Adaptation Starts Here
At the beginning of this year I visited the Ekipe village in Vanuatu to meet with rural women, men and children. UNDP
has helped this community to establish regular access to sources of fresh water, helping the villagers to deal with the
problem of increased water salinity due to the rising sea levels. Yet climate change is the issue of survival not only
in Vanuatu but in all Pacific islands. Their successful adaptation will require investments much larger in scale than
one village at a time.
The funding availability will depend on the outcome of international climate change negotiations. Just before the Cancun
round, the UN Secretary-General’s Advisory Group on Climate Finance has concluded that it will be “challenging but
feasible to reach the goal of mobilizing US$100 billion annually for climate actions in developing countries”. According
to the same panel, which included globally recognized authorities such as Larry Summers, Nicholas Stern and George
Soros, as well as Hon Bob McMullan from Australia, for the small island developing states the funding will come mostly
in the form of grants and highly concessional loans.
However, achieving the numerical $$ target is not a panacea, especially if the new funding is to be disbursed through
disjointed projects and separate donor channels as had been often the case. Unless well prepared for, the financial
influx can add significant strains on national systems of public finance and have little impact on climate change
adaptation. For climate finance to be quickly accessed, effectively absorbed and wisely spent, it will be crucial for
governments and donors alike to ramp up their policies, budgets and aid systems. Few concrete actions can help to
strengthen effectiveness of the climate finance in the Pacific.
First, it is timely that island countries move from the environment-focused to the whole-of-government approach to
climate action. If the climate change adaptation were to be fully integrated into national policy agendas as a
cross-cutting priority, then national ownership of the climate action would need to expand far beyond environment
departments (which are often under-resourced) and involve climate-proofing of all sector policies. The
whole-of-government approach will also require much closer coordination between central and line ministries, between
national and provincial authorities, and between legislative and executive branches.
Linked to that, the climate finance should be seen as public investment in building climate resilient future of Pacific
island countries rather than just an additional funding stream. By associating climate finance with broader development
objectives the countries will begin to integrate donor funding with domestic resource mobilization. This will ensure
that externally sourced funds help to address and reinforce national priorities and contribute to the integrity and
effectiveness of national budgets. Integrated domestic-external sourcing of climate finance is also essential for the
sustainability of adaptation related initiatives.
And thirdly, the donors will need to move away from individual projects as a primary instrument of delivering climate
finance to the sector-wide and area-based programs. Today a Pacific island government compiles dozens of donor reports
every month, receives several donor missions every week and deals with multiple bilateral and multilateral donors every
day. All of this is taxing rather than enhancing their absorptive capacities. While some overlap can be reduced through
improved coordination within the governments, the donors should consider joint rather than stand alone interventions as
default option for channeling climate finance. And as national absorptive capacities increase, further progress towards
direct budgetary support will be in order.
All of this would form lengthy agenda for any government, let alone the small national administrations of Pacific island
countries. Identifying policy interventions with strong multiplier effect will help. In this regard the region can learn
from experiences of other developing countries, several of whom are pooling various aid channels through multi-donor
climate funds. In Indonesia and Cambodia, for example, the multi-donor climate funds are enabling the governments to
drive the aid effectiveness, to reduce donor overlap and to cut the transaction costs. In both cases UNDP has helped to
set up the trust funds and is administering them on interim basis before the appointment of national trustees or
transition to direct budgetary support.
The Pacific can offer relevant experiences of its own – such as the Tuvalu Trust Fund, which was established in 1980s
with support from New Zealand, United Kingdom and UNDP as an alternative mechanism of delivering untied development aid.
This “homegrown” model, as well as the lessons learned with the multi-donor climate funds in Asia, will help to design
the Pacific-specific strategies of ramping up national absorptive capacities for climate finance.
We are at the cusp of a new era when dramatic surge in climate finance from public and private sources is likely to
transform the international development paradigm. As such, if used wisely the new funding can help the countries to
adapt to climate change not only through climate-proof infrastructure and disaster risk reduction, but also by
empowering local communities and addressing the needs of most vulnerable groups. Having already placed climate finance
on the agenda of the Pacific Forum Leaders and its ministerial groups, the region is well positioned to become a global
trend-setter in climate change adaptation. Ultimately, the sharper focus on climate finance effectiveness will help to
bring about climate-resilient future and better human development opportunities for villagers in Ekipe and in many other
communities spread across the vast Pacific Ocean.
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Ajay Chhibber is Assistant Secretary-General of the United Nations, Assistant Administrator of the United Nations Development Program and Regional Director for Asia and the Pacific