Korea’s Submission on

“How the Adaptation Fund should serve the Paris Agreement”

  1. General Direction

The submission needs to clarify various technical and legal issues to find ways for the Adaptation Fund to serve the Paris Agreement. It has its objectives in facilitating the completion of the APA work programme.This submission will lay out the key issues that need to be resolved by categories of a) Governance and Institutional Arrangements, b) Safeguards, and c) Operating Modalities, as is the structure of the CMA 1 decision.

  1. Key Questions/Elements

(a)Governance and Institutional Arrangements

The AF, as a fund established under the Kyoto Protocol, needs to undergo changes in its legal status and basic governance structure to serve the Paris Agreement. In particular, for the basis of the AF operation, it is of great importance to review whether changes need to be made in the composition of the board, which is the decision-making body of the fund, and develop plans for improvements accordingly.

Would the Fund have to be legally shifted from the Kyoto Protocol to the PA? If so, under what process could itbe shifted? (ex. joint decision by CMP and CMA, then approval by the COP?)

If it were to be shifted from Kyoto Protocol to the PA, which body could provide guidance to the AF?

Would the AF Board have to be established under the PA?

Would there have to be changes in decisions on functions of the AF Board, membership, decision-making, quorum, chairmanship, frequency of meetings, and secretariat? If so, how could they be improved?

Which Parties should be supported by the AF?

Which institution should serve as the trustee for the AF?

(b)Safeguards

It is essential that the AF will have safeguards in place which will be fit for purpose and ensure the highest possible impact while avoiding any negative environmental or social effects. How can the existing environmental and social safeguards be improved to fit for purpose and whether thereis any room for improvement?

(c)Operating Modalities

The AF could only serve the PA with a sustainable resource mobilization strategy in the long term. Therefore, this is an important issue that should be addressed. In the past, the AF was sourced by a 2% share of proceeds from the CDM. There is an urgent need to prepare against the abolition of the CDM or an establishment of a new market mechanism. Should the fund continue to be sourced by a share of proceeds from market mechanisms? If so, there needs to be an agreement on the details of the method to ensure a sustainable funding source.

How could the AF mobilize resources in a sustainable manner?

For the AF to serve the PA, it is necessary to analyze the current operating modalities and identify ways to make its modalities more efficient. Parties will have to assess how the operating modalities may haveto be adjusted to ensure the highest possible effectiveness and impact of AF projects and programs. First and foremost a sustainable and innovative resource mobilization modality will have to be established.In addition, the efficiency of the institutional and legal operating mechanisms shouldbe assessed.

How will the operating modalities need to be adjusted to ensure the highest possible effectiveness and impact of AF projects and programs?

－(Operating Entities) Is the current 25 National Entities sufficient? Is there a need for an institutional tool to increase the number of National Entities, considering the focus on country ownership?

－(Financing Window) Is there a need to increase the number of financing windows? If so, in what way could it be increased and how could the existing windows be reorganized?

－(Sub-groups) Should the AF maintain the current sub-groups including committees and the accreditation panel of implementing entities? Is there a need to establish new committees or make changes to the accreditation panel (currently, 4 external experts and 2 board members)?

  1. Timeline

Considering the complexity and the vast amount of issues that need to be addressed, the decisions to the above questions should be made in careful consideration over sufficient time.

Therefore, it is appropriate to tacklethe above questions in conjunction with the performance of the APA work programme, and make progress in discussions considering its alignment with APA discussions and finish their considerations at the earliest in 2018.