Call for a Pilot Program for Market-Based Adaptation Funding

Abstract

Anthropogenic, or human-caused, climate change threatens to impose tremendous damage on countries that lack the resources to adequately adapt. Although climate change mitigation has been the primary focus of environmental policy work and institutions, developing countries need a better system for funding adaptation to climate change to prepare for environmental changes.

This Note proposes a pilot program, the Adaptation and Development Mechanism Pilot Program (“ADMPP”), for including adaptation in the already existent Kyoto carbon market, which will result in raising private money to fund adaptation. Funding urgently needed climate change adaptation projects in developing countries would generate emissions allowances, which could then be counted toward emissions reduction quotas or sold in the carbon market. In many ways, this program would be analogous to the Kyoto Protocol’s Clean Development Mechanism (“CDM”), a program through which firms generate tradable emissions allowances by funding emissions reductions in developing countries. The program would differ, however, in that projects would be awarded through a reverse auction, which would make the program a true market mechanism and would maximize the goals of cost effectiveness, distributional equity, and political economy.

Keywords: adaptation, climate change, market mechanism, kyoto, development, carbon, clean development mechanism