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Preparing the ground for adaptation

1.4 What financial support is available for adaptation?

Funding limitations is a reason often cited as a barrier to initiating and implementing adaptation action. However, adaptation funding can be combined from various sources and a good knowledge of available funding opportunities is important for overcoming this barrier. Mainstreaming into existing planning processes with their own existing budgets is also an important option to consider.

 

Adaptation funding on the municipal level is available through several EU funding instruments, some national, regional and local funds, as well as from some international financing institutions, and private donor organisations.

Moreover, adaptation-relevant funding can be obtained through other sectoral funding mechanisms, in which case it may not necessarily be labelled as ‘funding for adaptation', however, may still contribute to adaptation policy aims.

Flexibility and a combination of various funding sources are advisable, especially in cases where dedicated municipal budget lines may be hard to secure.

Furthermore, tapping into non-monetary support (See Q0.6 Where can I find support for adaptation planning in the form of advice and capacity building?) can relieve the pressure on funding requirements.

For urban areas the following funding lines have been identified:

  • Adaptation to climate change is one of the LIFE 2014-2020 calls for Action Grants priority areas. The programme provides up to 60% co-financing for best practice, pilot and demonstration projects that contribute to supporting efforts leading to increased resilience to climate change.
  • Horizon 2020, the EU's programme for research and innovation, aims to allocate 35% of its budget to climate-related research expenditure. It also requires end-user and stakeholder involvement, which opens the doors for city involvement.
  • Adaptation funding can also be supplemented by grants from such financial institutions and grant providers as the European Investment Bank or the European Bank for Reconstruction and Development.
  • Adaptation to climate change is mainstreamed throughout various sectoral EU funding instruments. Those include the CAP (mainly the European Agricultural Fund for Rural Development); the Cohesion fund; the European Regional Development Fund (particularly through INTERREG), the European Social Fund; and the European Maritime and Fisheries Fund.
  • National and sub-national funding: On the national and sub-national levels funding may be available both for adaptation planning and implementation, awareness and capacity building or research.
  • Private funding donors: In some cases private funding organisations support adaption in urban areas. For example, the Rockefeller Foundation has launched the 100 Resilient Cities Challenge. The chosen cities receive technical support and resources to improve their urban resilience over three years.
  • Private sector funding: Private sector is an important stakeholder in adaptation to climate change risks, with high motivation for adaptation action. Private sector adaptation action is driven by: a) value protection motives when private actors seek to protect their assets and supply chains, b) value creation opportunities when the private sector seeks to provide adaptation solutions as business opportunities.
    Local governments are, therefore, encouraged to seek cooperation with private sector (such as through public-private partnerships) to leverage the private sector funding.
  • The combination of municipal and private sector funding can be used to develop own city funds for adaptation, such as proKIima fund in Hannover region.
  • Furthermore, the insurance sector is an important private sector player that can provide incentives for businesses and households for investing in climate resilience.

 

Information about the aforementioned funding opportunities can also be found on the Mayors Adapt and Covenant of Mayors for Climate & Energy websites as well as the funding section of Climate-ADAPT.

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