ACTIONS THAT WILL MAKE THE DIFFERENCEFor policy makers in developing countries:

• Usemulti-yeardevelopmentplanningprocessesasavehicleto systematically incorporate green objectives into nationaland sectoral plans and budgets. This requires effectivegovernanceandmechanismstoprovideenvironmentalinputintonationalprocesses.

• Environmentministriesmusthave theskills tocompete forfinancialresourcesastheyshiftfromprojectfundingtofundsthatarepooledinsectorornationalbudgets.Ministriesmustbeabletomakethecasefortheenvironmentintermsthatbudgetplannersunderstand.

• Encourage the participation of non-government actors toengage in the planning processes to create accountability,facilitate learning and incorporate citizens’ rights. Thisparticipation should go beyond simple consultation to realengagement.

• Build functional and technical skills, including a goodunderstanding of what the basic elements of the nationalplanning process are, as well as how to collect robustanalytical data to support the case for integrating theenvironmentintonationaldevelopmentplans.

• Planand targeteffortscarefully.Plan for the longhaul,buttargetearlyeffortstowherethemostdifferencecanbemade.

For development assistance providers:

• Havecapacitydevelopmentfortheenvironmentunderpinalldevelopmentsupportatalllevelsofdesign,implementationandvaluation

• Collaborate across domestic agencies to exploit theircomparativeadvantages.

• Harmonise approaches among development assistanceproviderstoensureeffectiveprogrammedelivery,facilitateexchangeofinformationandavoidduplicatedefforts.

• Nurture localownership tosecure interest,oversightandmanagement of development support to address theenvironmentalchallengesofthedevelopingcountry.

• Focus on results to enable developing countries to learnlessons and identify new and emerging environmentalissues.

• Implement best practice guidelines to understand keyprinciples and tools required to deliver effective supportto integrating capacity development for environment intonationalsystems.

• Assess their own capacity needs required in order toeffectively provide support to developing countries onenhancedcapacityforenvironmentalgovernance.

In developing countries, environmental resources and services make a vital contribution to economic growth and well-being,accountingforanestimated26%oftotalwealth;thiscomparesto2%inindustrialisedcountries.Inaworldfacingthepressuresofagrowingpopulation,climatechangeandincreasingrisksoffoodshortages,economicgrowthbasedontheunsustainableuseofnaturalresourcesisnolongerviable.Greeningthedevelopmentpathisthereforecrucial.

A lackofcapacity forenvironmentalmanagement isakeyobstaclepreventingdevelopingcountries frommoving toagreenerdevelopmentpath.Overcoming thiswill requireenhancingcapacity for:monitoringandcollecting informationonenvironmentaldegradation,conductingenvironmentalriskassessment,makingtheeconomiccaseforgreeningdevelopment,facilitatingcross-sectoralco-ordination,andimplementingenvironmentalfiscalreform.

CONTACT INFORMATIONFormoreinformationcontact:RemyParis(remy.paris@oecd.org)orMichaelMullan(michael.mullan@oecd.org)

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ENHANCING CAPACITY – A MISSING LINK IN GREENING DEVELOPMENTFebruary2012

A FIVE-STEP FRAMEWORK FOR ENHANCING CAPACITY FOR GREENING DEVELOPMENT AT THREE LEVELS

Greening development demands innovative approaches that engage all stakeholders in shaping national policies and investmentdecisions.A five-step framework has been developed to guide capacity development efforts at the levels of national developmentplanning,budgetaryprocessesandinkeyeconomicsectors:

1. Assess the political and institutional context,byconductingananalysisof thenationalcontext,understanding incentivestructuresandgainingfamiliaritywithcountrylevelanalysisofnaturalresourceconstraintsandopportunities.

2. Identify key actors and their capacity development needs,suchasgovernmentofficials,privatesectorrepresentativesandmembersofcivilsocietygroups,recognisingthepoliticalandeconomicdimensionsthatinfluencestakeholders.

3. Identify opportunities to shape organisational incentives, includingfindingentrypoints,settingprioritiesandoutliningtheappropriatetimescale,targetsandresourcesneeded.

4. Identify awareness / knowledge needs and existing analytical tools,raiseawarenessoftheroletheenvironmentplaysinachievingeconomicdevelopment,becomingfamiliarwithexistingknowledgeproductsandadoptingandusingtechnicaltoolstomaketheeconomiccaseforenvironmentalprogrammesandmeasures.

5. Identify options for policy response, rangingfromrevisedprioritiesandimplementationstrategiestospecificenvironmentalmanagementmeasuresandinvestments.

Developing country contexts vary tremendously.Any approach to building and enhancing capacity for greening developmentmusttherefore be flexible by design and shouldmake use of countries’ own systems.Assistance providers should target their capacitydevelopmentinitiativesatweaknessesinexistingenvironmentalmanagementindevelopingcountriesandfostercollaborationbetweenfinance, planning and environmentministries aswell as other stakeholders involved. Examples of issues for domestic actors anddevelopmentassistanceproviderstoconsiderwhengreeningnationalbudgetprocessesareoutlinedinthetablebelow.

Since2009,theOECDDevelopmentAssistanceCommittee(DAC)andEnvironmentalPolicyCommittee(EPOC)have,incollaborationwithdevelopingcountryexperts,workedtogethertoproducetheguidanceGreening Development: Enhancing Capacity for Environmental Management and Governance.Itisavailableat:www.oecd.org/dac/environment.

The capacity needed Enabling environment Organisational level Individual level

Stakeholders understandthe importance ofenvironmental issues

Stakeholders involved in theinstitutional process forpreparing national budget

Finance ministry hasincentives and mechanismsto assess economic value ofenvironmental policies

Finance staff are aware of economicvalue of environmental policies andprogrammes

Environment agenciesformally involved in nationalbudget process

Finance ministry agrees on roleof environment agency inbudget process

Finance and environmentofficials understand howenvironment stakeholdersmay participate

Environment staff understand howbudget process works and how toengage effectively

Analyse links betweenenvironment anddevelopment – make theeconomic case

Budget allocations to spendingministries in accordance withnational plan and priorities

Finance ministry hasincentives to includeenvironmental priorities andmeasures in budgetformulation

Environment staff skilled in economicvaluation, programme costing andstating the environmental case tobudget officials

Formulate environmentalmanagement measures andenvironmental fiscal reformin budget

Budget process includesenvironmental managementmeasures, environmental fiscalinstruments, subsidy reform

Environment agencyparticipates effectively indrafting budget proposals andfinance ministry adopts itsguidance

Environment staff can analyse andcommunicate benefits of budgetedenvironmental measures, economicinstruments, subsidy reform

Environment-developmentindicators and monitoringmechanisms used

A well functioning national auditsystem promotes soundexpenditure management in allgovernment agencies

Environment and lineministries have managementsystems to disburse fundsefficiently to meet policypriorities

Environment staff skilled in projectscreening, management andmonitoring/evaluation skills