Climate Change and the Cost of Mitigation

Almost every day a think-tank or a non-governmental organisation releases a new price tag for mitigating or adapting to the impact of climate change in poor countries.

The World Development Report 2010, the World Bank's flagship annual report, put the cost of mitigation in developing countries as high as US$400 billion a year for the next 20 years, noting that adaptation investments could average $75 billion a year from 2010 to 2050.

What financing mechanisms and funding are available right now for adaptation and mitigation in developing countries? Here is a guide, based on a list prepared by the World Bank report, and the World Economic and Social Survey (WESS), published annually by the UN Department for Economic and Social Affairs.

Under the UN Framework Convention on Climate Change (UNFCCC):

The Global Environment Facility (GEF) - a 178-member international financing body that helps developing countries fund projects and programmes to protect the global environment - as of December 2008, US$352 million of the $1.03 billion for mitigation had been committed to projects.

Sustainable Forest Management - this special GEF programme has $154 million available for land use, land-use change and forestry projects.

Sustainable Priority on Adaptation (SPA) - the GEF Trust Fund's pilot programme on adaptation - the entire $90 million available has been allocated.

Special Climate Change Fund (SCCF Adaptation), operated by GEF - as of December 2008, $68 million of the available $90 million had been allocated to 15 projects.

Least Developed Countries' Fund, operated by GEF - $172 million (including pledges); as of December 2008, $91.8 million has been available for adaptation projects.

Adaptation Fund - as of October 2008, $91.3 million was available for adaptation projects. Billions of dollars have been pledged.


Cool Earth Partnership (Japan) - this $10 billion facility, set up by the Japanese government, provides grants and loans for adaptation and mitigation projects and is available until 2012. It has up to $2 billion for improving access to clean energy, and $8 billion in preferential interest rate loans for mitigation projects.

Climate and Forest Initiative (CFI) (Norway) - a $2.2 billion Norwegian government fund, available until 2012, which provides grants for mitigation projects; it has pledged $102 million to the Amazon Fund, an NGO that will use the money to help conserve the rainforests of the Amazon River Basin.

International Window of the Environmental Transformation Fund (ETF-IW) (United Kingdom) - money from this fund, established by the UK government, is available until 2010. It hopes to allocate most of the $1.18 billion available via the World Bank Climate Investment Fund, set up in 2008 to help developing countries implement mitigation and adaptation projects.

Amazon Fund (Brazil) - so far only Norway has pledged $102 million to this fund, which is supposed to have about $1 billion. Donations will be administered by the National Development Bank of Brazil.

International Climate initiative (ICI) (Germany) - this $764 million fund, established by the German government, hopes to raise 10 percent of its allowances from the Emission Trading Scheme of the European Union, under which energy-intensive companies can buy and sell permits allowing them to emit carbon dioxide.

The International Forest Carbon Initiative (IFCI) (Australia) - the fund set up by the Australian government hopes to provide grants from its pool of $129 million for mitigation projects until 2011. As of November 2008, $50 million had been allocated.

UN Development Programme - Spain Millennium Development Goal Achievement Fund, Environment and Climate Change thematic window - this $90 million initiative will provide grants for mitigation and adaptation projects until 2010.

Global Climate Change alliance (GCCA) - this $76 million fund created by the European Commission provides grants to the most vulnerable countries, such as small islands, for adaptation and mitigation projects.


Forest Carbon Partnership Facility - a $385 million facility established by the World Bank to provide grants and loans for mitigation projects until 2020. It has committed $160 million so far.

The Carbon Partnership Facility, also set up by the World Bank - has $500 million available for mitigation projects, of which $140 million has been committed.

Global Facility for Disaster Reduction and Recovery (GFDRR) - a donor-funded facility for adaptation projects administered by the World Bank - has received only $15 million of $83 million pledged.

UN Collaborative Programme on Reducing Emission from Deforestation and Forest Degradation in Developing Countries (UN-REDD) - a facility of more than $52 million for mitigation projects; it has approved six initiatives worth almost $30 million to date.

Climate Investment Funds, consisting of the Clean Technology Fund and the Strategic Climate Fund, administered by the World Bank - this $6.2 billion facility provides loans and grants for mitigation and adaptation projects through the two funds. The United States has put $2 billion into the Clean Technology Fund and is its major backer.

Sustainable Energy and Climate Change Initiative (SECCI), created by the Inter-American Development Bank - this $29 million facility provides grants and loans for adaptation and mitigation projects. It has backed major investments in the development of biofuels, renewable energy and other sustainable energy options.

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South Africa is working towards a strategic policy framework in which our emissions peak between 2020 and 2025, stabilize for a decade, before declining in absolute terms towards mid century.

To achieve this we will require extensive international financial and technical support.

- South African Government, September 2009

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