.55 million people in climate resilience measures; created 577 early warning systems and 116 policies to address climate-change risks, as well as preserved 728,000 hectares of natural habitat and 181,000 metres of coastlines.

VOLUNTARY CONTRIBUTIONS

Although the Fund was initially set up to receive financing from a two-per-cent share of sales of carbon-emission reduction credits through the Kyoto Protocol, it has largely relied on voluntary private and public contributions since the carbon market dropped significantly in 2012.

Additional contributors to the fund have come forward since it began to formally serve the Paris Agreement in 2019, and the fund intends to increase those numbers throughout 2025.