The Adaptation Fund has become a fully operational institution for international adaptation finance. We explore different aspects of political economy, addressing the international institutional competition which influenced the decision on operating modalities in the 2007 UN climate negotiations in Bali and which continues to be important for the future of the Fund in international climate finance. From the Adaptation Fund Board (AFB), the governing body of the Fund, this article examines the implications of interests represented by AFB members for key issues such as the prioritisation of countries and decisions on specific projects and programmes. Finally, power relationships around the concrete implementation of projects in developing countries are analysed. While the early stage of the Fund only allows for preliminary conclusions, the article points to some measures the AFB can undertake to address the challenges identified.

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Loss and damage refers to the negative effects of climate variability and climate change that people have not been able to cope with or adapt to. Loss and damage is already a significant -and in some places growing -consequence of an inadequate ability to adapt to changes in climate patterns across the world. Potential future loss and damage depends on emissions, vulnerability, and exposure variables of the impacted human (or natural) system. Today, loss and damage arising from climate change impacts is mostly a local problem, with changes in extreme weather events and slow-onset impacts. Future loss and damage is potentially of inconceivable magnitudeespecially considering non-economic values and the interconnectivity leading to cascading, transnational effects. Addressing loss and damage is important because it will affect how society manages the negative impacts of climate change while pursuing other goals, such as resilient and low-emission development. The potential impacts of unmitigated anthropogenic climate change have significant implications for the current social organisation. Future loss and damage can be limited through the mitigation and adaptation choices that are made today. Mitigation ambitions will largely influence the degree to which loss and damage is averted, particularly from around 2030 * This article has been prepared in the context of the Loss and Damage in Vulnerable Countries Initiative, which is part of the Climate Development Knowledge Network. Responsibility for the content lies solely with the authors. The text is an output from a project funded by the United Kingdom's Department for International Development (DFID) for the benefit of developing countries. However, the views expressed and information contained in the text are not necessarily those of or endorsed by DFID or the members of the Climate and Development Knowledge Network, which can accept no responsibility or liability for such views, completeness or accuracy of the information, or for any reliance placed on them.

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