13th of January Subject: Mandates of Adaptation Committee and LDC Expert Group based on paragraphs 41, 42 (b) and 45 of Decision 1/CP.21.

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1 SUBMISSION BY GUATEMALA ON BEHALF OF THE AILAC GROUP OF COUNTRIES COMPOSED BY CHILE, COLOMBIA, COSTA RICA, HONDURAS, GUATEMALA, PANAMA, PARAGUAY AND PERU 13th of January 2017 Subject: Mandates of Adaptation Committee and LDC Expert Group based on paragraphs 41, 42 (b) and 45 of Decision 1/CP.21. AILAC welcomes the opportunity to submit its views on the recognition of adaptation efforts of developing countries as well as, on the mobilization of resources and on the adequacy and effectiveness of adaptation action and support. This submission complements views that AILAC has shared in the UNFCCC negotiations and specifically in the side event the AC and LEG held during COP22. The submission is structured in three sections addressing the following mandates of decision 1/CP.21 contained in paragraphs 41 and 45. It also contains relevant aspects responding to the mandate in paragraph 42 (b). Upcoming submissions of the group will address further mandates given to the AC. I. Request the AC and the LEG to jointly develop modalities to recognize the adaptation efforts of developing country Parties, as referred to in Art. 7, para. 3, of the Paris Agreement, and make recommendations for consideration and adoption by CMA 1 1. For AILAC, the recognition of the adaptation efforts of developing countries is relevant and serves different purposes including: a. to share experiences and lessons learned in the implementation of adaptation actions. b. to enhance adaptation-related investments and the understanding of those investments. c. to reaffirm that the definition of adaptation efforts, policies and plans needs to be countrydriven. A. What is the range and scope of adaptation efforts? 2. Adaptation efforts are varied within countries and across countries as well. From AILAC s perspective, these efforts could be: a. Policies, projects, programs implemented at different scales and could also include NAPs. b. Specific activities within development programs and plans in priority vulnerable sectors. 3. However, the actual range and scope of adaptation actions will be directly linked to the means of implementation available, including in supporting institutional capacities, finance, technology and research. 4. Many of the adaptation efforts have been detailed in the National Communications and are submitted periodically to the UNFCCC by Parties. 5. Also, the recognition of adaptation efforts can be enriched with the work of a wide range of actors (government, cooperation, private sector, civil society, local and indigenous peoples, vulnerable populations), at different levels (local, regional, subnational and national) ecosystems and sectors. B. How do you define and document adaptation efforts? 6. Adaptation efforts are defined by national priorities. Adaptation efforts are actions carried out to help achieve the objectives of the Convention, the purpose of the Paris Agreement (in its Art. 2 (b)) and the global goal on adaptation as expressed in Art. 7.1 of the Paris Agreement. These efforts are oriented to increase adaptive capacity and resilience of actual and future populations, ecosystems and sectors at all levels. 7. Processes should be undertaken by Parties to ensure adaptation efforts and their indicators are included across all government agencies processes that respond to the specific adaptation needs and objectives of each country, in the context of national strategic planning and sustainable development. 1

2 8. Parties document adaptation efforts in numerous ways for national purposes. However, it is clear that the Convention has established the National Communications as the reporting mechanism for the recognition of climate change efforts that Parties carry out. 9. In this sense, it is essential that adaptation efforts are documented in a manner that will not represent undue additional burden. Therefore, the AC and LEG must take into consideration: a. That adaptation measures (as established in Art. 4.1 of the Convention) are currently being documented for the Convention through the National Communications that Parties present. b. That the development of NAPs and adaptation planning processes improves the knowledge and understanding of adaptation actions at the national level and can provide inputs and information for reporting in the National Communications. C. Do you encounter difficulties in terms of data sourcing or completeness? 10. Development of adaptation efforts requires scientific inputs as well as traditional and indigenous knowledge in order to ensure effectiveness. These scientific inputs include downscaled future climate scenarios, which can be actionable at the national and local level, which are often unavailable or of poor quality in many developing countries. There are clear opportunities for improving both the systematic observation of climate and the predictive and modeling capacities of regional and national met offices. 11. There is also an urgent need to feed these climate scenarios into socio-economic data on exposed and vulnerable populations, assets and ecosystems, in order to define the adaptive capacities of a given country or region, and act accordingly through specific policies. It is important to underline here that adaptation efforts are particularly relevant for the most economically disadvantaged. These groups are the most in need to adapt to the immediate effects of climate change, such as droughts, floods, food security, public health, among other factors. For these reasons, adaptation efforts need to be integrated in social policies to contribute to the ultimate goal of achieving sustainable development and eradicating poverty. 12. In this context, there are significant challenges in the design and the implementation of adaptation efforts, such as: a. Incomplete data due to remoteness of sources and also capacity constraints, which include structural limits to equipment to collect data and systems to maintain these. b. Lack of guidance on what data is needed and can be useful to evidence impacts from adaptation to climate change. c. Technical difficulties in developing impact and results indicators. d. Different sources and quality of the information available across different information providers and consistency of data throughout time. e. Difficulties in the integration of adaptation data in social policies across all relevant government agencies. f. Challenges in assessing the economic risks of climate change as well as costs of inaction. D. Could you provide examples or possible modalities of how adaptation efforts of developing countries could be recognized under the Convention? 13. Currently, under the Convention there are numerous manners of how adaptation efforts of developing countries could be recognized and although these can be enhanced, we must not burden countries in the recognition of efforts nor reinvent reporting vehicles that already exist. 14. The National Communication should continue to be the reporting mechanism for Parties to show the state of art of adaptation efforts and results of the adaptation efforts that each party is carrying out as the means for recognition under the Convention. Whether a Party is implementing adaptation efforts defined in its NAPA, the NAP or in its adaptation component of the NDC, the reporting of that implementation should continue to be through the National Communication as a means for recognition of individual Party efforts. 15. As such, the National Communication will be a key input to the enhanced transparency framework established in the Paris Agreement and from there, it will also be an input so the global stocktake can fulfill Art 7.14 subliteral (a). 2

3 16. For some Parties, the adaptation communication could also help in the recognition of upcoming efforts in the sense that it comprises national priorities, implementation and support needs, plans and actions, as indicated in Art However, it is crucial that the adaptation communication and its purpose are not overburdened with specifics that should be part of the National Communications particularly, to avoid duplication of efforts. 17. Adequate monitoring and evaluation systems, defined through country driven processes would be an instrumental part of reporting to the UNFCCC on what countries have carried out (via their National Communication). In this sense, developing countries should receive enhanced support in order to develop the monitoring and evaluation systems as potential key inputs to their National Communication. 18. Moreover, the recognition of adaptation efforts (provided individually by Parties through the National Communication as an input to the enhanced transparency framework and from there to the global stocktake) will have a higher profile once its collective recognition is done through the global stocktake as established in Art.7.14 (a) of the Paris Agreement. 19. Parties should also take advantage of existing networks or forums for further recognition, including the NAP central, the Nairobi Work Program and the TEP-A to present their efforts as a means to share lessons learned. E. Do you foresee any challenges or barriers in recognizing adaptation efforts of developing countries? 20. The impacts of climate change represent significant burdens to the development of countries. Adaptation is a crucial yet costly task that can also be considered an opportunity to enhance the development potential of countries in future climate scenarios. 21. Numerous challenges are present in AILAC countries, including: a. Mainstreaming adaptation efforts in national budgets as part of the development planning process. b. The limited capacity in developing countries to produce, gather, analyze, disseminate and manage climate related information, including through an active engagement with stakeholders such as the academia, institutes, research centers and national information agencies. c. Mapping all efforts in the countries, across levels and across stakeholders. d. Financial support, in particular in cases where the support received is not aligned to priorities and needs of the country. e. Definition of local indicators to measure vulnerability and the process to report on progress, including common metrics across territories and in similar sectors including impacts that may be measured in common systems such as number of hectares of crops affected by drought, intense rainfall etc. f. Recognition of the uncertainty associated to the impacts of climate change. II. Mandate requests the AC and LEG with SCF to develop methodologies and make recommendations on necessary steps to facilitate the mobilization of support for adaptation in developing countries in the context of the limit to global average temperature increase referred to in Article 2 of the Paris Agreement. A. What experiences, including lessons learned and good practices, do you consider valuable in facilitating the mobilization of support for adaptation in developing countries? 22. As countries now implement their NDCs and seek funding to formulate and implement their National Adaptation Plans, guidelines or methodologies to identify adaptation priorities, needs, and define financial requirements would be useful for national focal points and adaptation policy-makers. 23. In some cases, the biggest challenge in terms of mobilization of financial resources for adaptation is to have an assessment of priorities and needs (ideally based on development plans or NAPs) and translating these into high-quality projects ready to be funded. Experience proves that when projects are based on sound information and include social and environmental safeguards there are better chances of being funded from different sources, including private investments and multilateral funds. To overcome this challenge, the involvement of national financial authorities, regulatory policies and development authorities is crucial. 3

4 24. Including the following considerations has facilitated the mobilization of support for adaptation in some of the AILAC countries: a. Strengthen domestic enabling environments that facilitate mobilization of support including: i. Inter-institutional coordination and dialogue at the technical and political levels to identify priorities and define minimum criteria to access financial resources. ii. The quantification of economic impacts of climate change, which provides a more accurate idea of the costs of inaction. iii. Establishing national implementing entities helps to build capacities and knowledge for the country and for future related activities or projects. iv. Nominating national project focal points that are permanently articulating the project s activities with the national priorities and goals that address identified needs. v. Permanent adaptation team to follow up on the different projects and plans of adaptation. b. There is evidence that those adaptation projects that create social co benefits around specific needs are more attractive as national and international investment opportunities. c. Providing counterpart contributions of national budget to address adaptation efforts and needs helps to ensure national commitment and ownership that facilitates implementation and continuity of different projects. B. Which steps would be necessary to facilitate the mobilization of support for adaptation in developing countries in the context of the limit to global average temperature increase referred to in Article 2 of the Agreement? 25. There are significant gaps that can be identified in terms of the required adaptation action as we move from a global goal to national targets in the context of the temperature goal. These adaptation efforts should not be divorced from everyday development planning and territorial planning. 26. The UNEP Gap Report is a useful reference as a global overview of the needs and funding gap existing in adaptation. This report covers some necessary steps that would need to be taken to mobilize support. 27. The Global Goal on Adaptation is an aspirational target, which is explicitly linked to the temperature target. Parties could begin the task of mobilization of support by first establishing goals in terms of increasing resilience, reducing vulnerability and enhancing adaptive capacity within their country. With these goals established, concrete adaptation efforts can be designed with costs to then identify needs, as well as, funding strategies to implement those efforts. This process will allow identifying gaps where resources will be needed and opportunities (i.e. for leveraging of resources or potential interested stakeholders) to fund the adaptation efforts. As aforementioned, the monitoring and evaluation facilitates identifying next steps once new vulnerability assessments are taken and adaptation efforts will be designed once again with new risks and vulnerabilities in mind (creating a cycle of enhanced adaptation action). 28. Inclusive participation processes are crucial for the success of this effort, in order to validate decisions and policy definitions. 29. Furthermore, it would be beneficial to enhance the use of public finance and policy interventions to create regulation and incentives to promote the mobilization of resources for adaptation action. Some examples are: a. Identifying co-benefits in public and private investment opportunities that deliver both adaptation and mitigation outcomes in strategic areas such as energy, land use, land-use change and forestry, as well as cities and major infrastructure projects. b. Improve information disclosure in financial markets so risks can be priced and better managed. c. Strengthen the co-benefits between adaptation and mitigation actions. d. Develop incentives to investment of adaptation action i.e. financial incentives to develop certain crops that are more apt for specific territories (considering expected climate change impacts) than in others. e. Create and strengthen adequate norms and institutional arrangements. 4

5 C. What methodologies can be used to take the above necessary steps? 30. There have been several attempts to develop methodologies to monitor, track and evaluate the mobilization of financial resources for adaptation. AILAC is of the view that we should build upon these efforts and avoid duplication. Some of the challenges faced for the monitoring and scaling-up of finance for adaptation could be overcome by agreeing on principles and general criteria regarding what counts as climate finance in the context of the enhanced transparency framework. 31. The Standing Committee on Finance conducted the Second Biennial Assessment and Overview of Climate Finance Flows in 2016 and there are several recommendations that should be taken into account for the work ahead in this regard. 32. An assessment of priorities and needs and how these can be translated into high impact projects (ready to be funded) for multilateral and other sources of funding including private investments. It is crucial to have national financial authorities, regulatory policies and development authorities involved, as this must be a country driven process. 33. The systematic collection of data from all actors is relevant in order to determine the baseline for adaptation actions and support. III. Mandate Requests AC and LEG with the SCF to develop methodologies, and make recommendations for CMA 1 on reviewing the adequacy and effectiveness of adaptation and support. A. What information/data or metrics are needed for the review of adequacy and effectiveness of adaptation and support for adaptation? 34. The effectiveness of adaptation and adequacy of support are two different concepts and understanding both is essential for long-term climate finance. 35. Understanding the effectiveness to assess the impact of adaptation efforts and the required support is critical and in both cases a baseline is fundamental. Furthermore, historical data and clear indicators are key to enhance understanding and promote effective comparability. 36. However, current capacities in developing countries show that in the vast majority of cases, there are very important technical barriers to develop these baselines. One particular barrier is the managing of science-based data, as well as strategies to collect this data. This is the base to develop risk assessment and development of indicators. 37. In terms of adequacy, countries need to first quantify the costs of adaptation efforts and identify (and communicate) the needs to then compare this with the support received to understand the adequacy of the current support received. In addition, it would be useful to identify the resources that are included in projects from different sectors that could serve to enhance adaptation. a. The work some AILAC countries have done so far in this regard, has evidenced the insufficiency of the resources for adaptation and the need to significantly scale them up. b. This, however, should not lead to an exercise of comparison among countries, since the gaps in adequacy and effectiveness are built for specific national cases. 38. Quantification of support received for adaptation action is complex. Fortunately, national budgets are increasingly incorporating or labeling funding for adaptation and disaster risk reduction, and these public funds are already subject to budgetary oversight and scrutiny from National Authorities. 39. It is useful to recognize that the private sector has a major role to play to support adaptation action, and therefore it is critical that financial and non-financial disclosure from the private sector is aligned with the data and metrics the government is using to assess adequacy and effectiveness of adaptation. Nevertheless, there is no clear data on the resources the private sector provides nor of the resources that could come from it. 40. It would be relevant (yet could be costly) when analyzing the adaptation needs or costs of adaptation efforts, to estimate the costs of inaction to face a particular adaptation problem. 41. In terms of effectiveness of action it is crucial to bear in mind that there are long-term effects of adaptation efforts on the ground that will not be easily measurable in the short term, so models need to 5

6 include estimations and be transparent on their assumptions. It will also be relevant to develop trajectories that set milestones for the upcoming years. 42. Once the methodology to be used is chosen (according to local circumstances), indicators (ideally quantifiable) must be selected to facilitate the assessments of effectiveness of action. 43. Adequacy and effectiveness need to be measured with respect to a baseline or reference level. Internationally, referential baselines exist including those defined in United Nations or by multilateral agencies that have carried out impact assessments with quantified adaptation needs including by the World Bank or UNEP. 44. It is very challenging to establish a baseline with respect to impacts that in some cases have not been perceived steadily and that have high degrees of uncertainty and whose causes and impacts are mixed with other anthropogenic interventions. A manner of establishing a baseline is to estimate costs of inaction or of the risks of facing impacts of climate change without adaptation efforts. 45. A critical need of information to make progress in terms of understanding adequacy of support and effectiveness of action are assessments of risk to the impacts of climate change in the diverse economic, social and environmental sectors of countries. 46. To assess risk, it is necessary to identify required data and if data is not available the different strategies needed to develop the data. 47. Another need of information or data is the development of indicators. The development of indicators requires a lot of information, capacity to monitor and collaboration of different institutions that can gather and assess the indicators on a permanent basis. This will require, in many countries, the development of new capacities. It is also fundamental to revise the existing socio economic information across sectors related to adaptation. Both existing and new information will be key to the planning processes. In this regard, it is of the outmost importance that different initiatives and tracks of work under the UNFCCC interact; particularly, the Capacity Building Initiative for Transparency could play a crucial role 48. There are other factors that are measurable and are concrete such as institutional conditions, legal framework, policies, plans, programs, the development of scientific assessments of vulnerability and adaptation measures, instruments and information available to the public, information and dissemination of information, capacity building, level of participation of civil society in measures associated to adaptation. The aforementioned information could be measured for follow up and assessment. 49. Data and information could also be collected through consultations with vulnerable sectors on their perceived degrees of vulnerability and their adaptive capacity to face climate change impacts. 50. It is important to avoid creating complex metrics on adaptation effectiveness as a means to justify or control access to climate finance. Nevertheless, periodic reviews of action and policy reviews are needed in most countries, and adaptation should be no exception. Indicators of results and impacts to track progress of actions will be a key basis to understand effectiveness of action. B. Which lessons learned, good practices, challenges and barriers have been encountered in such reviews? 51. The global and particular reviews conducted so far present a high level of uncertainty and a wide range of estimates that do not necessarily contribute to solve the questions posed, in particular regarding finance for adaptation. 52. The reviews reveal the need to improve the quality of data and also the importance of having disaggregated data in order to be able to assess different projects and programmatic approaches, and compare and contrast them. 53. A good practice identified is to have and to strengthen institutional structures to deal with the whole project cycle and to set institutional and legal frameworks for adaptation action, including support. 54. To agree on which criteria, definitions and parameters are going to be taken into account to assess the adequacy and effectiveness of support for adaptation is a challenge. Nonetheless, there is an opportunity to think creatively and frame this challenge in a way that is useful for the global goal Parties have set. C. What methods can be used to review the adequacy and effectiveness of adaptation and support for adaptation? 6

7 55. Frameworks and tools to assess and implement monitoring and evaluation systems, taking into account the work already done by the Standing Committee on Finance and the subsidiary bodies under the UNFCCC. 56. Combination of instruments, qualitative and quantitative data, as well as backward and forward looking approaches. 57. Improve the guidelines for reporting financial information under the Convention. 58. Strengthen the interaction and coordination of different bodies under the Convention in the design and implementation of the enhanced transparency framework for the implementation of the Paris Agreement. 7