The Adaptation Benefits Mechanism (ABM), developed by the African Development Bank has become the first non-market approach registered on the United Nations Framework Convention on Climate Change’s Non-Market Approaches.
Climate change adaptation requires financial support, especially for Vulnerable nations to shift to green energy, and support key economic sectors like health, agriculture, and innovation. A recent report released by the Climate Vulnerable Forum (CVF), the Vulnerable 20 Group of Finance Ministers (V20), and the Bridgetown initiative shows that the climate finance needs of vulnerable countries are likely to exceed $490bn annually by 2030.
Consequently, there is a need to mobilize new and additional public and private sector finance to enhance climate change adaptation action. ABM is an innovative mechanism that will greatly benefit adaptation finance, as it can potentially speed up host countries’ transformation toward low-carbon, climate-resilient, and sustainable development pathways by certifying the value of resilience in terms of benefits and incremental costs.
The Adaptation Benefits Mechanism (ABM) certifies measurable adaptation benefits using strict methodologies and independent verification. It provides transparent data on resilience enhancements, co-benefits, and related financing, aiding in Paris Agreement reporting, SDG monitoring, and ESG frameworks.
By establishing Adaptation Benefits Supply Agreements with information users, the ABM allows project developers to monetize certified benefits, attract investment, and enhance transparency in adaptation costs.
“Tapping into new funding sources and engaging new actors through the ABM will accelerate and scale-up the dissemination of the myriad of new and already existing adaptation technologies and solutions that are not otherwise affordable, especially to those who need them most,” said Prof. Anthony Nyong, Director for Climate Change and Green Growth at the African Development Bank.
He further called upon donors and investors with adaptation commitments to use the ABM to derisk adaptation investments for African project developers and help demonstrate ABM’s full potential.
Uganda submitted the mechanism, which has been piloted across Africa since 2019, to the UNFCCC during the COP29 in Baku 2024, with initial support from Nigeria, Kenya, Madagascar, Benin, Gambia, and Guinea.
International organizations, corporations and government agencies also backed the move, including the West-African Development Bank (BOAD(link is external)), the Center for International Forestry Research and World Agroforestry (CIFOR-ICRAF(link is external)), the Senegal Waste Management Authority (SONAGED(link is external)), SLAMDAM B.V.(link is external), SaniTap(link is external), Allcot(link is external) and Perspectives Climate Research GmbH(link is external).
