Devolved Finance DIIS Report 2022 02

DIIS REPORT 2022: 02
DEVOLVED FINANCE AND GOVERNANCE

OF CLIMATE CHANGE ADAPTATION
Esbern Friis-Hansen, Lily Salloum Lindegaard,

Marie Gravesen and Mikkel Funder
This report is written by Esbern Friis-Hansen, senior researcher, DIIS,
Lily Salloum Lindegaard, researcher, DIIS, Marie Gravesen, researcher, DIIS,
Mikkel Funder, senior researcher, DIIS, with contributions from Lasse Pinderup,
research assistant, DIIS, and published by DIIS.
DIIS · Danish Institute for International Studies.

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© Copenhagen 2022, the authors and DIIS.
TABLE OF CONTENTS.
Abstract. 4.
Abbreviations. 7.
Devolved adaptation finance and governance. 9.

Why devolved adaptation? 11.
Status of climate change adaptation finance. 13.
Drivers of devolved adaptation finance and governance. 17.

Who’s agenda? 18.
Categories of actors and devolved adaptation models. 18.
Governance of devolved adaptation finance. 25.

Seven governance considerations for devolved adaptation. 27.
Models of devolved adaptation finance and governance. 35.

Pilot programmes for climate resilience, Zambia. 36.
Adaptation learning programme, Ghana. 38.
Local climate adaptive living, Mozambique. 40.
County climate change fund, Kenya. 42.
Danish support for devolved adaptation finance. 47.

Approach and data. 48.
Key findings. 51.
Governance considerations and Danish adaptation support. 58.
Ways forward. 61.
Notes. 65.
References. 66.
Annex 1. Methodology used by IIED, CPI and IFAD to estimate 72.

proportion of devolved finance for climate change adaptation.
Annex 2. Notes on methodology for the assessment of 73.

Danish adaptation finance.
3
ABSTRACT.
Since the Paris Agreement in 2015, adaptation debates have increasingly shifted
from focusing narrowly on finance to considerations around governance of
programming, implementation and impact of support for climate change mitigation
and adaptation. The character of finance for climate change adaptation and
debates around it are currently in a time of potentially significant transition. Much
focus of UNCC Conference of the Parties (COP) negotiations has been on agreeing
on a common rulebook and on ensuring Global South access to finance for climate
change action. These goals have now largely been reached and international
attention is shifting to how and at what scale climate change actions take place and
are governed. Most of the finance for climate change adaptation is currently used
and governed at international and national levels. That being said, new international
agendas and forms of cooperation are emerging with enhanced focus on devolved
finance and governance of climate change adaptation. This report presents an
overview of the state of climate change adaptation finance, with focus on devolved
governance and use in Least Developed Countries (LDC).
This study illustrates the highly skewed character of how finance is shared between
mitigation and adaptation and between middle-income countries and LDCs. It
further addresses where finance for climate change adaptation is spent, who
decides what type of adaptive action is financed and points to the challenge of
devolved finance and governance of climate change adaptation in LDCs. What is
lacking, however, is robust national level data on domestic use of adaptation finance,
i.e. trustworthy data on whether finance for adaptation is used at the central ministry
level or devolved to sub-national levels.
This report identifies and discusses four categories of actors that each in their own
way advances the agenda for devolved finance and governance of climate change
adaptation. First, a few influential international policy think tanks have spearheaded
locally-led adaptation within international climate diplomacy, since 2017 under the
umbrella of Global Commission on Adaptation (GCA). Secondly, the World Bank,
through its Pilot Programmes for Climate Resilience (PPCR), has initiated devolved
adaptation financing programmes, drawing on its past experience with performance
based service provision. Thirdly, international and national civil society organisations
have contributed to the advancement of the devolved finance for climate change
4 DEVOLVED FINANCE AND GOVERNANCE OF CLIMATE CHANGE ADAPTATION

agenda through their community-based project-centred support. Finally, devolution
has gained political momentum from national governments with elaborate national
climate change adaptation policies and strategies.
Few systematic empirical studies have focused on the political economy of climate
change adaptation at the local government level and fieldwork-based research is
needed to fill this knowledge gap. Drawing on development literature and inspired by
the local led adaptation principles, the study identifies and discusses seven
governance aspects that are important for successful climate change adaptation at
sub-national levels, namely: 1) subsidiarity; 2) integration in local government
planning and decision-making; 3) spaces for public deliberation and participation; 4)
devolution of decision-making over climate change; 5) decision-making informed by
local knowledge and knowledge needs; 6) predictability of financial flows; and 7)
supportive national policy environment.
This report uses these governance aspects to assess four promising models
supported by international development agencies that aim to lay the foundation for
devolved finance and governance of climate change adaptation. For three of the
models (PPCR in Zambia, ALP in Ghana and CCCF in Kenya) the assessment is
based on field visits, while assessment of the fourth model (LoCAL in Mozambique)
is based on secondary literature only. It should be stressed that further research is
clearly needed to provide a clearer and deeper understanding, including that of the
political economy of local government implementation of climate change adaptation
support.
Based on these assessments, this report seeks to draw conclusions and perspectives
regarding the strengths and shortcomings of the models. The analysis reveals and
proposes explanations for similarities as well as differences between the models.
For example, LoCAL in Mozambique and CCCF in Kenya score high in terms of
integration in local government planning and decision-making. The likely explanation
is that these models most clearly take their point of departure in existing local
government political and administrative institutions. Another example is ALP in
Ghana, which is clearly better at creating and using sub-local government spaces
for public deliberation and participation. The likely explanation is that this programme
is facilitated by an NGO.
DEVOLVED FINANCE AND GOVERNANCE OF CLIMATE CHANGE ADAPTATION 5

Finally, this report examines devolution within Danish adaptation financing as a
case of how donors might approach decentralisation in their adaptation
commitments and programmes. Recently, adaptation has received greater
emphasis in Danish climate finance. The new international development strategy
‘The World We Share’ emphasises climate as one of three main focus areas, with
specific goals for adaptation. Denmark’s engagement in adaptation will, therefore,
likely increase significantly in the coming years. The report ends with a brief
discussion of the way forward and the presentation of recommendations for donor
support to decentralised climate change adaptation.

ABBREVIATIONS.
CCCF. County Climate Change Fund .
CIDP. County Integrated Development Plans .
CIF. Climate Investment Funds.
COP. Conference of the Parties .
CPI. Climate Policy Initiative.
CSO. Civil Society Organisation.
DANIDA. Danish International Development Agency .
FFU. Consultative Research Committee for Development Research.
GCA. Global Commission on Adaptation.
GCF. Green Climate Fund.
ICF. International Climate Fund.
IDS. Institute of Development Studies.
IFAD. International Fund for Agricultural Development.
IIED. International Institute for Environment and Development.
INGO. International Non-Governmental Organisation.
IPCC. Intergovernmental Panel on Climate Change.
LDC. Least Developed Countries.
LoCAL. Local Climate Adaptive Living.
NABARD. The National Bank for Rural Development and Agriculture.
NAFCC. National Adaptation Fund for Climate Change.
NAP. National Action Plan.
NAPCC. National Action Plan on Climate Change .
NGO. Non-Governmental Organisation .
ODA. Official Development Assistance .
ODI. Overseas Development Institute.
OECD DAC. Organisation for Economic Cooperation and Development’s
Development Assistance Committee.
REDD+. Reducing Emissions from Deforestation and Forest Degradation in
Developing Countries.
PPCR. Pilot Programmes for Climate Resilience.
SAPCC. State Action Plan on Climate Change.
UNCDF. United Nations Capital Development Fund.
UNFCCC. United Nations Framework Convention on Climate Change.
WRI. World Resources Institute.

DEVOLVED ADAPTATION FINANCE
AND GOVERNANCE

Climate change adaptation has received heightened attention in recent years as
climate change intensifies across the globe. Impacts on societies and up to COP15
and the Paris Agreement in 2015, the overwhelming focus in adaptation diplomacy
was on securing financial commitments to adaptation. Only subsequently has the
international climate response entered ‘a new era of adaptation implementation’
(Adaptation Watch, 2017:5), where international climate funds, governments and
other adaptation actors seek to transform the billions of dollars being channelled
to adaptation into outcomes on the ground. However, recent policy reports
indicate that this crucial transition of finance to implementation is threatened by the
highly centralised governance of international mechanisms for financing climate
change adaptation. These reports call for more attention to how finance for climate
change adaptation is governed and the scale at which it is used, and for enhanced
adaptive capacity at national and sub-national levels (Adaptation Watch, 2017;
Intergovernmental Panel on Climate Change (IPCC), 2018; International Institute for
Environment and Development (IIED), 2018; Overseas Development Institute (ODI),
2018; World Resources Institute (WRI), 2019; Global Commission on Adaptation
(GCA), 2019).
As funding and implementation surge, it will be crucial to

integrate devolved adaptation finance and governance for
successful adaptation action.
Attention to sub-national levels is noticeably emerging as a key aspect of ensuring

effective adaptation implementation. This reflects the realities of climate responses.
Climate change impacts are highly localised as they are dependent on the interplay
between changing climatic, environmental and socio-economic conditions on the
ground. Sub-national actors, such as municipalities and districts, are often best
situated to formulate and implement adaptation interventions addressing such
localised factors. There is, therefore, wide agreement among researchers that
devolved adaptation – adaptation that takes place at sub-national levels – enables
solutions and responses to be better tailored to local conditions.
Recognition of the significance of devolved adaptation comes in the midst of a shift

in international climate finance towards adaptation. The last several years have
seen calls for a balance in funding to adaptation and mitigation (Paris Agreement),
a call from least developed countries for funding to sub-national levels (Vision,

2050), record-breaking pledges to adaptation at COP26, and proposals for marked
increases in adaptation finance going forward. Despite rich countries’ failure to
mobilise USD 100 billion a year in climate finance by 2020, financing continues to
increase, with a growing portion channelled to adaptation. As funding and
implementation surge, it will be crucial to integrate devolved adaptation finance and
governance for successful adaptation action. This report, therefore, provides an
introduction to devolved adaptation finance and governance, as well as the status
of current efforts.
We first explore the benefits of devolved adaptation finance and governance and
gives a brief overview of current devolved adaptation finance. Next we presents an
overview of the current landscape of devolved adaptation finance and governance
efforts, outlining main drivers of devolved finance and governance with focus on key
actors and their differing approaches. We then focuses explicitly on the governance
of devolved adaptation, proposing seven factors that can be used to operationalise
and evaluate devolved adaptation governance. These factors are then used to
analyse existing models of devolved adaptation finance and governance. Thereafter
we take a donor perspective using the case of Denmark. It illustrates how devolution
can be assessed within donors’ adaptation commitments, despite limited available
information on sub-national adaptation finance. Finally, the report provides
recommendations for ways forward in devolved adaptation finance and governance.
WHY DEVOLVED ADAPTATION?
As noted above, climate change hazards are highly localised. The same climate
variation will have different impacts in different environmental settings, e.g. the
same reduction in rainfall will have different implications in a temperate versus arid
area. Climate change impacts are also highly dependent on local socio-economic
conditions, such as economic activities, infrastructure, demographics, etc. For
instance, an arid area with irrigation may be less affected by rainfall variation than
one without; while one agricultural area might be less affected than another
agricultural area. Take rural Africans who depend on natural resource management
for their livelihood. A recent World Bank report identifies them as most exposed to
climate change hazards and most likely to fall into poverty because of low adaptive
capacity (Hallegatte et al., 2016). Poorly serviced parts of the urban populations are
also at risk (Filho et al., 2018). Yet, African rural natural resource managers are

highly heterogeneous, and so are the necessary adaptation responses. It is,
therefore, essential that adaptation interventions are tailored to local contexts, and
devolving adaptation to sub-national levels is the main way of doing this.
Research points to two key aspects of devolved adaptation: devolved finance and
devolved governance. The first merely ensures that funding reaches lower
administrative levels, closer to the affected populations on the ground. The second
aspect, devolved governance of adaptation finance, is also crucial, but has received
less attention. Devolved adaptation governance allows decision-making to take
place in the districts and communities affected, rather than at higher administrative
levels. Evidence suggests that localising the way we plan, finance and deliver
climate, nature and poverty solutions will not only result in more just solutions
because of proximity to those most affected and with the least voice, but also
‘deliver more integrated, context specific, agile, efficient, democratic and accountable
solutions to and for the poorest and most excluded people’ (Soanes et al., 2020). In
the recent Evaluation of Danish Support to Climate Change Adaptation (2020),
devolved adaptation was shown to improve outcomes for marginalised and
vulnerable groups, who are often most affected by climate change. Overall, devolved
adaptation finance and governance enables local input and accountability,
supporting locally-relevant interventions that can better address needs on the
ground. This effectively makes adaptation efforts more sustainable and cost-
effective by contributing more directly to creating resilient communities (Fedele et
al., 2019; Funder et al., 2020; Friis-Hansen, 2017; IIED, 2017; Taylor, 2015; Caldecott,
2021). Cost- effectiveness is in itself a key consideration in a situation of increasing
need and limited funding. While devolution does not guarantee improved outcomes,
it is a crucial foundation for more effective, relevant and inclusive adaptation efforts.
However, despite the importance of sub-national actors being recognised in

international climate policy, they are not necessarily active in adaptation or
supported by international adaptation mechanisms. The IPCC, for instance,
emphasises the importance of sub-national actors such as cities and local
governments in their ‘whole of government approach’ for fostering climate action
(OECD, 2006; IPCC, 2018). While some urban local governments are highly active
and influential in adaptation responses, for instance through city networks such as
C40 Cities, many rural local governments are less so. Sub-national rural institutions
in Africa, for instance, in many cases experience a disconnect between climate
change adaptation needs among poor residents dependent on environmental
livelihoods and access to international finance for climate change adaptation.

Furthermore, despite the significance of devolved adaptation finance and
governance for outcomes, devolved climate change adaptation is not widely
practised. Studies conducted on the topic indicate that in LDCs only a small
proportion of climate change finance, including adaptation finance, is disbursed at
the sub-national levels in the least developed countries (Soanes et al., 2000b;
Soanes 2021a). This is within funding flows that are themselves grossly inadequate
to address current and future adaptation needs in LDCs (Puig et al., 2016; UNEP et
al., 2020).
STATUS OF CLIMATE CHANGE ADAPTATION FINANCE.
The most recent report on the provision of climate finance towards the United
Nations Framework Convention on Climate Change (UNFCCC) target of USD 100
billion annually by 2020 is provided by the OECD1. The overview shows that climate
finance provided to developing countries reached USD 78.9 billion in 2018, up from
USD 71.2 billion in 2017, see Figure 1. This was primarily provided by bilateral public
finance and multilateral public finance attributable to developed countries (USD
62.2 billion) — also called public climate finance — while the rest was provided
through export credits and private mobilised funding.
Figure 1. Climate finance provided and mobilised (USD millions)
100
90
80
70
60
50
40
30
20
10
0
2013 2014 2015 2016 2017 2018
Bilateral public Multilateral public Export credits Mobilised private

(attributed) (attributed)
LDC adaptation funding Total LDC funding
Source: Climate finance provided and mobilised 2013-2018 (OECD, 2020) in USD millions (accessed from
https://www.oecd.org/environment/cc/Key-Highlights-Climate-Finance-Provided-and-Mobilised-by-Devel-
oped-Countries-in-2013-18.pdf ).

We can estimate that in 2018 about USD 4.8 billion was used
for climate change adaptation in the LDCs. What is much more
uncertain is the proportion of these funds that was devolved to
the sub-national levels of governance.
The Copenhagen Accord and the subsequent Paris Agreement agreed to provide
funds ‘balanced’ between mitigation and adaptation while having a specific focus
on the LDCs and Small Island Developing States. While the term ‘balance’ is
contested, the most commonly used definition is a 50/50 split between mitigation
and adaptation. Of the USD 78.9 billion climate finance in 2018 only 21% was
targeting adaptation while 70% targeted mitigation and 9% cross-cutting (OECD,
2020). Danish international commitments to climate change were closer to meeting
the 50/50 balance with 21% for adaptation, 25% for mitigation and 54% for cross-
cutting projects from 2013 to 2017, though it is unclear to what extent cross-cutting
commitments achieved a balance between adaptation and mitigation (Funder et al.,
2020).
IIED reports the share of climate finance which reaches the local
level to be 10%. This figure has been referred to by many, most
recently in the new Oxfam Shadow Report2, but is in fact a very
rough estimate based on only 7% of climate change finance
between 2003 and 2016, that was channelled exclusively
through International Climate Funds.
In addition, the UNFCCC goal of prioritising the Most Vulnerable Parties (LDCs and
Small Island Developing States) in adaptation finance is far from being met. Instead,
84% of global climate finance was invested in middle-income countries (and
unallocated investments) in 2018, while only 15% of the financing was channelled to
the LDCs, together amounting to USD 12 billion (OECD, 2020). This imbalance is an
effect of the fact that 70% of total climate finance is allocated to mitigation (as
mentioned above) and that this primarily goes to middle-income countries. The
significant global imbalance between adaptation and mitigation financing is,
however, less evident in funding to Most Vulnerable Parties. In 2018, 41% of finance
to LDCs was focused on adaptation objectives, representing 6% of total climate
change finance (OECD, 2020).

Robust national level data on whether adaptation finance was used at the central
ministry level or devolved to sub-national levels is not generally available. Based on
the above analysis of OECD data, we can estimate that in 2018 about USD 4.8 billion
was used for climate change adaptation in the LDCs. What is much more uncertain
is the proportion of these funds that was devolved to the sub-national levels of
governance. While discussions on devolved finance for climate change adaptation
have been gaining increasing traction, actual figures on commitments or
disbursements of such funding are very limited. This reflects the fact that the two
main climate finance tracking systems (common principles used by Multilateral
Development Banks and Rio markers used by bilateral development organisations)
do not monitor where finance for climate change adaptation is spent below the
nation state (recipient). Organisation for Economic Cooperation and Development’s
Development Assistance Committee (OECD DAC) data includes some additional
information on ‘channel of delivery’ which describes the initial recipient (central
government, public corporation, developing country Non-Governmental Organisation
(NGO), university, etc.) but gives no information on in-country on-lending, for
instance from the central government to sub-national levels.
IIED reports the share of climate finance which reaches the local level to be 10%.
This figure has been referred to by many, most recently in the new Oxfam Shadow
Report2, but is in fact a very rough estimate based on only 7% of climate change
finance between 2003 and 2016, that was channelled exclusively through
International Climate Funds. It is, therefore, not representative of total climate
finance flows. (See Annex 1 for a detailed discussion of methodology used by
IIED, Climate Policy Initiative (CPI) and International Fund for Agricultural
Development (IFAD) to estimate devolved climate finance.) IIED notes that this
figure is indicative, at best, of the small proportion of international climate funds
within total climate finance and that this is due to a lack of relevant data and
in-depth analysis of all project documents reviewed. Despite this, the figure has
been widely used in reference to climate finance generally, without acknowledgement
of its methodological limitations. The 10% figure should therefore be used with
caution. While it gives an indication of limited devolved funding within a subset of
climate finance, it does not provide a sound basis for claims on the overall climate
finance landscape or for broader policy recommendations.

DRIVERS OF DEVOLVED ADAPTATION
FINANCE AND GOVERNANCE

WHO’S AGENDA?
Over the past five years, there has been a shift in focus among actors involved with
climate change adaptation. In particular, during the past two to three years, the
overarching focus on access to additional finance has broadened, with increased
focus on process of implementation, including issues of governance, accountability,
sustainability and cost-effectiveness (Global Commission on Adaptation, 2019).
Research points to the importance of establishing systems for the transfer of

funds and decision-making from national to local scales of governance that build
on transparency, participation and accountability (Robertson, 2015). To enable
financial transfers to local institutions, such principles need to be aligned with
existing decision-making processes of public planning and budgeting developed by
national governance institutions. This can take many forms in practise. Approaches
to devolved climate finance can differ in terms of their institutional anchoring and
accountability as well as in sub-national governments’ actual influence in decision-
making and control over finance and implementation. The various approaches to
devolved climate finance are also driven by existing institutional arrangements as
well as vested interests, and this has given rise to competing ideas of to how
devolved climate finance should best take shape.
Next, we have identified four broad categories of actors that, each in their own way,
contribute to developing a model for devolved finance and governance of climate
change adaptation. These include influential international policy think tanks,
Multilateral Development Banks, international and national civil society organisations
and national governments. Below, we outline each category of actor and the
approach they put forward.
CATEGORIES OF ACTORS AND DEVOLVED ADAPTATION MODELS.
A small number of influential international policy think tanks, including IIED, WRI,
ODI and GCA, have carried out policy studies on climate change adaptation
commissioned by development organisations. In consultation with stakeholders
within international development organisations and NGOs, and since 2017 under
the umbrella of Global Commission on Adaptation, these organisations have sought
to merge lessons from development cooperation with climate change adaptation.
This process culminated in 2020 with the definition of Locally Led Adaptation as
action planned to address the direct and indirect impacts of climate change that is

decided by local actors (e.g. community-based organisations, citizens groups, local/
municipal government and local private sector) rather than being decided exclusively
at higher levels. Eight principles for Locally Led Adaptation were developed by the
Global Commission for Adaptation and formally accepted at the Climate Adaptation
Summit on 25 January 2021. The proposed principles draw on good practise
lessons from development cooperation, with emphasis on devolution of finance and
decision-making based on a principle of subsidiarity, capacity of meso-level
institutions for inclusive governance and project implementation, flexibility in
planning relate to risk, and donor coordination (WRI, 2020; Patel et al., 2020). This is
not simply because benefits accrue at the local level, but so that local people and
their communities have agency over how their development and climate adaptation
take place (Tye et al., 2020).
The Multilateral Development Banks have also been initiators of devolved adaptation
financing programmes. The Pilot Programmes for Climate Resilience (PPCRs), a
suite of national climate change adaptation programmes funded via the global
Climate Investment Funds (CIF), with approximately USD 1.2 billion so far allocated
in loans and grants to adaptation activities in 28 developing countries, are particularly
noteworthy. The funds are sourced from 14 donors — including Denmark — and
managed by the World Bank with additional support from the regional development
banks. The PPCRs have two overall aims:
■ to support specific national and local climate change adaptation activities .
■ to strengthen climate responsive development planning at national and sub-

national levels. A key feature of the latter is the mainstreaming of climate change
adaptation into development planning, and — in some countries — support of
frameworks for harmonisation and coordination of climate finance at national
and sub-national levels .
For the past 10 years, international and national civil society organisations, such as
Care International, DanChurchAid and Oxfam Ibis, have approached climate change
adaptation in a project-centred fashion, addressing bottom-up initiatives for climate
change adaptation rather than necessarily pushing for structural changes to
enhance decentralised financial flows and decision-making (Care International,
2014; Oxfam International, 2010).

Finally, a small group of national governments with elaborate national climate
change adaptation policies and strategies is also driving the agenda of devolved
finance and governance of climate change adaptation. The group includes Kenya
with its County Climate Change Fund and India’s implementation of the National
Adaptation Fund for Climate Change. The latter is illustrated in Box 1 below.
BOX 1. INDIA’S NATIONAL ACTION PLAN ON CLIMATE CHANGE.
In 2008, the Government of India formulated the National Action Plan on Climate
Change (NAPCC) which emphasises adaptation to climate change impacts within
eight determined missions.3 Following the NAPCC objectives, India’s individual state
governments have each prepared a State Action Plan on Climate Change (SAPCC).
The SAPCCs are divided into sector foci4 to enable national financial support to state
level adaptation activities. In 2015, the National Adaptation Fund for Climate Change
(NAFCC) was set up as India’s National Implementing Entity for the Adaptation Fund
under the Kyoto Protocol to scale-up adaptation finance for interventions at the sub-
national state. The NAFCC supports concrete state-driven adaptation projects that are
not covered through other national programmes and which must aim to build resilience
within SAPCC sectors and NAPCC mission areas in vulnerable states. The NAFCC can,
for instance, fund mainstreaming of technological innovations. The National Bank for
Rural Development and Agriculture (NABARD) was organised to be Implementing Entity
for agriculture on behalf of NAFCC. With this role, the NABARD is responsible for a
long list of activities along the flow of adaptation finance, including the identification
and formulation of projects from SAPCCs, appraisal and disbursement, monitoring
and evaluation of stakeholders and state governments, and overall mainstreaming
of the implemented projects (NABARD, 2020). As executing entities, Ministries and
Departments of the National Government of India and State Government Departments
can access funds from the NAFCC through the submission of proposals. With
permission from the NAPCC, implementation of all projects can be undertaken at the
national, community or transboundary levels (GoI, 2008).
These four categories of actors engage with devolved finance differently. There are
important differences in how they envision devolution taking place and through
which sub-national institutions. The principles of Locally Led Adaptation formulated
by the international climate and development organisations form a normative
guideline of good practice within the project cycle. The proposed principles do not
adequately address climate change adaptation as a political process with conflicting
interests within nation states. This is, for example, reflected in principle three that

calls for externally funded projects to invest in ‘building and strengthening local
institutions’ to govern local adaptation action, without reference to the political
economy of existing institutions, including conflicting interests between central
ministries, local government structures, local civil society groups and others.
The principles of Locally Led Adaptation formulated by the

international climate and development organisations form a
normative guideline of good practice within the project cycle.
The proposed principles do not adequately address climate
change adaptation as a political process with conflicting
interests within nation states.
In contrast, the World Bank’s PPCR programme, the United Nations Capital
Development Fund (UNCDF) Local Climate Adaptive Living (LoCAL) programme and
the national policies in Kenya and India all seek to integrate climate change
adaptation into the government’s existing decentralised administrative and political
structures. The World Bank PPCR programme works through the Ministry of Finance
to facilitate national political ownership and ensure implementation through the
existing local government structures. This is in contrast to the UN international
climate funds and bilateral development organisations that work through the
UNFCCC national focal point that in many countries is the Ministry of Environment.
The most promising model is perhaps the Kenyan County Climate Change Fund
that enable meso-level elected government structures (Counties) that meet a set of
capacity requirements to apply for finance for climate change adaptation.
In addition to the actors described above, it is important to note that attention to

devolution is also increasing within international climate funds. Climate funds have
been critiqued for the difficulty of accessing funding, especially for sub-national and
smaller actors. In the Green Climate Fund, for instance, this has led to a Direct
Access Mechanism. However, entities must be accredited by Green Climate Fund
(GCF) to apply for funding through this mechanism. To get accredited, an entity
must be nominated by their country’s National Designated Authorities/focal points
(NDAs), go through a vetting process, receive GCF Board approval, and enter relevant
legal agreements. The entity can only then submit funding proposals for GCF-
supported projects and programmes through the Direct Access Mechanism. This
process is, of course, difficult for small, poorly resourced local entities.

The GCF is currently exploring new modalities for devolving finance and decision-
making that address some of these hurdles. One of these is the Enhancing Direct
Access (EDA) Pilot, which aims to increase devolution of decision-making and
promote a stakeholder-driven approach. Contrary to other GCF funding windows,
specific sub-projects submitted under the EDA window do not have to be included
in the original funding proposal or approved by the GCF to receive funding. Approvals
are instead determined in-country according to preapproved selection criteria (GCF,
2021a). One such EDA pilot has been running in Namibia since 2016 and provides
access to funding for community groups through the pilot programme.5 In addition,
GCF is implementing a new Sub-national Climate Fund Global (SnCF Global) which
seeks to ‘catalyse long-term climate investment at the sub-national level for
mitigation and adaptation solutions through a transformative financing model’
(GCF, 2021b). However, this is designed primarily to attract private investment,
which will likely limit its utility for certain kinds of adaptation needs. Other climate
funds are also exploring devolution, for instance the Adaptation Fund has also
established an Enhanced Direct Access Mechanism. These efforts within
international climate funds underline the extent to which devolution of climate
finance and governance has come onto international climate agendas.

GOVERNANCE OF DEVOLVED
ADAPTATION FINANCE

Since the Paris Agreement in 2015, adaptation debates have increasingly shifted
from focusing narrowly on finance to considerations around governance of
programming, implementation and impact of support for climate change mitigation
and adaptation. During the past two to three years there has been increasing
criticism of the highly centralised and technical character of support for climate
change adaptation (GCA, 2019), which has recently led to calls for support to be
more localised (Patel et al., 2020; WRI, 2021; Friis-Hansen, 2020; Adaptation
Summit, 2021). These calls are a response to a concern over poor effectiveness of
climate change adaptation interventions that are formulated and implemented by
centralised and technocratic actors who are situated outside local communities.
From the point of view of the communities, such interventions are often seen to be
financially biased, as only a small proportion of finance is used at the local level.
Further, the focus and priorities of such interventions do often not reflect aspirations
and priorities at the community level (Soanes, 2020b). From an aid effectiveness
point of view, the centralised governance and inadequate flow of financial resources
to sub-national levels raise questions over relevance, sustainability and cost-
effectiveness.
Many of these issues have been taken up in the principles for Locally Led Adaptation
(LLA), endorsed during the online international Adaptation Summit in early 2021.6
The endorsed principles include:
■ a principle on subsidiarity (devolving decision-making to the lowest

appropriate level).
■ three common principles of good governance (ensuring transparency and

accountability; investing in local capabilities to leave an institutional legacy;
flexible programming and learning).
■ a statement of climate change knowledge (building a robust understanding

of climate risk and uncertainty).
■ two principles relating to finance (providing patient and predictable funding

that can be accessed more easily; collaborative action and investment).
■ and a broad normative development aim (addressing structural inequalities

faced by women, youth, children, disabled, displaced, indigenous peoples and
marginalised ethnic groups).

The LLA principles address many important considerations in relation to devolved
adaptation. In the following discussion we build on them, further elaborating on
governance considerations specifically. Governance considerations – for instance,
regarding institutional processes and decision-making or knowledge and input –
are critical for how adaptation moves from finance to implementation, and for
adaptation’s prospects for success. We, therefore, have selected seven governance
considerations critical for robust devolved adaptation, drawing on the extensive
work on governance found in international development literatures, elaborated
below.
SEVEN GOVERNANCE CONSIDERATIONS FOR DEVOLVED ADAPTATION.
1. Subsidiarity .
Does the adaptation governance allow for decision-making at the lowest appropriate
level? Here we explore in more detail the enabling factors for first principle of LLA,
i.e. devolving adaptation to the lowest appropriate level. In so doing, we also
incorporate the third principle of predictable and accessible funding, as this cannot
be separated from the governance factors.
Subsidiarity is defined in research literature as the way to organise each task to the
lowest level with the capacity to conduct it satisfactorily. The justification for
subsidiarity is its perceived political and economic advantages for enhancing
representation and efficiency, as well as its inherent practical value of decision-
making being directly informed and directed by expertise on the ground (Marshall,
2008; Stoa, 2014). The concept of subsidiarity differs from decentralisation and
local control through its explicit recognition of the need for self-organisation
concurrent with a need for centralised coordinating institutions in order to meet
demands on externalities, economies of scale or inadequate capacity (Pritchett and
Woodcock, 2004, Garrick et al., 2012). The principle of subsidiarity emphasises that
complex decision-making is often best done as close as possible to the issue at
hand, while also recognising that coordination at higher levels may be needed to
govern wider socio-ecological systems, address externalities and ensure economies
of scale (Garrick, 2018; Marshall, 2008; Soanes et al., 2021).
So, what is the implication of subsidiarity for climate change adaptation? The
assignment of responsibilities according to the principle of subsidiarity may foster
adaptive capacity to climate change by enabling the advantages of decentralising

some responsibilities (e.g. sustainable natural resource management that requires
inclusive governance and local participation to succeed) to be achieved at the same
time as reaping the advantages of centralising other responsibilities (e.g. plant
breeding for drought tolerance). Subsidiarity is opposed to a one-size-fits-all
mentality where policymakers look to assign all responsibilities to the same (either
centralised or decentralised) level (Ostrom, 1999, 2012).
Adaptive action on one scale interacts with adaptive action on other scales and can
either interact positively with or constrain local priorities (Adger et al., 2005). Scales
of adaptation are, thus, not independent from each other, and adaptation action is
embedded in social and political processes within the wider political economy.
Climate change adaptation actions on the local scale are frequently guided by policy
decisions taken by higher level units of governance, i.e. national government or
international development organisations. Other adaptive action on the local scale
takes place to enhance opportunities of well-being without specific reference to
climate change hazards (Thornton and Manasfi, 2010).
While some fieldwork based studies on local governance of climate change

adaptation have been carried out in sub-Saharan Africa (Oshbahr et al., 2010;
Christoplos et al., 2016; Funder et al., 2017; Friis-Hansen, 2016, 2017; Rasmussen,
2018; Rasmussen et al., 2018; Dapilah et al., 2020) there is an empirical and
theoretical research gap in our understanding of how cross-scale interactions
influence and shape climate change governance and action (Rasmussen, 2019).
Lessons could be learned from studies of scale and institutions within the
considerable natural resource governance literature (Ostrom, 2001).
2. Integration in local government planning and decision-making.

Is the adaptation governance mechanism integrated with planning and decision-
making structures of local governments? While previously often considered
irrelevant or incompetent, experience from both adaptation and mitigation efforts
have increasingly shown that integration with democratically elected local
government mechanisms can be a key means to ensure that adaptation is
institutionally sustained and politically accepted at local levels (Duchelle et al., 2019;
Friis-Hansen, 2017; Wunder et al., 2020). Important, too, are mechanisms for airing
grievances, conflict resolution or an ombudsman function, as adaptation choices
have significant impacts on lives and livelihoods and can prompt controversy and
disagreement, and in some cases negative outcomes.

The majority of current finance for climate change adaptation is governed by
strategic plans from international agencies or National Adaptation Programmes of
Action (NAPA) at the national government level. NAPA was mandated under COP7
in 2001 and comprehensive national adaptation plans have been developed, often
with support from UNDP consultants. NAPAs have, however, been criticised for
centralising governance of climate change adaptation in line ministries with
resulting strong bias on technical solutions and limited devolution through local
government structures (Agrawal, 2012; Mamouda, 2011; Pramova et al., 2012; Friis-
Hansen, 2017). Many African governments have, through the NAPAs, reduced the
role of local government to implementation units for climate change adaptation
interventions, with no or limited influence during formulation and design of projects.
The situation is not better for internationally financed projects that frequently work
though national NGOs or set up new project institutions during implementation.
Few systematic empirical studies have yet focused on the political economy of
climate change adaptation at the local government level.
3. Spaces for public deliberation and participation.

Does the adaptation governance mechanism provide spaces for public deliberation
and participation? While local government mechanisms are key, their operation
typically requires supplementary spaces for public deliberation that allow the public
to develop proposals and ideas, or articulate grievances and claims vis-à-vis local
(and national) decision-making structures. Such spaces can be ‘invited’ by local
decision-makers or other actors (e.g. hearings, consultations or more permanent
participatory structures), or ‘claimed’ by citizens themselves (organised campaigns
and petitions, or collective organisation for self-driven activities) (Cornwall, 2017;
Cornwall and Coelho, 2007).
Cornwall (2008) makes a useful distinction between invited and claimed spaces of
political influence, arguing that invited spaces are ‘structured and owned by those
who provide them, as compared to (claimed) spaces that people create for
themselves’ (ibid: p. 275). The ‘Participation, Inclusion and Social Change’ cluster at
Institute of Development Studies (IDS) Sussex explored empirical cases of claimed
spaces of political influence and found that while they hold great potential for
ownership and legitimacy of decisions, only few local development programmes are
governed through spaces that people have create for themselves (Gaventa, 2005).

BOX 2. LESSONS FROM PARTICIPATION IN DEVELOPMENT.
Three general lessons can be drawn from the development literature that can be useful
for unpacking participatory elements in Locally Led Adaptation.
The first lesson is that in much of the mainstream support for participatory governance,
participation is framed narrowly as a methodology to improve project performance,
rather than seen as a process of fostering critical consciousness and decision-making
capacity and, thereby, nurturing inclusive citizenship (Friis-Hansen and Kyed, 2007).
This depoliticised and technical approach to participatory development, practised by
many development programmes, led critics to argue that participation can be used as a
form of political control by obscuring local political differences and a means of gaining
control over development activities (Cooke and Kothani, 2001). The subsequent debate
argued for repoliticisation of participation and for external development actors to pay
closer attention to the power politics of participatory spaces. Over the past decade,
many international and national civil society organisations have engaged in advocacy
for locally inclusive approaches to doing development.
The second lesson is to acknowledge that even the best designed participatory
programme is likely to be challenged as long as the democratic spaces for participation
are not created by people themselves but rather outside agents of change. One may
identify three challenges for socially inclusive and participatory local development:
who’s knowledge; who’s institutions; and who’s process (Friis-Hansen et al., 2018).
The first challenge is how we think about knowledge: who sets the initial agenda and
defines the challenge(s) around a community. In most cases it is outside experts who
are seen as possessing all the relevant knowledge for development. This assumption
undermines a much needed dialogue between partners, who together may possess
knowledge that is complementary. The second challenge is to decide whose institutions
to use. Institutions include not only the organisational structures but also the ‘rules
of the game’ that guide human interactions (North, 1990). Development agencies are
permeated by both formal and informal institutions, and communities also have their
institutions. The institutional challenge of participation arises when formal institutions
of development dominate in the engagement with informal institutions of communities.
The third challenge for community development practise is to think about participation
from the other direction, or, how to become participants in other people’s processes.
Participation, as typically understood and practised, retains a legacy of a top-down view
of social change: it invites ‘communities’ into development processes and development
decision-making, it respects their voices and their presence, but it asks them, in effect,
to leave their knowledge and institutions at the door (Eversole, 2010).

The third lesson is that participatory approaches are vulnerable to elite capture, where
influential groups within the local community are able to mobilise and dominate the
agenda to further their own self-interest. Empirical studies have, however, shown that
it is highly context specific whether elite capture is detrimental to the rest of the com-
munity (Bardhan and Mookherjee, 2006), or results in better community management
leading to better resource allocation for all, including the poor (Dasgupta, 2009).
4. Devolution of decision-making over climate finance.

Does the adaptation governance mechanism allow local decision-making over the
use of adaptation finance? A common issue in adaptation efforts is that even if
activities are integrated in local institutional mechanisms, the financing comes with
‘strings attached’ from global or national levels that determine the scope if its use.
To avoid local institutions becoming mere implementers for governments and
donors, they must have real control of climate finance (Soanes et al., 2019).
Considerations on meaningful devolution can draw on extensive development

experience and debates around decentralisation. These point to different approaches
to devolution. On the one hand, there can be de-concentration, where funding is
devolved to lower administrative levels, while decision-making remains at higher
administrative levels. In this model, local actors become implementers, as discussed
above. On the other, there can be more meaningful decentralisation, where funding
and decision-making are both devolved to lower levels. Such decentralisation does
not necessarily entail pluralistic or inclusive local decision-making but is a
prerequisite for it. In many cases, devolution may lie somewhere between full
decentralisation of funding and decision-making and mere de-concentration. For
instance, national policies may provide a framework within which there is room for
flexibility for sub-national decision-making. Approaches may also differ from sector
to sector within each country and are closely linked to the specific institutional and
political environment. For successful climate change adaptation, discretion of sub-
national actors over funding can support context-relevant interventions and
approaches.

5. Decision-making informed by local knowledge and knowledge needs.
Is the adaptation governance mechanism informed by local knowledge and locally
articulated knowledge needs? Locally generated knowledge is often critical in
identifying adaptation options that are durable and that do not lead to maladaptation.
This can include use of dedicated participatory tools to capture existing local
knowledge (Roth and Rist, 2012), or joint knowledge production with met. services
and/or research (Kettle et al., 2014; Rasmussen et al., 2018; Tengö et al., 2014).
IPCC, through its consolidated global reports and ‘science speak to policy’ approach,
has become the focal point and source of inspiration for mainstream climate
change adaptation projects. While recognising indigenous knowledge to enhance
adaptation, IPCC’s emphasis on climate science has reduced the impotence of non-
scientific knowledge to a question of local perceptions. This is, for instance, evident
in the way the IPCCs work is characterised by unidirectional communication of
scientific experts outwards, rather than reciprocal communication that also invites
contributions from other forms of experts and expertise, for instance, local
knowledge (Dudman and de Wit, 2021).
This is unfortunate, as knowledge about how the socio-economic and political

context is needed if adaptive action is to successfully address social vulnerability.
The principal source of such information is vulnerable people themselves, who can
also contribute to identifying which changes could help them to adapt. Mechanisms
to secure local input, and that of the marginalised and most vulnerable particularly,
therefore, will be critical to foster project-based interventions, as well as local
decision-making institutions and processes generally.
6. Predictability of financial flows.

Is the adaptation governance mechanism based on consistent and predictable
climate finance flows? Experiences from other areas of climate financing, e.g.
Reducing Emissions from Deforestation and Forest Degradation in Developing
Countries (REDD+), have highlighted the risk of having financing come from a
multitude of fragmented pilot efforts (Duchelle et al., 2019). While initial pilot efforts
and start-up funding can be a good way to test approaches, long-term funding is
vital. This is because a litmus test for adaptation will be whether it can become
integrated into government institutions, planning and processes. Adaptation is
increasingly an ongoing aspect of governance and development around the world,
and short-term projects are at risk of offering only a short-term, patchwork response.

Predictability can not only offer long-term engagement, it can also support the
institutionalisation and capacity building necessary to support a more holistic,
sustainable response.
Predictable funding can come from various sources. It may derive from national
government budgets, through domestic resource mobilisation in the form of taxes.
However, as underlined in global climate agreements, those least responsible and
most affected should receive financial support to address climate impacts. Global
funding schemes, for instance climate funds, are set to play a central role in
providing adaptation finance. This support should include long-term (i.e. projects
beyond four to five years) funding possibilities.
7. Supportive national policy environment.

Is there a supportive national policy environment for devolved adaptation gover-
nance? Locally based adaptation does not mean that national policy frameworks
are irrelevant. On the contrary, ensuring that national policies and strategies support
locally led adaptation is critical. This could, for instance, be outlined in nationally
determined contributions or laid out in national adaptation policies and plans, as
well as wider policies on decentralisation or relevant sector policies, e.g. water,
agriculture or forestry (Barrett, 2015; Funder et al., 2017).
When considering sub-Saharan Africa, many countries undertook decentralisation

reforms in the 1990s and the resulting sub-national administrative and political
structures are today typically responsible for service provision, e.g. health and
education, along with physical infrastructure, agriculture and natural resource
management. The Climate Change and Rural Institutions research programme
(Consultative Research Committee for Development Research (FFU), 2012-2015)
– among the first to examine climate change governance at district and sub-district
(sub-county/ward/municipal) levels — revealed a strong need for climate change
action as a response to climate change hazards and a need for local government
to become engaged in mediating the conflicting priorities for climate change
adaptation between different socio-economic groups. The CCRI studies also
revealed that local governments often had neither incentives nor financial resources
to become involved (Funder et al., 2017; Friis-Hansen, 2017).

MODELS OF DEVOLVED ADAPTATION
FINANCE AND GOVERNANCE

In the following we attempt to analyse the different models of devolved governance
and finance of climate change adaptation described previously using the seven
principles introduced previously. As devolved governance and finance of climate
change adaptation is a relatively new trend, there is, as yet, limited experience to
draw on. These analyses are, therefore, initial assessments on the basis of current
implementation, in some cases particular to a case country. The four examples
represent different models for implementing support for devolved governance and
finance of climate change adaptation.
PILOT PROGRAMMES FOR CLIMATE RESILIENCE, ZAMBIA
PPCR activities in Zambia form part of the broader suite of 28 PPCR country
programmes funded under the Climate Investment Funds and administered by the
World Bank. While the PPCRs have been strongly donor-driven (Seballos and Kreft,
2011; Shankland and Tambote, 2011), there is some evidence that the programmes
have helped trigger climate finance planning and coordination at national and sub-
national levels (Bird et al., 2019; ITAD, 2019).
The Zambian activities, in particular, have been promoted as an example of

successful PPCR implementation (CIF, 2018; Soanes et al., 2020). In the Zambian
programme, local governments in 25 target districts are supported in mainstreaming
climate finance into district development plans, with associated training of local
government staff. In conjunction with this, grants are provided to specific adaptation
projects formulated by stakeholders at district, ward and community levels.
Figure 2. Assessment of devolved governance and finance in PPCR, Zambia
4 Subsidiarity
3
Supportive national Integration in local government
policy environment 2 planning and decision-making
0
Predictability of ﬁnancial flows Spaces for public deliberation
– or project and budget and participation
Decision-making informed by local Devolution of decision-making

knowledge and knowledge needs over climate ﬁnance
Source: Scoring intervention using principles of devolved governance and finance of climate change
adaptation.

Using the seven suggested governance suggestions for adaptive action, Figure 2
and Table 1 provide an assessment of to extent to which the PPCR Zambia.
Table 1. Explanation for assessment of devolved governance and finance in

PPCR, Zambia
Principle Analysis Score
Subsidiarity The PPCR approach emphasises subsidiarity by seeking to embed 3

adaptation planning in local government structures (so-called District
Councils), and by providing opportunities for elected representatives and
citizens to propose specific adaptation projects at sub-district (ward and
community) levels. Within this arrangement decision-making power does,
however, lie strongly with the District Councils, who approve all proposals
from ward and community levels. Activities at sub-district levels are
restricted to proposing individual projects, meaning that broader planning
and decision-making at these levels is not carried out.
Integration in local The PPCR project design emphasises development of district level 3
government planning adaptation plans. However, donor criteria for what can be supported and
and decision-making what cannot have, in some cases, complicated integration with planning
(e.g. district development plans cover the entire district but PPCR funding
can only be provided to climate vulnerable communities).
Spaces for public These have been limited to individual project proposals in which citizens 2
deliberation and and community groups can participate, sometimes with technical support
participation by NGOs recruited as service-providers. Broader spaces for public
deliberation on ‘what kind of adaptation do we want here’ have, to some
extent, been provided through community groups. Opportunities for
expressing grievances beyond the formal planning process have, however,
not been emphasised.
Devolution of De facto devolution of decision-making over climate finance within the 2

decision-making Zambian PPCR is restricted by several factors: (i) a strong reliance on the
over climate finance external CIF funding which means that local actors must plan within the
timeframes and scope of PPCR funding and WB preferences; (ii)
requirements for both district and sub-district level funding and planning
proposals to be approved at higher levels, including provincial and national
government authorities and the national PPCR structure.
Decision-making Community proposals provide some scope for inclusion of local 3

informed by local knowledge, and some NGOs and government staff seek to facilitate this
knowledge and on their own account. However, there is no targeted effort to draw on
knowledge needs traditional knowledge.
Predictability of There is strong dependency on PPCR funding. Although other donor 1

financial flows financing may replace PPCR funding in some areas, it is unclear how and
whether funding will be sustained through government mechanisms once
the CIF funding terminates.
Supportive national Zambia has a long-standing decentralisation policy, and the PPCR 2
policy environment support, in principle, builds on this. In practise, roll-out of the broader
decentralisation policy has been slow, and despite recent progress,
national level ministries relevant to adaptation remain reluctant to
relinquish power and funding in many sectors.
Source: Fieldwork in Zambia by authors and review of PPCR project documents.

ADAPTATION LEARNING PROGRAMME, GHANA.
The CARE-initiated Adaptation Learning Programme (ALP) supported local

adaptation in farming and pastoralist communities in Ghana, Niger, Mozambique
and Kenya from 2010–17. The programme emphasised multi-stakeholder
collaboration and sought to provide spaces for joint decision-making that involved
communities, local government institutions and CSOs (CARE, 2015; Percy, 2014).
In Ghana, the ALP sought to establish devolved frameworks for community-based

adaptation in two districts, including:
■ Participatory district level planning, whereby communities and district planners

and technical staff conducted joint analysis and mapping of climate change
hazards, vulnerabilities and risks, as well as associated poverty/livelihoods impli-
cations. This led to incorporation of adaptation activities and indicators in district
development plans and preparation of community adaptation action plans.
■ Participatory scenario planning, whereby meteorologists, community members

and technical government staff conduct seasonal climate forecasting in support
of farmers’ planning. The forecasts combine local and expert knowledge.
■ Training of ‘community monitors’, responsible for monitor and communication

on adaptation progress in communities and for conducting advocacy on behalf
of communities vis-à-vis lo-cal governments and government technical staff.
Figure 3. Assessment of devolved governance and finance in CARE-supported

community-based adaptation framework, Ghana
4 Subsidiarity
3
0

Source: Scoring of intervention using principles of devolved governance and finance of climate change
adaptation.

The ALP model in Ghana, thus, featured strong inclusion in devolved adaptation
planning (Rasmussen and Friis-Hansen, 2017; Rasmussen et al., 2018). Challenges
included a tendency for local political elites to maintain final authority in decision-
making and limited control over and predictability of a sustained flow of finance. Se
the assessment of the ALP program in Figure 3 and table 2 below.

CARE-supported community-based adaptation framework, Ghana
Subsidiarity Innovative institutional mechanisms for devolved adaptation planning and 3

implementation at local government and community levels. Due to large
areas, local government representatives are not always well positioned or
sufficiently knowledgeable to decide on community planning.
Integration in local Community adaptation plans and participatory scenario planning is 4

government planning incorporated in district development plans and mainstreamed into
and decision-making budgetting process. District Assembly planning units capacitated to
address and incorporate adaptation planning.
Spaces for public Joint spaces for community/ Civil Society Organisation (CSO)/local 4
deliberation and government analysis and debate on adaptation planning. Community
participation monitors trained to foster communication, monitor progress and perform
advocacy role a community representatives vis-à-vis local and central
government actors.
Devolution of 2
Self-generated funding for adaptation through e.g. micro-credits, but
decision-making
external climate financing dependent on donor funding and priorities.
over climate finance
Decision-making Participatory scenario planning includes use of traditional and experience- 4

informed by local based knowledge of seasonal change and impacts on farming, combined
knowledge and with insights and data from meteorologists and technical specialists.
knowledge needs Joint plans fed into district planning and agricultural extension activities.
Predictability of Uncertain. In principle, governments should take over funding but 1

financial flows adaptation financing so far remains limited and donor- dependent.
Supportive national National climate policy supports devolved adaptation planning and
2
policy environment guidelines developed for incorporating adaptation in local government
development plans. However, de facto fiscal decentralisation lags behind
and decision-making authority remains centralised on many aspects of
adaptation (Rasmussen et al., 2018; Sova et al., 2017).
Source: Draws on DIIS field research in Ghana by authors (Rasmussen & Friis-Hansen, 2017; Rasmussen
et al., 2018) and review of ALP project documents.

LOCAL CLIMATE ADAPTIVE LIVING, MOZAMBIQUE.
The UN Capital Development Fund’s (UNCDF) Local Climate Adaptive Living (LoCAL)
Facility (Dinshaw and McGinn, 2019) offers a practical mechanism to integrate
climate change adaptation into local governments’ planning and budgeting systems,
increase awareness of and response to climate change at the local level, and
increase the amount of finance available to local governments for climate change
adaptation. It provides performance-based climate resilience grants that add
additional finance for climate change adaptation to existing local government
infrastructure projects. Financial resources are combined with technical and
capacity-building support that allow local government authorities to align adaptation
concerns with established decision-making processes and public planning and
budgeting cycles. Compared with PPCR, LoCAL is relatively small in terms of
funding, with a total of USD 84 million mobilised during 2014–2019, but has,
nevertheless, operated in 280 local governments in 14 countries and has established
a viable model for locally led adaptation (UNCDF, 2020).
Figure 4. Assessment of devolved governance and finance in LoCAL,

Mozambique
4 Subsidiarity
3
0

adaptation.
Figure 4 illustrates the extent to which the LoCAL approach in Mozambique is in

sync with the seven suggested governance suggestions for adaptive action and
additional explanation for the assessment can be sead in Table 3.

Table 3. Explanation for assessment devolved governance and finance in LoCAL,
Mozambique
Subsidiarity LoCAL scores relatively high on subsidiarity, reflecting a strong devolution 3

of financial resources and governance from central to local government.
However, while power and resources are devolved to local government
councils, the level of inclusion of sub-local government stakeholders is
unclear in the LoCAL model and unevenly implemented in the case of
Mozambique.
Integration in local The LoCAL model enables full integration of climate change adaptation in 4
government planning local government planning and decision-making. The LoCAL model is
and decision-making guided by principles of performance-based service delivery, which provide
local governments with clear incentives to integrate climate change
adaptation concerns in their overall planning.
Spaces for public LoCAL has no specific provisions for public deliberation and participation 2
deliberation and at sub-local government levels. In the case of Mozambique this has
participation resulted in few joint spaces for interaction with respect to adaptation
planning between local government and community members/civil
society organisations in adaptation planning.
Devolution of Decisions to climate-proof existing infrastructure or add additional 3

decision-making resilience measures to planned infrastructure investments are devolved to
over climate finance local government. Financial support is, however, subject to compliance
with LoCAL framework.
Decision-making Decision-making informed by local knowledge and knowledge needs 2

informed by local scores relatively low because the LoCAL programmes’ strong focus on
knowledge and infrastructure resilience that emphasises the technical knowledge of local
knowledge needs government bureaucrats.
Predictability of Local governments predictability of financial flows is relatively high, as 3

financial flows access to financial support is based on principle of performance-based
grants that provide clear parameters that allow ‘good’ performers
continued or even enhanced funding. It is, however, uncertain if similar
levels of financial support will continue when the LoCAL project
terminates.
Supportive national A strong and positive interaction exists between the LoCAL programme 3
policy environment and the ongoing political process of decentralization reforms in
Mozambique. However, the parliaments passing of central elements in the
decentralization reform has been subject to delays, indicating uneven
political support. Further the practical implementation the decentralization
reform is lacking behind.
Source: Review of LoCAL project documents.

COUNTY CLIMATE CHANGE FUND, KENYA.
Mainstreaming of climate change adaptation and mitigation into Kenya’s

government planning, budgeting and development objectives was first introduced
in 2010 with the National Climate Change Response Strategy and operationalised
with the National Climate Change Action Plan I (2013–17). With its 2015 Intended
Nationally Determined Contribution, Kenya’s government extended mainstreaming
efforts into its development blueprint, Vision 2030, including its Medium-Term Plans
(MTPs) up until 2022. In 2016, the Climate Change Act was passed, integrating
adaptation considerations across all sectors – from development planning and
budgeting to decision-making and implementation – for all levels of government.
‘Greening’ initiatives started to be implemented in diverse sectors, including
manufacturing, agriculture, infrastructure and health. Also in 2016, the national
Climate Change Fund was established, and the National Adaptation Plan (NAP) was
set up, requiring counties to develop certain finance procedures and track adaptation
actions. All counties are now obliged to mainstream climate information7 into local
governance structures, including their County Integrated Development Plans
(CIDPs). Doing so opens the door to receive funds from Kenya’s County Climate
Change Fund (CCCF) for adaptation measures that are locally founded while in line
with national climate change policies and development plans. That said, the move
from planning to implementation of these structural requirements is more
challenging in some counties compared to others, which has currently stalled
country-wide implementation of the CCCF (WRI, 2020). However, experience from
the five pilot counties shows great potential for catalysing climate resilience and
inclusive development. In 2019, the CCCFs in these five pilot counties had led to
more than 100 community-prioritised investments, and with the strong linkages to
local communities, these investments seem to have particularly benefitted
marginalised groups, such as women and youth. Moreover, CCCFs in the pilot
counties have directly empowered local institutions involved in climate resilience.
Despite only being able to assess the pilot counties, some scholars hail the CCCFs
as a model for effectively structuring the flow of global climate finance to reach
vulnerable communities and, thereby, directly contribute to climate-resilient
development (Crick et al., 2019; Odhengo et al., 2019).
An assessmnet of the CCCF program is illustrated and explained in Figure 5 and

Table 4.

Figure 5. Assessment of devolved governance and finance in County Climate
Change Fund, Kenya
4 Subsidiarity
3
0

adaptation.

County Climate Change Fund, Kenya
Subsidiarity The CCCFs are institutionally structured to establish direct connections 3

between the communities and the funds via flows of funds and decision-
making that start and end with planning committees on each ward level
– Ward County Climate Planning Committees (WCCPCs). The WCCPCs
are elected by each community and are tasked with the identification of
the community’s adaptation needs and hold some degree of responsibility
for managing the disbursed funds. Although, the approval and processing
of the WCCPCs’ initiatives lie in other county level institutions, experiences
from the five pilot counties have shown a high degree of involvement and
collaboration. Importantly, inconsistencies and contextual differences
between counties have delayed full implementation. Therefore, and given
the high degree of variability between the counties, it is still unknown
whether the good results from the five pilot counties can be consistently
reproduced in the remaining 42 counties.
Integration in local According to the system for implementing the CCCFs, each county must 4
government planning monitor and report their climate information through the local extension
and decision-making offices of the National Drought Management Authority (NDMA), who then
mainstreams the information into the national planning. It is on the basis
of this reported information that counties get access to the CCCFs and
can distribute funds to locally founded adaptation measures. The priority
areas of the CCCFs are also closely tied to each county’s development
priorities (in their County Integrated Development Plans), not least
because each county is obliged to set aside 1–2% of their annual
development budget to the county’s climate change projects8. As such,
the development funds from the counties and the CCCFs are expected to
be integrated into climate-compatible development initiatives.

Spaces for public Based on the five pilot counties, the model with WCCPCs have shown 3
deliberation and great results in terms of inviting and motivating local-level participation in
participation planning, implementing and managing climate change initiatives.
However, with incomplete implementation it is not yet possible to
determine how this will work in the remaining counties. Specifically,
whether decision-making and funds are effectively controlled by national
or county level institutions (such as the NDMA) despite the setup of
formal involvement of the WCCPCs. This uncertainty is important because
especially counties in arid and semi-arid areas in Kenya have a history of
struggles with weak government institutions, which has previously
resulted in a disconnect between government planning and community
planning, where consultation and involvement of community-based
institutions have been absent or excluded from planning processes
(Odhengo et al., 2019).
Devolution of If the requirements for the CCCF structure are successfully implemented 3
decision-making by all counties as planned, the county level and local institutions will have
over climate finance extensive control over the climate funds from the CCCF. However, while
devolution in Kenya may seem impressive on paper, in practise, centralised
institutions have shown a degree of resistance in relinquishing power. Due
to the incomplete implementation, the county-specific implications for the
CCCF are yet unknown.
Decision-making The funds are linked to the county’s own reported climate information 4
informed by local regarding vulnerabilities, hazards, food security and risks as well as
knowledge and actions proposed by the counties themselves. With the use of community
knowledge needs resource mapping, participatory vulnerability and resilience assessments
and systems for resilience monitoring (designed to track the link between
adaptation, resilience and economic development), the CCCF model
includes a very high degree of participatory planning and locally driven
initiatives. The participatory tools used in all wards in the county assist the
county institutions in prioritising investments that best targets
communities in terms of climate resiliency and vulnerability. The NDMA
have also piloted efforts to empower the county and community level
institutions to be able to apply for external funds directly. The strong
inclusion of the ward levels and the WCCPCs in planning, as well as in
implementation, as strengthened accountability, for instance with the
WCCPCs close monitoring of contractors.

Predictability of The CCCF is receiving funds from a variety of channels, including from 4
financial flows global/multilateral funds/institutions, national budgets, bilateral donor
funds, and private sector partners. The CCCF model is designed to blend
these resources and, therefore, has a low dependency on single sources of
finance. The additional contribution from the counties themselves (1-2%
of annual county development budgets) only adds to the relatively strong
stability of these funds, which creates a high predictability of the financial
flows.
Supportive national National government institutions have made extensive efforts to 3

policy environment mainstream adaptation into government planning, starting from 2010.
Adaptation considerations have, thus, been integrated across all sectors.
National policies have led to an extensively devolved, albeit complex
institutional system, with the County Climate Change Fund (CCCF) as one
such devolved government initiatives. However, there have been concerns
that the formal structures are not fully functioning in practise. For
instance, the full integration of climate information into government
planning has been questioned, and there have been instances where
budget guidelines set by national government institutions have been
limiting the capacity of regional and local governments to support locally
determined development priorities. With the CCCF model still not fully
implemented across all counties, the actual support of national policies is
uncertain.
Source: Fieldwork in Kenya by authors and review of CCC project documents.

DANISH SUPPORT FOR DEVOLVED
ADAPTATION FINANCE

As attention to devolved adaptation grows and models are increasingly implemented
on the ground, some donors have begun considering how to approach devolution in
their own adaptation support. Here we look specifically at devolution within Danish
adaptation financing. Over the last five years, adaptation has received greater focus
in Danish climate finance (Funder et al., 2020), and attention and financing for
adaptation continues to ramp up. Denmark’s latest international development
strategy, ‘The World We Share’, released in June 2021, emphasises climate as one
of three main focus areas, with specific goals for adaptation. In September 2021,
Denmark pledged to contribute 1% of the 100 billion dollars global commitment
that is targeted to be mobilised annually in climate finance from 2020. Sixty per cent
of this contribution has been pledged to adaptation. Denmark’s engagement in
adaptation will, therefore, likely increase significantly in the coming years.
The assessment presented here, while focused on the case of Denmark, can offer
relevant insights for other actors in their engagement with adaptation. Many donors
and development actors are increasingly engaging with adaptation, for instance as
countries boost their adaptation finance towards a balance between adaptation and
mitigation. This will entail strategic considerations of how best to direct increased
adaptation finance for successful outcomes on the ground – both in the short term,
and also in laying the groundwork for future resilience and adaptation. The
assessment provided supports such consideration, drawing on the governance
considerations put forward earlier.
We first provide a brief overview of the data and approach used and then assess the
current state of devolution in Danish adaptation support. We subsequently discuss
this status and possible ways forward in reference to the seven governance
considerations for devolution.
APPROACH AND DATA.
As with other studies of devolved finance, this study is limited by available

information on climate finance. No current international reporting mechanism
includes reporting on devolved finance, and there are no current prospects for
improved reporting on devolved finance. This is a challenge faced by all studies of
devolved or locally led finance conducted on the basis of international climate
finance reporting. It reflects fundamental limitations in international climate finance
reporting and data, which renders accurate assessment of these financial flows
difficult.

Despite this, it remains important to assess devolved climate finance. Because of
the limitations in the data, this assessment does not aim to provide an account of
the share of adaptation finance reaching sub-national levels. Such data is simply
not available in international climate finance reporting. Instead, the assessment
sheds light on the character and distribution of adaptation finance flows of relevance
to devolution. It examines who implements adaptation commitments, who are the
intended beneficiaries, what kinds of funding modalities are used (e.g. project
funding or budget support), and through which institutions or actors funding is
channelled (e.g. international NGOs, central governments, etc.). These indicators
are further discussed below. Together, they illustrate to what extent commitments
aim to reach populations and institutions on the ground; who is responsible for
decision-making in implementation phase; who has decision-making power at
higher levels; and to what extent funding is predictable.
For this assessment, we draw both on international climate finance data as well
as project documentation of adaptation commitments. We draw specifically on
OECD DAC climate finance data as this also offers some additional information
on recipients when compared to UNFCCC data. We look specifically at Danish
climate Official Development Assistance (ODA) commitments for 2018 marked
as adaptation-related, either significant or principal. The majority of the 2018
commitments are for multi-year development engagements or are recurring
commitments. The findings, thus, provide some insight into Danish adaptation
support in recent years. For further information on methods and limitations see
Annex 2.
For these adaptation commitments, we have identified and assessed the four
indicators noted below that provide insight into aspects of devolution in Danish
support to adaptation:
Implementing entity refers to the institution(s) or actor(s) responsible for carrying

out the activities for each commitment; for instance, in a water programme this
might both be the Ministry of Environment as well as water companies. We use
implementing entity as an indicator of devolution of adaptation finance and decision-
making. Implementing entity also gives an indication of which kinds of actors are
engaged in adaptation. To identify implementing entities, sometimes multiple per
commitment, we have reviewed project documents to determine who is responsible
for carrying out adaptation activities. This is a fairly robust method for assessing
devolution of climate finance and decision-making with limited available data.

Targeted entity describes the intended beneficiaries of each commitment, and can
include individuals, groups or institutions. In the example of a water programme,
this could be local communities or user groups. Target entities are also identified
through review of project documents. Assessing targeted entities for each
commitment gives insight into whom commitments aim to reach, i.e. if they are
aimed directly to populations affected by climate change on the ground, or if they
are directed to higher administrative levels. Targeted entity, therefore, also gives
insight into devolution of adaptation finance, but not of decision-making.
Funding modality refers to the manner in which finance is disbursed. Here we look
specifically at core funding and project funding as two main modalities for
adaptation finance, both with implications for devolution. As discussed in the
considerations for governance, predictability of funding is important for successful
devolution. Short-term pilots and projects, and even five-year programmes with the
possibility of extension, fail to provide predictable funding. Funding modality has
been determined by information in OECD DAC data and through document review.
Channel of delivery describes what type of institution or organisation adaptation

finance is channelled through, for instance central government, a multilateral
organisation, an international NGO, etc. There is often overlap between channel of
delivery and implementing agency. However, implementing agency offers a better
indication of devolution as it includes entities other than the original recipient that
are involved in the delivery of adaptation activities. Channel of delivery is reported by
donors to OECD DAC. We have therefore drawn directly on OECD DAC data, though
have grouped some channels of delivery for simplification and clarity.

KEY FINDINGS.
The assessment of Danish adaptation support in 2018 has produced the following
key findings, further elaborated on below:
BOX 3. KEY FINDINGS ON DEVOLUTION IN DANISH ADAPTATION

SUPPORT.
1. Overrepresentation of international entities in implementation

2. Contrast in who implements and who is targeted
3. Multilaterals’ role warrants further consideration
4. Devolution in INGOs’ work unclear but important
5. Sub-national and local entities mainly targeted
6. For those affected, project funding dominates
7. Channel of delivery affects who is targeted
1. Overrepresentation of international entities in implementation.

Looking first at those implementing adaptation, there is a skewed distribution of
responsibility for implementation, with international actors disproportionately
responsible for implementation and sub-national entities much less so, see Figure
6. International entities, including multilaterals and International Non-Governmental
Organisations (INGO), figure most prominently and were responsible for
implementation of 19 commitments. In contrast, national level entities were only
responsible for implementation of seven commitments, while sub-national
governments and domestic NGOs were only responsible for implementation in five
commitments each. In other words, international entities were responsible for
implementation of more commitments than national level entities, sub-national
governments and domestic NGOs combined.
This is notable as sub-national governments are seen as critical actors in efforts to

devolve finance and decision-making to lower levels, while NGOs are seen to have a
comparative advantage in working with communities and vulnerable populations.
Despite this, responsibility for implementation clearly tends towards higher
administrative levels and international organisations. This may be a structural issue
in current forms of cooperation. The models for devolved adaptation finance and
governance may provide inspiration for new forms of cooperation that can support
devolution.

Figure 6. Implementing and targeted entities in Danish adaptation support
14
12
10
0
IOs Os nts en
ts BO
s
up
s tor nts Os he
r
ING rnme /C gro ec lta NG Ot
e e rnm e s e d a t es n su
ov ov iti lis Pri
v Co
lg lg un ina
na na mm Marg
a tio a tio C o
N b-n
Su
Implementer Targeted
Source: Source: Authors’ analysis, OECD DAC Climate-related development finance dataset 2018
(accessed from https://www.oecd.org/dac/financing-sustainable-development/development-finance-to-
pics/climate-change.htm). For more on methodology see Annex 2.
Figure 6 presents an assessment of which entities are responsible for implementing

Danish adaptation commitments and which entities are targeted by, or the intended
beneficiaries of, these commitments. It indicates that responsibility for
implementation is situated far from those affected and illustrates symmetry within
those responsible for implementation. Sub-national governments are responsible
for implementation in only 5 of the commitments reviewed, compared to almost 20
commiments for international organisations (IOs) and international NGOs (INGOs)
combined. Greater devolution would likely result in more localised implementation,
which has been shown to support local engagement and knowledge input and
improve efficiency and outcomes.
2. Contrast in who implements and who is targeted.

There is also a clear contrast in who is responsible for implementation and who is
targeted. Some contrast is to be expected as those carrying out adaptation activities
and the intended beneficiaries will generally be different. However, devolution in
adaptation finance would entail shifting finance and decision-making closer to
intended beneficiaries. In a more devolved approach, one would expect a larger role
for sub-national government entities in implementation than is currently the case.

As described earlier, devolving decision-making to the lowest appropriate level,
often closer to those targeted, has been seen to increase efficiency and improve
outcomes, particularly for marginalised groups. In addition, integration in local
government planning and decision-making is crucial for enabling sustainable
adaptation processes on the ground. Yet it is unclear to what extent that this is
enabled through Danish adaptation support.
This gap between implementing and targeted entities in Danish adaptation support
may have negative implications for efficiency and outcomes. In documenting this
contrast, Figure 6 can provide a benchmark for assessing devolution of Danish
adaptation support going forward. This comparison can also be a simple and useful
tool for other development actors aiming to assess and improve devolution in the
implementation of their adaptation support.
3. Multilaterals’ role warrants consideration.

Multilateral organisations are prominent in implementation of adaptation and are
also a main channel of delivery of Danish adaptation finance, with 26% of Rio-
marked adaptation finance in 2018 (see Figure 7). This is not including imputed
multilateral contributions, or those shares of multilateral contributions later
estimated to be used on adaptation, see Annex 2. When including such contributions,
the share of Denmark’s adaptation finance being channelled through multilateral
institutions is, therefore, even higher.
This major role for multilateral organisations is not only of significance for devolution
of funding and decision-making, but also in terms of the sectors that are addressed
by adaptation commitments.
Funder et al., 2020 argue that there is a stark difference between sector engagements
of Danish adaptation commitments when comparing bilateral and multilateral
commitments in previous years. This difference underlines that adaptation
commitments directed through multilateral institutions support fewer and different
adaptation sector engagements than the more diverse engagements of Danish
bilateral adaptation support. While both are valuable, there is a need for strategic
consideration of the aims of Danish support to adaptation and which implementing
agencies (closely linked to channel of delivery) can best support them. These
considerations are becoming more important as Danish development funding is
increasingly channelled through multilateral organisations and Danish climate
finance and support to adaptation specifically is pledged to increase.

4. Devolution in INGOs’ work unclear but important.
One point for further investigation regarding devolved responsibility for
implementation is devolution in the work of INGOs. When looking at channel of
delivery in Danish adaptation finance in 2018, INGOs received the single largest
share of adaptation finance (36%, see Figure 7 below). Commitments to INGOs were
typically core funding (in seven out of nine commitments, e.g. CARE Denmark
Strategic Partnership 2018), and it is, therefore, unclear to what extent INGO
activities may include other implementers, for instance community groups,
domestic NGOs, etc., or who they targeted. The INGOs receiving funding (incl. CARE
Denmark, Danish Red Cross, DanChurchAid, among others) generally focus on
communities and marginalised groups. This may also mean that the number of
communities/community organisations and marginalised groups targeted through
Danish adaptation assistance is likely even higher than shown in Figure 7.
Because of INGOs’ major role in Danish adaptation, it will be important to further

examine their approach to devolution in order to get a full picture of devolution in
Denmark’s adaptation finance. This is both in terms of who is involved in
implementation and who is targeted, as discussed above. However, it will also be
relevant to consider to what extent INGOs engage with government structures or
local decision-making processes. INGOs may have a comparative advantage
in working with communities and vulnerable populations, which could be
Figure 7. Share of adaptation finance according to channel of delivery
2%
■ Multilateral
20%
26% ■ INGOs
■ Bilateral
■ Research/Think tank
15% ■ Other
36%

valuable when fostering spaces for public deliberation as well as participation and
decision-making informed by local knowledge and needs, two of the governance
considerations discussed earlier.
5. Sub-national and local entities mainly targeted.

Those entities targeted by Danish adaptation commitments are generally at lower
administrative and local levels. National governments are targeted in only four
commitments, compared to sub-national governments in eight, communities/
community groups in 13 and marginalised groups in nine. Targeting of private
sector, including of SMEs, also comes out clearly in six commitments.
Figures 8 shows the share of commitments targeting each intended beneficiary

(regarding the number of commitments rather than commitment amounts). In the
assessed commitments, communities and community organisations are targeted
most frequently, in almost a third of all commitments. Targeting of civil society
organisations (CSOs) is notable in its absence, though targeting of both community
and CSOs would likely be higher with more detailed information on how core funding
to INGOs is used. Overall, sub-national and local entities – represented by sub-
national governments, communities/community groups, and marginalised – are
targeted 74% of the time. This reflects the importance of these actors in adaptation
and indicates that the majority of Danish adaptation-related commitments assessed
indeed seek to reach local actors.
Figure 8. Targeted entities
2%
10%
15% ■ National governments
■ Sub-national governments
19%
■ Communities/community
organisations
22% ■ Marginalised
■ Private sector
■ NGOs
32%
Source: Authors’ analysis, OECD DAC Climate-related development finance dataset 2018 (accessed from
https://www.oecd.org/dac/financing-sustainable-development/development-finance-topics/climate-chan-
ge.htm). For more on methodology see Annex 2.

Field-based studies following such commitments through implementation could
provide valuable additional knowledge of successes and challenges experienced
during implementation, as well as of outcomes. While the recent evaluation of
Danish adaptation documented that there have been positive outcomes for local
populations and marginal groups (Ministry of Foreign Affairs of Denmark 2020), this
can, unfortunately, not be assumed. A recent assessment of numerous donor-
financed adaptation and vulnerability-reduction programmes found that some
programmes not only failed to reduce vulnerabilities, but in some instances even
exacerbated them (Eriksen et al., 2021).
6. For those affected, project funding dominates.

We have also examined modalities of Danish adaptation support. Modality describes
the manner in which finance is disbursed, and here we look specifically at core
funding and project funding. Research on adaptation and debates on devolved
finance emphasise the importance of predictable, long-term funding to support
planning and institution-building, both crucial to successful adaptation in the long
term (Funder et al., 2020; Soanes et al., 2021). This suggests the importance of core
funding or other modalities that are provided over a longer time frame and with a
higher level of discretion than project funding. However, Danish adaptation support
to those affected – partner countries and intended beneficiaries within them – is
solely provided as project funding.
This is not to say that Denmark does not provide core funding. In fact, 38% of Rio-
marked Danish adaptation support in 2018 was provided as core funding. Yet this
modality was used only for international organisations, including multilaterals,
international NGOs and a think tank. If also counting imputed multilateral shares
provided to multilateral institutions, this number would be even higher. This contrast
in who receives different funding modalities is striking, and it will be important to
consider how Denmark can shift towards longer-term funding modalities to support
those affected by climate change. While institutional frameworks to support core
funding for those affected, particularly sub-nationally, are in many cases lacking,
Danish adaptation support could be geared towards supporting the development of
such institutions, building on experiences from countries like Kenya and India.
7. Channel of delivery affects who is targeted.

Figure 9 below considers who is targeted within different channels of delivery in
Danish adaptation support. The two columns represent different channels of
delivery. The first is national entities, or bilateral engagements, where Denmark
channels adaptation finance through national entities in its partner countries. The

Figure 9. Targeting within different channels of delivery in Danish
adaptation support
100
90
80
70
60
50
40
30
20
10
0
National entity Multilateral
(Bilateral)
■ Not assessed ■ Marginalised

■ National governments ■ Private sector
■ Sub-national governments ■ NGOs
■ Communities/community organisations ■ Other
second is multilateral institutions, for instance UNDP, FAO, and IBRD, among others.
Though again, this does not include commitments to multilateral institutions that
do not have a Rio marker.
These two different channels of delivery – Rio-marked bilateral and multilateral –

evidence significant differences in who they target, indicated by the coloured bars
within each column. All bilateral commitments reviewed targeted either marginalised,
communities/community organisations or sub-national government. They had,
thus, a clear focus on those on the frontlines of adaptation, a promising finding for
devolution. In contrast, adaptation finance channelled through multilateral
organisations are much more mixed, for instance also targeting national
governments and the private sector. A few commitments were not reviewed, either
because access to project documentation was lacking or commitments were core
funding, and it was not clear which entities were targeted. These are included as ‘not
assessed’.

These clear differences in who is targeted in Denmark’s bilateral and multilateral
adaptation commitments may suggest differing strengths and comparative
advantages of these two channels of delivery. This finding also provides important
input for decisions on how to direct additional adaptation finance in the coming
years. Decisions on how to channel adaptation finance have clear implications for
who the beneficiaries are, and there is already marked contrast in the share of
finance directed bilaterally (15%) and multilaterally (26%).
GOVERNANCE CONSIDERATIONS AND DANISH ADAPTATION SUPPORT.
The governance considerations for devolution presented ealier also provide

important considerations for Danish and other donor adaptation efforts going
forward. Here, we link these considerations to current trends in Danish adaptation
finance and the key findings above. We group the governance considerations into
three thematic focus areas for approaching devolution efforts in Danish adaptation
support going forward: i) engaging with governance structures; ii) fostering inclusive,
participatory decision-making; and iii) ensuring predictable financing. Through
attention to these three areas, further discussed below, Denmark can take significant
steps towards supporting devolution in its adaptation support. This analysis also
illustrates how the governance considerations can be a useful tool for donors and
development actors in improving meaningful devolution in their adaptation support,
see Box 4.

Box 4. Governance considerations for devolved Danish adaptation support
Engagement with government structures
Governance Engagement in these governance considerations will require differing

considerations approaches depending on the channel of delivery of adaptation support. In
bilateral adaptation support to Danish International Development Agency
(DANIDA) partner countries, it will require close partnerships. Working
1. Subsidiarity towards these factors entails political and institutional work that is difficult
to carry out without a strong relationship with country partners and mutual
2. Integration in local trust. In addition, it requires knowledge of the specific climate, development
government planning and political context, as mechanisms for devolution and integration should
and decision-making reflect the specific governance context. A point of departure should be the
partner country’s own vision for securing a supporting institutional
4. Devolution of landscape for devolved adaptation finance, for instance as promised in
decision-making LDC’s Vision 2050, where LDCs pledged ‘Strengthening the role of local
over climate finance government and actors to revitalise existing decentralisation structures
and ensure subsidiarity in climate decisions’.
7. Supportive national
policy environment However, bilateral adaptation support was only a small share of
commitment amounts in 2018 (15%). A much larger share of adaptation
finance went to multilateral organisations and INOGs (a combined 62%). If
Denmark decides to promote devolution in its support to adaptation, it will,
therefore, be critical to actively engage with multilateral and INGO partners
to encourage their engagement with these governance factors as well.
Fostering inclusive, participatory decision-making
Governance Fostering inclusive, participatory decision-making will be crucial for

considerations addressing the needs of those affected by climate change, especially the
most marginalised. In bilateral support, this suggests the need for a
revitalised focus on democratic processes and inclusive decision-making,
3. Spaces for public which also requires close collaboration with partner countries.
deliberation and
participation Here, the role of INGOs in particular should also be explored, as they
receive a major share of Danish adaptation finance and can be well-
5. Decision-making situated to foster inclusion and participation locally, including with
informed by local marginal populations. However, it will be vital to institutionalise successful
knowledge and needs models for inclusive, participatory decision-making and integrate them
with local governance processes so that these are sustainable beyond a
specific project or adaptation engagement and contribute directly to local
decision-making.
Support to inclusive, participatory decision-making should also look

beyond the local level to consider how such input can also be channelled
upwards into decision-making at higher administrative levels. This could
improve vertical integration of local knowledge and needs into adaptation
planning.
Providing enabling financing
Governance As indicated previously, Danish bilateral adaptation support is entirely

considerations project-based. This raises important questions on feasibility of building the
necessary institutional structures and capacity that can support devolved
adaptation finance and governance in the long term. Considering other
6. Predictability of funding modalities, in consultation with partner countries, as well as in
financial flows coordination with other donors (Lundsgaard et al., 2021), will be relevant
here. Lessons can be gathered from the models discussed earlier.
Engagement with multilateral partners will also be important, as a major

share of Danish adaptation support is channelled through multilateral
actors. Here, Denmark can both engage to support increased predictability
in multilateral approaches as well as gain learning, for instance on existing
models and best practises. Relatedly, engagement with international
climate funds and predictability in their funding mechanisms will also be
important as these funds increasingly disperse adaptation finance.

WAYS FORWARD

Global climate change adaptation efforts have entered ‘a new era of adaptation
implementation’ (Adaptation Watch, 2017:5) in recent years. Previous focus on
securing finance and establishing the rules of the game has given way to greater
focus on how and where funds will be used. Yet in many countries, it remains
unclear how exactly adaptation implementation will take place. Instead, governance
actors are building the plane while flying, devising adaptation policies, programming
and institutional arrangements as they also attempt to manage severe climate
change impacts. Many LDCs not only lack financial resources but often also the
political inclination and institutional environments to facilitate successful
decentralised climate change adaptation outcomes. We have, therefore, reached a
watershed moment for global adaptation efforts, where laying solid institutional and
governance foundations will be crucial for enabling durable, devolved adaptation on
the ground.
Recently enhanced international attention to implementation of climate change

adaptation is likely to elevate devolution on the agenda, the strongest argument
being that devolving governance and finance of climate change adaptation is likely
to offer significant benefits for both donors and recipients. This study identifies and
discusses four drivers of devolved adaptation, including influential international
policy think tanks, the World Bank’s PPCR programmes, International NGOs and a
few LDC national governments with elaborate climate change adaptation policies
and strategies. Principles for Locally Led Adaptation promoted by the Global
Commission on Adaptation were endorsed during the Climate Adaptation Summit
in January 2021. This marks a shift in international climate diplomacy from a focus
on establishing the rules of the game to a greater focus on implementation
modalities.
With inspiration from the LLA principles, the study identifies and further unpacks the
governance aspects of devolved finance for climate change adaptation and
subsequently uses them to assess four models used by international donors to
support devolved finance for climate change adaptation. We draw the following
conclusions and perspectives.
■ The justification for subsidiarity is its perceived political and economic

advantages for enhancing representation and efficiency of service delivery. All
four models score high on subsidiarity, reflecting a concerted effort to embed
adaptation planning in local government structures. However, in all four models,
the inclusion of sub-local government stakeholders is unevenly implemented.

■ Not surprisingly, the two models where a high degree of decision-making is
devolved to existing decentralised government institutions (LoCAL and CCCF)
are well-integrated in local government planning and decision-making. In both
cases this can be explained by clear incentives for local government and clear
and transparent procedures for accessing funds for climate change adaptation.
For the two models that did not score highly for this aspect (PPCR and ALP),
integration in local government planning was complicated by criteria set by
outside donors (World Bank and CARE International).
■ Sub-local government spaces for public deliberation and participation are

important for ensuring that voices of all local stakeholders are included in the
planning and implementation processes. The reason why the ALP model scores
very high in this governance aspect is likely to be the active facilitating role played
by CARE International. The low score in the three other models illustrates the
hesitancy of local government political leaders to voluntarily devolve decision-
making over financial resources to lower tier institutions.
■ Two local government-based models (LoCAL and CCCF) score high on devolving
of decision-making over climate change adaptation finance. Local Government
institutions have extensive control over financial resources within the framework
for invited political space set by the models. The PCR and ALP models score low
on devolution of decision-making as local decisions in practise have to be
approved by external higher-level institutions.
■ The ALP and CCCF models score high on decision-making informed by local
knowledge and knowledge needs. In both models, planning is based on locally
generated information and analysis regarding climate vulnerability and hazards.
The two other models (PPCR and LoCAL) are primarily based on the technical
knowledge of local government bureaucrats.
■ The last governance aspect, supportive national policy environment, is highly

contextual and dependent on national political support for reforming and
implementing decentralisation policies. The programmes (LoCAL and CCCF)
situated in Mozambique and Kenya score high due to their ongoing reform
process, while the programmes situated in Zambia and Ghana (PPCR and ALP)
score low because of slow policy implementation and central ministry resistance
to relinquishing power in these countries.

Denmark may have much to offer in support for devolved climate change adaptation,
e.g. in its long experience with decentralisation generally and the strengths of its
adaptation engagement. Drawing on findings from the recent Evaluation of Danish
Support to Climate Change Adaptation (Ministry of Foreign Affairs of Denmark
2020), locally based initiatives were found to be better able to reach marginalised
and vulnerable groups. These strengths of devolved adaptation finance may be
relevant to considerations of how Danish adaptation finance can be used best, e.g.
in concrete discussions around pathways of delivery. These considerations are also
relevant in discussions of where Denmark can contribute best to a crowded
landscape and where its strengths lie, also in relation to shaping international
agendas.
Denmark may have much to offer in support for devolved

climate change adaptation, e.g. in its long experience with
decentralisation generally and the strengths of its adaptation
engagement.
In this context, Denmark’s possible engagement with this international landscape

should take into consideration the heterogeneity among actors and approaches to
devolved finance. This study identifies and discusses four promising models for
devolved governance and finance of climate change adaptation. Each, in its way,
works with central and local governments to enhance general fiscal decentralisation
and associated devolved decision-making to provide domestic budgets for devolved
climate finance and incorporates this in national climate laws and policies.

NOTES.
1 OECD (2020), Climate Finance Provided and Mobilised by Developed Countries in
2013-18, OECD Publishing, Paris, https://doi.org/10.1787/f0773d55-en
2 Oxfam Shadow Report. https://oxfamilibrary.openrepository.com/bitstream/han-
dle/10546/621066/bp-climate-finance-shadow-report-2020-201020-en.pdf
3 Solar energy, enhanced energy efficiency, sustainable habitat, water, sustaining the
Himalayan ecosystem, green India, sustainable agriculture and strategic knowledge for
climate change.
4 Agriculture, horticulture, agroforestry, environment, allied activities, water, forestry,
urban, coastal- and low-lying systems, disaster management, human health, marine sys-
tem, tourism, habitat sector and other rural livelihood sectors to address climate change
related issues.
5 For more information see: FP024: Empower to Adapt: Creating Climate-Change Resilient
Livelihoods through Community-Based Natural Resource Management (CBNRM) in
Namibia | Green Climate Fund.
6 The endorsement can be found here: https://files.wri.org/s3fs-public/uploads/
Locally_Led_Adaptation_Principles_-_Endorsement_Version.pdf
7 Information on county level vulnerabilities, hazards and risks, as well as actions taken to
address them.
8 As an example, the 1% of annual development budgets set aside for climate change
activities amounted to 85 million KES for Makueni County (approx. USD 750,000)
(Odhengo et al., 2019).
9 This distinction is presented by the ‘Joint Report on Multilateral Development Bank’s
Climate Finance’, and further elaborated by the CPI and IFAD in their joint report:
‘Examining the Climate Finance Gap for Small-Scale Agriculture’, where the first recipient
is the actor specifically targeted with the financial flow and the final beneficiary are the
actors ultimately (or indirectly) benefitting from the flow of funds.
10 https://www.iied.org/climate-finance-not-reaching-local-level
11 https://www.ifad.org/en/web/knowledge/publication/asset/42157635
12 OECD (2020), Climate Finance Provided and Mobilised by Developed Countries in 2013-
18, OECD Publishing, Paris, https://doi.org/10.1787/f0773d55-en
13 https://pubs.iied.org/pdfs/10178IIED.pdf
14 For additional information, see the ‘Methodological Note of the OECD-DAC Climate
Related Development Finance Databases’: https://www.oecd.org/dac/financing-
sustainable-development/development-finance-data/METHODOLOGICAL_NOTE.pdf

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ANNEX 1. METHODOLOGY USED BY IIED,
CPI AND IFAD TO ESTIMATE
PROPORTION OF DEVOLVED FINANCE
FOR CLIMATE CHANGE ADAPTATION
When UNFCCC’s so-called ‘Annex II countries’ report climate finance towards the
USD 100 billion goal, they do so in their Biennial Reports. These reports, however,
provide very limited information as to where and how the funds are provided, which
is why researchers often turn to climate finance data presented by the OECD. While
the OECD data on climate-related development finance provides the most extensive
source of information on global climate finance flows, the information on devolved
climate finance is lacking. The first recipient of climate finance is well documented
whereas information on the final recipient is not.9
To work around the inadequate aggregated source data of the final recipient, several
reports resort to a word search in project documents to discern whether the project
reaches the local level or not, such as the 10%10 calculated by IIED and the 1.7%11 of
climate finance reaching small-scale farmers as calculated by CPI and IFAD.
However, the IIED word search of project documents only cover a small share of
international climate funds’ climate finance allocation to local level implementation
between 2003 and 2016. The international climate funds committed USD 17.4
billion during that period but only 7% of the projects approved were sufficiently
transparent to analyse/apply a word search for locally led significance. As such, the
presented percentage is based on USD 1.2 billion of the total provision of climate
finance between 2003 and 2016. Comparatively, nearly USD 60 billion climate
finance was reported in 2016 alone.12
The necessary global reporting modalities are simply not yet established to
accurately calculate the share of climate finance which reaches the local level/is
devolved. The 2017 working paper from IIED13 presents these limitations in their
annexes, rightly concluding that the presented figures are indicative at best for the
small proportion that is international funds (not total climate finance) due to lack of
relevant data and in-depth analysis of all project documents.

ANNEX 2. NOTES ON METHODOLOGY
FOR THE ASSESSMENT OF DANISH
ADAPTATION FINANCE
This study draws on OECD DAC Climate-related development finance dataset 2018.
We have also removed all commitments where adaptation was not scored as
principal or significant according to the Rio markers. This means that imputed
multilateral contributions, which are not given a Rio marker, are not included.
Imputed multilateral contributions ‘are calculated by estimating, per international
organisation, the climate-related share within its portfolio and attributing it back to
bilateral providers, based on their core contributions (disbursements) to the
organisation in a given year.’14 Denmark’s adaptation support channelled through
multilateral contributions is, therefore, even higher than indicated in this analysis.
We have also removed specific research and evaluation projects marked as
adaptation in order to focus to a higher degree on adaptation practise and
international engagement.
After compiling the data as described above, we subsequently conducted a

document review of remaining commitments, drawing on programme descriptions.
We have looked at who is responsible for implementation of adaptation activities
‘implementing entities’ and marked as many as were relevant among the following
categories: international organisation, national government entity, sub-national
government entity, consultant, NGO, other entity. We have also looked at who is
targeted, or the intended beneficiaries, again marking as many as were relevant of
the following categories: national government entity, sub-national government
entity, communities/community based organisations (CBOs), marginalised, private
sector/SMEs, NGOs, other. We were not able to access project documentation for
16 of the 51 commitments, so these were not assessed. There is, therefore, a gap in
the data set, though these commitments were generally spread out across the data
set in terms of channel of delivery, which should minimise any impact on the
findings. The only category for channel of delivery that was more affected by lack of
project documentation was that of ‘third country government (delegated
cooperation)’ where three of three commitments were not scored due to lack of
access to the documentation. Yet this group of commitments represents a very
small part of Denmark’s adaptation efforts and would, therefore, not significantly
affect our findings.

We have attempted to communicate these uncertainties in the data, both in the text
and figures as well as through this methodological discussion. As also mentioned
under the heading Ways Forward, it is important to note that this assessment is
limited by available information on adaptation financing, as no current international
reporting mechanism includes reporting on devolved finance, for instance in-country
disbursements or on-lending. UNFCCC data provides only recipient country, while
OECD DAC data provides both recipient country and ‘channel of delivery’, which
specifies the initial recipient, for instance central government, donor or developing
country-based NGO, various international institutions, or teaching or research
institutions, among others.

Photos.
Cover: Alexander Bee/Alamy Stock Photo
Page 8-9: Paul Ellis/AFP/Ritzau Scanpix
Page 16-17: Johnny Greig/Alamy Stock Photo
Page 24-25: Jake Lyell/Alamy Stock Photo
Page 34-35: Eddie Gerald/Alamy Stock Photo
Page46-47: AGF Srl/Alamy Stock Photo
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DIIS REPORT 2022: 02

DEVOLVED FINANCE AND GOVERNANCE

Esbern Friis-Hansen, Lily Salloum Lindegaard,

DIIS · Danish Institute for International Studies.

Layout: Lone Ravnkilde.

ISBN print: 978-87-7236-071-3 print.

DIIS publications can be downloaded free of charge or ordered from www.diis.dk.

Devolved adaptation finance and governance. 9.

Drivers of devolved adaptation finance and governance. 17.

Governance of devolved adaptation finance. 25.

Models of devolved adaptation finance and governance. 35.

Danish support for devolved adaptation finance. 47.

Ways forward. 61.

Annex 1. Methodology used by IIED, CPI and IFAD to estimate 72.

Annex 2. Notes on methodology for the assessment of 73.

4 DEVOLVED FINANCE AND GOVERNANCE OF CLIMATE CHANGE ADAPTATION

DEVOLVED FINANCE AND GOVERNANCE OF CLIMATE CHANGE ADAPTATION 5

6 DEVOLVED FINANCE AND GOVERNANCE OF CLIMATE CHANGE ADAPTATION

DEVOLVED FINANCE AND GOVERNANCE OF CLIMATE CHANGE ADAPTATION 7

DEVOLVED FINANCE AND GOVERNANCE OF CLIMATE CHANGE ADAPTATION 9

As funding and implementation surge, it will be crucial to

Attention to sub-national levels is noticeably emerging as a key aspect of ensuring

Recognition of the significance of devolved adaptation comes in the midst of a shift

10 DEVOLVED FINANCE AND GOVERNANCE OF CLIMATE CHANGE ADAPTATION

WHY DEVOLVED ADAPTATION?

DEVOLVED FINANCE AND GOVERNANCE OF CLIMATE CHANGE ADAPTATION 11

However, despite the importance of sub-national actors being recognised in

12 DEVOLVED FINANCE AND GOVERNANCE OF CLIMATE CHANGE ADAPTATION

STATUS OF CLIMATE CHANGE ADAPTATION FINANCE.

Figure 1. Climate finance provided and mobilised (USD millions)

Bilateral public Multilateral public Export credits Mobilised private

LDC adaptation funding Total LDC funding

DEVOLVED FINANCE AND GOVERNANCE OF CLIMATE CHANGE ADAPTATION 13

14 DEVOLVED FINANCE AND GOVERNANCE OF CLIMATE CHANGE ADAPTATION

DEVOLVED FINANCE AND GOVERNANCE OF CLIMATE CHANGE ADAPTATION 15

DEVOLVED FINANCE AND GOVERNANCE OF CLIMATE CHANGE ADAPTATION 17

Research points to the importance of establishing systems for the transfer of

CATEGORIES OF ACTORS AND DEVOLVED ADAPTATION MODELS.

18 DEVOLVED FINANCE AND GOVERNANCE OF CLIMATE CHANGE ADAPTATION

■ to support specific national and local climate change adaptation activities .

■ to strengthen climate responsive development planning at national and sub-

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BOX 1. INDIA’S NATIONAL ACTION PLAN ON CLIMATE CHANGE.

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The principles of Locally Led Adaptation formulated by the

In addition to the actors described above, it is important to note that attention to

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22 DEVOLVED FINANCE AND GOVERNANCE OF CLIMATE CHANGE ADAPTATION

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■ a principle on subsidiarity (devolving decision-making to the lowest

■ three common principles of good governance (ensuring transparency and

■ a statement of climate change knowledge (building a robust understanding

■ two principles relating to finance (providing patient and predictable funding

■ and a broad normative development aim (addressing structural inequalities

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SEVEN GOVERNANCE CONSIDERATIONS FOR DEVOLVED ADAPTATION.

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While some fieldwork based studies on local governance of climate change

2. Integration in local government planning and decision-making.

28 DEVOLVED FINANCE AND GOVERNANCE OF CLIMATE CHANGE ADAPTATION