Climate change is not just an environmental issue but one with severe socio-economic implications, particularly in developing countries, which will require significant increases in support to finance their adaptation efforts.
The Adaptation Fund has been established by the Parties to the Kyoto Protocol of the UN Framework Convention on Climate Change (UNFCCC) to finance concrete adaptation projects and programmes in developing countries that are Parties to the Kyoto Protocol. These projects and programmes are country driven and based on the needs, views and priorities of eligible developing country Parties. Its primary financing comes from a two percent share of proceeds of the Certified Emission Reductions (CERs) issued by the Clean Development Mechanism (CDM) under the Kyoto Protocol for projects in developing countries.
The governance of the Adaptation Fund reflects its innovative source of financing. It assigns ownership and control over the use of funds to a Board with majority control by developing countries. The World Bank serves as interim Trustee for the Adaptation Fund and up to January 2011 has sold 8.2 million CERs, generating approx. US$ 138 million for the Fund, supplemented by donations of over US$ 85 million. The Global Environment Facility (GEF) provides secretariat services. As interim Trustee, the World Bank performs two core functions— CER Sales, and Adaptation Fund Trust Fund management.
For the most up-to-date account of resources available, see the reports prepared by the World Bank entitled: Financial Status of the Adaptation Fund Trust Fund, available at www.adaptation-fund.org