Three decades ago, renewable energy was considered too futuristic. The idea of plugging a car into a wall socket was unthinkable.
Today, both these things are a reality. And renewable energy is expected to attract $2.3 trillion in investment this year. The same will be true in the next phase of the world’s response to climate change for adaptation, said Luc Gnacadja, chair of the recently formed interim Executive Committee of the Adaptation Benefits Mechanism (ABM).
“ABM is groundbreaking. The continent where ABM should start is rightfully Africa, because it has the highest vulnerability, the poorest communities and the most development challenges, while having benefitted least from climate finance. I hope that COP 25 recognizes its importance and gives it a place in the implementation of the Paris Agreement as the only cooperative approach for adaptation proposed so far,” Gnacadja told delegates at the COP 25 climate conference in Madrid.
The ABM aims to mobilize public and private sector finance to assist developing countries with meeting climate change needs for adaptation set out in their Nationally Determined Contributions (NDCs) under the Paris Agreement, in particular those requiring international cooperation.
“The design of the ABM methodologies and theory of change must be welcoming for SMEs and micro enterprises. Despite the focus on Africa, the ABM EC will seriously consider opening its services to the rest of the world during the pilot phase, as there is already interest from other regions and ABM is potentially applicable in all countries,” Gnacadja said.
The African Development Bank established the interim Executive Committee of the ABM on 4 October. The ABM Executive Committee had adopted an ambitious work plan for 2020, prioritizing guidance on methodologies to determine adaptation benefits and incremental costs of ABM projects.
“Giving monetary value to adaptation will go a long way to crowding in investments that will increasingly build resilience in least developed countries and small island developing states in Africa,” said Anthony Nyong, Director for Climate Change and Green Growth after the session.
The African Development Bank’s financing for climate mitigation and adaptation action reached parity in 2018, a first among development finance institutions. This demonstrates client responsiveness to adaptation investments when incentives are right, he added.