Financing Climate Change Adaptation in Transboundary Basins

13 Financing Climate Change Adaptation in Transboundary Basins around the globe (such as hurricanes Harvey, Maria, and Irma—with costs exceeding US$300 billion) are pressing governments to invest in preventive mea- sures and resilience building. Financing for adaptation and resilience in the trans- boundary river basin context is available as grants or loans through such financing sources as multilateral development banks, global climate funds, international financing institutions, bilateral donors, and private part- ners . Each funding source has different financing pro- cedures and project cycles, which can make accessing financing more challenging for countries and RBOs. To facilitate resource mobilization in a transboundary context, RBOs should, if possible, have dedicated experts on climate finance who know the spectrum of financing sources, understand procedures, and develop relationships with donors and financing part- ners. These finance experts require the support of technical teams comprising national government experts, scientists, nongovernmental organizations (NGOs) (such as universities or research institutions), and other regional or international partners. These teams can constructively support relevant steps in the project cycle (such as needs assessments, evaluations, and monitoring) and the success of the project from start to finish. Table A.1 in appendix A compiles the most common funding sources for climate adaptation of relevance to transboundary basins. Multilateral institutions, such as the World Bank, the Global Environment Facility (GEF), and regional develop- ment banks, have specific climate funds, some of which are accessible to transboundary institutions. Some mul- tilateral climate funds are purely grant-based, while others provide both grants and concessional loans. Some financing institutions, such as the African Development Bank (AfDB), give special priority to cli- mate projects aligned with NAPs or a country’s NDC. In addition, most bilateral donors have specific funds for climate change with dedicated levels of financing, specific financing modalities and procedures, and, often, particular requirements for each project type. Project cycles vary by institution, especially regarding implementation, monitoring, and evaluation. Accreditation permitting countries or institutions to receive, manage, or implement climate financing is some- times required and can be complex, requiring careful consideration as to the costs and benefits. In most cases, accreditation enables direct access by a country or organization, increasing ownership and financial benefit. 2.3 Climate Finance and Funds Arising from the UN Climate Convention Financing climate mitigation and adaptation is one of the specific commitments of developed countries to devel- oping countries under Article 4 of the UNFCCC. This sec- tiondescribes the key fundingmechanisms established by agreements under the United Nations Framework Convention on Climate Change (UNFCCC). Unlike overseas development assistance (ODA), this category of climate finance emerges from a treaty obligation and, as such, has rules and modalities agreed to by all member states. Principally, climate finance under the UNFCCC is based on the commitment of developed countries to support mitigation and adaptation in developing countries. Not all financing for climate change originates from or is accounted for as part of these obligations. A significant amount of public, pri- vate, and concessional finance for climate change proj- ects is not related to or governed by the international climate agreements. It is useful to understand the legal basis and means of accessing financing under the global agreements related to climate finance as distin- guished from other sources of financing to mobilize all potential resources, strategically combining as needed in a transboundary context. The UNFCCC specifies when resources will cover full cost (in the case of reporting requirements under the Convention) and when they will cover “incremental costs.” Based on the UNFCCC methodology, incremen- tal costs cover the difference between a less costly,