Isra-Mart srl:Adaptation Fund jostles for position at Cancun talks

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A UN fund set up under the Kyoto Protocol could become one of the main mechanisms for distributing climate adaptation funding as part of a new international deal, according to the chairman of the fund.

Farrukh Iqbal Khan, a senior Pakistan official, told news agency Reuters that support was building for proposals that would see the UN's existing Adaptation Fund manage some of the $100bn (£62.7bn) a year of climate financing that has been pledged as part of the Copenhagen Accord.

Proposals on how to raise and manage climate financing to help poorer nations cope with the impacts of climate change are expected to be central to the upcoming UN negotiations in Cancun, Mexico, and Khan said that many developing countries would like to see the Adaptation Fund pay a central role.

"The Adaptation Fund has grown after a great deal of effort over many years... it is up and running and is an independent, international entity," Khan told Reuters in a telephone interview. "Developing countries are very clear – it could be the main adaptation window in the larger financial mechanism attached to the global green fund."

The Adaptation Fund announced its first deal last week, awarding $8.6m to a project in Senegal to fight coastal erosion, and it is expected to raise $450m by 2012 through a two per cent levy on UN-approved emission reduction projects in developing countries.

However, proposals to expand the Adaptation Fund so that it can draw on funds raised through proposed new mechanisms, such as a levy on aviation or shipping, are likely to face opposition from some countries.

A number of industrialised nations have reportedly voiced concerns that they are under-represented on the Adaptation Fund's board, about two thirds of which come from developing countries. Meanwhile, the fact the fund was set up under the Kyoto Protocol, which the US has not ratified, could also limit the role it can play in any new treaty.

In addition, the US and some other industrialised nations would like to see the World Bank play a central role in distributing climate financing, despite fierce opposition from developing countries who fear much of the funding will only be made available as loans.