The Adaptation Fund was established in 2001 to finance concrete adaptation projects and programmes in developing country Parties to the Kyoto Protocol that are particularly vulnerable to the adverse effects of climate change.
The Adaptation Fund is financed with a share of proceeds from the clean development mechanism (CDM) project activities and other sources of funding. The share of proceeds amounts to 2 per cent of certified emission reductions (CERs) issued for a CDM project activity.
The Adaptation Fund is supervised and managed by the Adaptation Fund Board (AFB). The AFB is composed of 16 members and 16 alternates and meets at least twice a year (Membership of the AFB).
Upon the request at CMP 8, the secretariat prepared a technical paper, based on the experiences of bodies under the Convention and the wider United Nations system, on the process of selecting host institutions for entities under the Convention and the wider United Nations system, including the steps and time frames required to conduct open and competitive bidding processes, for consideration by SBI 38.
In decision 1/CMP.8, the Parties decided that for the second commitment period, the Adaptation Fund shall be further augmented through a 2 per cent share of the proceeds levied on the first international transfers of AAUs and the issuance of ERUs for Article 6 projects immediately upon the conversion to ERUs of AAUs or RMUs previously held by Parties.
Adaptation Fund membership
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CMP 9 welcomed the financial contributions that have been made to the AF in 2013 by the Government of Sweden and the Brussels-Capital Region in Belgium, and the pledges of contributions to the AF made by the Government of Austria, Belgium, Finland, France, Germany, Norway and Switzerland, which enabled the AF to achieve its goal of the USD 100 million fundraising by the end of 2013.
At the same time, the CMP continued to encourage Parties included in Annex I to the Convention and international organizations to scale up funding with a view to reaching the Board’s fundraising goal from resources that are additional to the share of proceeds relating to CERs, AAUs and ERUs.
The CMP also decided that an account held in the CDM registry for the AF shall be the recipient of the 2 per cent share of proceeds regarding AAUs and ERUs. In this context, Parties requested the AFB:
Second review of the AF
In decision 1/CMP.3, paragraph 33, the CMP decided to undertake a review of all matters relating to the AF, including the interim institutional arrangements (the secretariat and the trustee) every three years. Following the initial review of the AF concluded at CMP 8, the CMP decided that the second review will be undertaken in accordance with the terms of reference contained in the annex to decision 2/CMP.9. In implementing the second review, the CMP requested the AFB to make available in its report to CMP 10, information on the financial status of the AF, with a view to finalizing the second review of the AF at the same session.
The CMP also requested the SBI 40 to consider the second review of the AF, with a view to recommending a draft decision for consideration and adoption at CMP 10. Furthermore, the CMP requested the secretariat to prepare a technical paper based on the terms of reference contained in the annex to decision 2/CMP.9, taking into account the deliberations and conclusions of SBI 40, for consideration by SBI 41. In this context, the CMP also invited the AFB to provide, in its report to CMP 10, its views on the matters included in the terms of reference for the second review of the AF, taking into account the deliberations and conclusions of SBI 40.
Based on the decision above, SBI 40 considered the second review and prepared draft conclusions including the invitation to Parties and relevant stakeholders to submit further views on the second review and the request to the secretariat, when preparing the technical paper requested at CMP 9, to take into consideration the views expressed by Parties at the fortieth session and the written submissions provided before and at the session.