Dark clouds are gathering over adaptation finance. The US has all but stopped providing it and European countries are slashing their aid budgets to spend more on their militaries. Much of what is flowing comes in the form of loans and doesn’t reach the most vulnerable, as we’ve reported. Over the years, one bright spark has been the Adaptation Fund and its grants to developing countries for pioneering work in communities. It has allocated $1.6 billion to 226 projects, benefiting 90 million people, its website says. And, while rich nations are failing to give the fund all the money it needs to finance its growing pipeline, new revenues are supposed to come in from the Paris Agreement’s new carbon market, known as Article 6.4. Back at COP26 in Glasgow, governments agreed that the Adaptation Fund should get 5% of the proceeds from all Article 6.4 carbon credits – other than those based in small islands and least developed countries. How much money that will amount to is uncertain. It depends on how many projects there are and the price of their credits. The fund got over $200 million from a similar share of proceeds under the Kyoto Protocol’s Clean Development Mechanism (CDM), although the price of those credits collapsed. While $200 million was a disappointment as ten times that was expected, the Adaptation Fund head Mikko Ollikainen told Climate Home News in Bonn that the sum was ‘not insignificant’. By comparison, the fund has been seeking $300 million per year from donor governments in recent years. Hopes are that the CDM’s successor will yield bigger sums for adaptation. But for the fund to get its hands on the share of cash it is expecting from Article 6.4 projects , governments need to agree to transition the fund to ‘exclusively’ serve the Paris Agreement. They are hoping to wrap up those talks in Bonn this week, so that they can rubber-stamp the decision early at COP31. Jun 15, 2026 News Bonn Bulletin: Finance dominates discussions in every room Lack of progress on finance issues – including putting a number on the new goal to triple adaptation funding – is causing blockages across negotiating tracks at UN climate talks Read more Jun 12, 2026 Sponsored Climate adaptation helps African nations tackle rising conflict over resources The growing overlap between insecurity and climate vulnerability is forcing governments and development agencies to rethink adaptation efforts Read more It has not been plain-sailing. As small islands’ lead negotiator Anne Rasmussen told a press conference on Tuesday, this transition ‘is being blocked, frustrating efforts to replenish the fund and ensure that the crucial adaptation finance can flow to those that need it the most’. The African Group’s chair Antwi-Boasiako Amoah later said he was ‘alarmed’ that adaptation finance was being ‘held hostage’. The problem is related to who is considered a developed country at UN climate talks, with the responsibilities for providing climate finance that designation implies. Traditional donor countries, which have been pushing for years for some wealthier developing countries like Saudi Arabia and China to contribute to climate finance as well, want the Adaptation Fund’s board seats to be split between ‘developed’ and ‘developing’ countries. They argue that these are the categories referred to in the Paris Agreement and so are appropriate for a fund that exclusively serves that accord. Developing countries – which have long opposed any of their members being considered developed – argue that the board seats should continue to be split between ‘Annex 1’ and ‘non-Annex 1’ countries. These categories, based on lists of nations drawn up in 1992, are more rigid than ‘developed’ and ‘developing’. While development status can change over time, you’re either on the Annex 1 list or you’re not. Ollikainen said a delay in agreement beyond COP31 – a risk if the issue is not resolved here in Bonn – would harm people in the real world where adaptation needs are rising sharply while the money to protect them from worsening climate impacts is not. ‘If we don’t address adaptation,’ the fund’s head told Climate Home News, ‘that will lead to loss and damage and that’s going to be even more costlier than adaptation – and the cost will be borne by people who have done least to cause this problem who typically don’t have social safety networks to support them.’ This, together with other doubts over finance, have led small island nations ‘to question whether the implementation of the NCQG [the 2035 finance goal agreed at COP29] is dead on arrival’, their chief negotiator Rasmussen said. African chair defends veto power of climate talks The consensus-based system of UN climate talks, where any country can in theory veto agreement on a decision, has caused much frustration among climate campaigners and many negotiators who see it as leading to lowest-common-denominator outcomes. This frustration led to the Santa Marta conference on transitioning away from fossil fuels in April which was attended by around 60 nations – including nine African states. That came after progress on the issue was blocked by big fossil fuel-producing countries at COP29 and COP30. Researchers discuss transitioning away from fossil fuels during the Santa Marta summit in Colombia, April 2026. (Photo: Colombia Ministry of Environment and Sustainable Development) But on Tuesday in Bonn, the chair of the African Group of Negotiators, Antwi-Boasiako Amoah, whose own nation Ghana was among the nine African states in Santa Marta, said ‘minilateral processes’ – none of which he named – lack legitimacy. He said ‘Africa stands unequivocally for multilateralism’ and will not accept ‘processes that undermine consensus’. He added that ‘diversion of resources and political attention toward minilateral initiatives and coalitions of the willing that lack global endorsement is a direct threat to the multilateral system’. The group of countries in Santa Marta has often been described as a ‘coalition of the willing’. Amoah said that if such processes had any legitimacy, they would be agreed at COPs. And he defended the system of one government being able to veto anything, saying that ‘countries are sovereign, national interests are different, and you cannot sacrifice one party’s interest for another’s’. Asked about the COP Presidency’s electrification goal, he said: ‘If the objective is to enhance implementation and knowledge and create awareness of those initiatives, there is nothing wrong with that.’ ‘But’, he added, ‘if the objective is to have space later on to bring those outcomes into the negotiation process then the starting point is wrong because its selective, its not inclusive and its not based on the agreement of all parties.’ Carbon trading risks undermining climate progress, analysis finds With the long-awaited rulebook for carbon trading under the Paris Agreement finally completed, governments are now showing growing interest in tapping into Article 6. Many rich countries plan on using carbon credits generated in the Global South to meet part of their emission-cutting promises, while many developing nations see the mechanism as an appealing avenue for climate cash. But a first analysis by independent research group Climate Action Tracker (CAT) found that the government’s use of international carbon credits threatens to undermine progress in climate action. CAT assessed the carbon trading arrangements of two leading buyers, Japan and Switzerland, and two sellers of credits, Brazil and Kenya. It called the results of this exercise ‘sobering’. Janna Hoppe, CAT’s Article 6 lead, said buyer countries should only count carbon credits under Article 6 towards their targets if their domestic emissions reduction target is in line with the 1.5˚C limit and they have delivered sufficient climate finance to developing countries. ‘This is certainly not the case for Switzerland or Japan,’ she added. Jun 15, 2026 Carbon markets UN’s first Paris Agreement carbon credits face human rights and climate concerns Civil society groups allege the cookstove project in Myanmar exaggerated its climate impact while maintaining ties with military junta Read more Mar 3, 2026 News EU carbon credits could supercharge world’s clean cooking push, France says The country’s top climate envoy says he discussed using cookstove carbon credits with TotalEnergies, which is working to expand the use of LPG cooking in Africa Read more CAT says Switzerland plans to meet a third of its 2030 emissions reduction target through Article 6 projects, while Japan plans to buy a total of 100 million credits up to 2030 and 200 million by 2040. As their climate plans are not aligned with the most ambitious Paris global warming limit, their use of the carbon trading mechanism is not responsible, the research group concluded. Both countries are sourcing their credits through Article 6.2, which allows bilateral exchange of credits with little oversight, no universally agreed standards and, CAT says, lacks clear environmental or social safeguards. Japan has signed 31 bilateral agreements with countries including Thailand, Indonesia and India under its own scheme, the Joint Crediting Mechanism (JCM), but only a limited number of credits have been generated so far. Last year, a Climate Home News analysis of Japan’s projects – from forest protection to energy-efficient lighting in Southeast Asia – raised questions over the climate benefits and environmental integrity of some of the offsets. As governments bet on carbon trading, Japan’s early scheme spotlights pitfalls The Japanese government did not directly comment on our findings but its latest NDC climate plan says the country’s JCM scheme ‘secures environmental integrity and the avoidance of double counting in line with the international rules, including the Paris Agreement’. Switzerland, meanwhile, has struck 17 agreements with countries including Ghana and Thailand. CAT credited the Swiss government with developing its own safeguards and excluding activities that pose risks to the integrity and durability of the climate benefits of the credits. A programme rolling out electric buses in Bangkok faced criticism over whether the offsets deliver the emission reductions claimed, which the Swiss government rejected. For developing countries selling credits to their richer counterparts, CAT warned about the risk of handing over ‘easy-to-abate emissions’ leaving the project hosts to pursue more difficult and costly emission reductions at home to meet their climate targets. To prevent the same emission reduction units from being counted twice, governments are required to apply a corresponding adjustment to their carbon accounting when trading credits. For seller countries this means that they need to add to their inventories the amount of CO2 savings they transferred abroad. The research group found that neither Brazil nor Kenya has fully assessed how selling carbon credits abroad will impact on their efforts to reach their emissions-cutting targets. The post Bonn Bulletin: Adaptation Fund stalemate puts people at risk, says head appeared first on Climate Home News.