FUNDING SCHEME FOR THE BALI ACTION PLANA Swiss proposal for global solidarity in financing Adaptation

PLAN OF THE PRESENTATION

1. SITUATION2. OBJECTIVES AND PRINCIPLES3. FUNDING SCHEME4. IMPLEMENTATION AND GOVERNANCE5. ADDITIONAL WORK

Climate change (CC) consequences already visible (AR4)

Adaptation to the adverse effects of CC taking place now must be addressed

Financing Adaptation will require USD 10-40 bn per year (WB)

Adaptation Fund expected to provide USD 300-450 million until 2012

Adaptation capacity unevenly distributed across and within countries

A FUNDING SCHEME IS PROPOSED

FUNDING SCHEME FOR THE BALI ACTION PLANA Swiss proposal for global solidarity in financing Adaptation

1. SITUATION

FUNDING SCHEME FOR THE BALI ACTION PLANA Swiss proposal for global solidarity in financing Adaptation

2. OBJECTIVES AND PRINCIPLES

To levy the necessary funding for Adaptation by taxing CO2 emissions

To tax emissions in all the countries above a « basic need oriented threshold »

To establish a National CC Fund (NCCF) in each country

To establish a Multilateral Adaptation Fund (MAF)

Principle of common but differentiated responsibilites

Polluter pays principle

Principle of subsidiarity

FUNDING SCHEME FOR THE BALI ACTION PLANA Swiss proposal for global solidarity in financing Adaptation

3. FUNDING SCHEME

This scheme is an illustration of one possibility of the concept :

Tax rate : USD 2 per ton of CO2 emissions

Threshold : yearly emissions up to 1.5 ton of CO2eq per capita

The higher the income per capita, the higher the share of revenues to the MAF

The lower the income per capita, the higher the share of revenues to the NCCF

MAF to have a risk prevention pillar and a risk insurance pillar

MAF funds to be distributed to medium and low income countries

FUNDING SCHEME FOR THE BALI ACTION PLANA Swiss proposal for global solidarity in financing Adaptation

3. NATIONAL CLIMATE CHANGE FUNDS (NCCF)

Each country will autonomously operate its own NCCF

NCCF ressources are allocated according to the priorities set by the country

Disaster risk reduction programmes under NCCF can be co-financed by MAF

FUNDING SCHEME FOR THE BALI ACTION PLANA Swiss proposal for global solidarity in financing Adaptation

3. MAF – PREVENTION PILLAR

Objective: provide incentives and support for the integration of Adaptation

policies as an integral part of national and sectoral plans.

3. MAF – INSURANCE PILLAR

Objective: preserving/restoring public goods in case of severe weather events

related to climate change.

FUNDING SCHEME FOR THE BALI ACTION PLANA Swiss proposal for global solidarity in financing Adaptation

4. IMPLEMENTATION AND GOVERNANCE

Collection of the levy defined by each country, building on its taxation system

Scheme reduces the risk of moral hazard (prevention and insurance linked)

Allow countries to prepare legislation and fiscal reforms

Involve actors from the private sector (insurance pillar especially)

FUNDING SCHEME FOR THE BALI ACTION PLANA Swiss proposal for global solidarity in financing Adaptation

5. ADDITIONAL WORK

How to best integrate the proposed scheme into the negociation process ?

How to attract sufficient support to justify a comprehensive assessment ?

How to allocate the MAF ressources to the beneficiaries (indicators) ?

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