Financing Climate Change Adaptation in Transboundary Basins

43 Financing Climate Change Adaptation in Transboundary Basins Glossary Adaptation. While definitions vary widely among institutions, adaptation generally refers to measures taken to support and build the ability to withstand the impacts of climate change. This includes changes in processes, practices, and structures to respond to climate impacts. Adaptation can also encompass actions that exploit beneficial opportunities that may arise from climate change (e.g., increased crop yields in certain areas). Adaptation covers a wide range of activities. It might include large infrastructure changes, such as preparing coastal villages to with- stand sea level rise; socioeconomic changes, such as transitioning to crops that can withstand increased temperatures; or behavioral changes, such as encour- aging individuals to use less water or businesses to buy flood insurance. It may be planned or spontaneous, small or large scale. Adaptive capacity . The ability of a system to adjust to climate change (including climate variability and extremes) to moderate potential damages; take advan- tage of opportunities; or cope with the consequences. Bankable. The state of preparedness of a particular adaptation project such that funders find the project sufficiently attractive and secure in terms of invest- ment value. A project is bankable if it illustrates characteristics and is sufficiently elaborated such that financing institutions or organizations will cover the requested costs. Blended finance. Combining of two or more types of financing instruments to cover costs and diversify sources, thereby ensuring that all costs are covered; this reduces risk, and creates greater attractiveness for a wide variety of financiers. Co-benefits. Secondary benefits to the primary objec- tive of a project that will often strengthen a project’s attractiveness for proponents, national or interna- tional partners, and financiers. For climate adaptation projects, these often include mitigation, health, water resources management, and economic development, among others. Climate finance. Any funding allocated to projects that address climate change, whether in the mitigation of greenhouse gases, adaptation to climate impacts, building of resilience to changes in the global climate, or the losses and damages incurred from the onset of climate change. Climate impacts . The effects of climate change on natu- ral and human systems. Potential impacts include all impacts that may occur given a projected change in climate, without considering adaptation. Agreed incremental costs . These cover the difference between a less costly, more polluting option and an alternative, which is more climate friendly or resilient (and usually more expensive). Agreed full cost, in contrast, covers the entire cost of the climate project. Article 4.3 of the UNFCCC delineates what projects under the Financial Mechanism have incremental or full cost coverage. Oversees Development Assistance (ODA) is financing provided from developed to developing countries to assist the latter in attending to diverse development challenges or supporting in crisis situations. Resilience to climate change. The ability to sustain shocks imposed by climate impacts while maintaining integrity. The definition is often expanded to include the capacity to renew and develop , as well as to use certain climate impacts as opportunities for innova- tion and evolution of new pathways that improve one’s ability to adapt to those changes. Climate resilience encompasses a dual function: to absorb shock as well