Climate finance and country systems: methodology for review Neil Bird Research Fellow Climate and...

Climate finance and country systems: methodology for review

Neil BirdResearch Fellow

Climate and Environment Programme

Using country systems to manage climate change finance: a Global Forum

2 December2013, Sheraton Incheon Hotel, Republic of Korea

CAPACITY DEVELOPMENT FOR DEVELOPMENT EFFECTIVENESS FACILITY FOR ASIA AND PACIFIC

Purpose of study


• To review whether country systems are being used to manage domestic and international climate change finance across a range of countries

• To identify ways to strengthen country systems to manage domestic and international climate change finance

For all countries:

• National revenues

• Domestic private sector

• Foreign private flows

There are two additional sources for non-Annex 1 countries :

• International climate funds

• Donor funds (bilateral and multilateral)

Sources of climate finance CAPACITY DEVELOPMENT FOR DEVELOPMENT EFFECTIVENESS FACILITY FOR ASIA AND PACIFIC

1. Country ownership is considered central to effective development, and

use of country systems is seen as a key driver of ownership.

2. Well-functioning government institutions are vital for successful

development to occur.

3. Aligning international funding better with government priorities, and

working more closely with government entities, has the potential to

make obtaining better results more likely, not least because it allows

for more cohesive planning processes and a whole-of-government

approach.

4. Country systems influence access options for international climate

finance.

Why is using country systems important?CAPACITY DEVELOPMENT FOR DEVELOPMENT EFFECTIVENESS FACILITY FOR ASIA AND PACIFIC

Country – while ‘country ownership’ is often seen as going beyond the

national government, there is consenus that ‘country systems’ means

state institutions and processes.

Systems – going beyond public finance management and procurement

processes.

Methodology encompasses 4 categories of system:

1.National policy processes

2.Financial management systems

3.Implementation procedures

4.Accountability systems

Definitions: using country systemsCAPACITY DEVELOPMENT FOR DEVELOPMENT EFFECTIVENESS FACILITY FOR ASIA AND PACIFIC

Background to methodological framework


• A broad definition of ‘country systems’ (i.e. beyond financial

systems) is used.

• A country-led understanding of what ‘climate finance’ should

cover (but excluding private sources for now).

• Assess measures related to country system strengthening.

• Existing assessments of the strength and use of country

systems are likely to be adequate for the analysis we are

carrying out/new measures are unlikely to be better.

• Gender-sensitivity of methodology.

Criteria for use of Country Systems by climate finance (CSCF)


Country Systems for Climate

Finance (CSCF) Criterion

Questions for global stock-take

1 Public climate change finance

is focused on results that

meet country priorities

Do major climate change-related funded

programmes appear as priority actions within

national climate change strategies and national

development plans?

2 Public climate change finance

is predictable over the budget

year

Is the credibility of the central government

budget improving with respect to climate

finance?

3 Countries PFM and

procurement systems are

strengthened for the delivery

of climate finance

Does the national budget link to climate change

policy priorities, with systems in place to ensure

timely implementation and reporting?






4 Public climate change finance is

on-budget that is subject to

scrutiny by the national legislature

Does the legislature and its relevant

committees scrutinise government financial

performance, including performance against

climate change-related objectives?

5 Information on public climate

change finance is publicly available

Do mechanisms and modalities that

promote transparency of climate finance

exist?



Country Systems for Climate Finance (CSCF) Criterion Driving questions for global stock-take

Countries systems are strengthened Does the national budget link to climate change policy priorities, with systems in place to ensure timely implementation and reporting?

Gender equality and women’s empowerment is a consideration in public climate change finance delivery

Is the planning and prioritization process for the major climate change related programmes gender aware?

Civil society and the private sector operate within an environment which maximises their engagement in and contribution to climate compatible development

Do policy platforms provide opportunities for all stakeholders to contribute to the process?




6 Gender equality and women’s

empowerment is a consideration in

public climate change finance

delivery

Is the planning and prioritization

process for the major climate

change related programmes gender

aware?

7 Civil society and the private sector

operate within an environment

which maximises their engagement

in and contribution to climate

compatible development

Do policy platforms provide

opportunities for all stakeholders to

contribute to the process?

Country reviews


Early reviews to test this methodology are now being carried out

in five countries:

•Colombia

•Germany

•Indonesia

•Uganda

•United States of America

Country assessments – the context

Annual CO2 emissions (kt)


Country assessments – the context

GAIN index on vulnerability to climate change (rank out of 176 countries)


Increasing vulnerability

Germany – 8

USA – 15

Colombia – 57

Indonesia – 88

Uganda - 134

Spending on Climate Change in Uganda CAPACITY DEVELOPMENT FOR

DEVELOPMENT EFFECTIVENESS FACILITY FOR ASIA AND PACIFIC

Over the 4-year period, 2008/9 to 2011/12, available evidence does not show significant levels of funding to have come from international climate funds.

Criterion 1:Public climate change finance is focused on results that meet country priorities


Climate change is a new policy concern that has matured in the last five years.

Criterion 2:Public climate change finance is predictable over the budget year


Annual predictability of donor funding is also low, with less than half of

relevant committed funds disbursed each year since 2008 .

Budgeted expenditure

(bn Shs)

Outturn expenditure

(bn Shs)

Outturn vs. budget as a percentage

2008/09 96.9 41.5 57.2

2009/10 203.4 53.2 73.9

2010/11 153.6 66.5 56.7

2011/12 136.0 71.8 47.2

Criterion 5:Information on public climate change

finance is publicly available


The challenge is that many climate change relevant expenditures have not

yet been identified within the national budget documentation.

Policy Area and Output

Reporting Period

Budget Expenditure

Weather, Climate and Climate Change

July 2012 to June 2013

The total budget for 2012/13 was Shs 33.0 million funded from central government.

By the end of June 2013 Shs 12.7 million had been spent.

Source: www.budget.go.ug

http://www.budget.go.ug/

Climate finance and country systems


• Studies of how both domestic and international climate finance

uses country systems have just begun.

• Evidence on use and strength of country systems is urgently

needed to inform national and international policy on climate

finance

• Countries will benefit from being able to exchange lessons and

innovation in this regard

• Country assessment and methodology development should be

completed in January 2014

Thank you

Neil Bird

Overseas Development Institute203 Blackfriars Road, London, SE1 8NJ [email protected]

Climate finance and country systems: methodology for review Neil Bird Research Fellow Climate and...

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