Minding the Money: Governance of climate change adaptation finance in Nepal
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This is an Oxfam International report. The affiliates who have contributed to it are Oxfam GB and
Oxfam Hong Kong.
First Published by Oxfam International in March 2011
© Oxfam International 2011
Oxfam International is a confederation of fourteen organizations working together in more than
100 countries to find lasting solutions to poverty and injustice: Oxfam America, Oxfam Australia,
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India.
Copies of this report and more information are available at www.oxfam.org and at
Lead Authors: Katie Wiseman and Raju Pandit Chhetri
Contributors: Michel Anglade, Anthony Scott Faiia, Binay Dhital and Prabin Man Singh,
Shanta Upadhyaya and all individuals interviewed
Support: Environment and Public Health Organisation (ENPHO)
Design and Printing: Graphic Plus Printers
Photographs: Oxfam GB Nepal archive
DISCLAIMER
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TABLE OF CONTENTS
TABLE OF CONTENTS I
ACRONYMS III
METHODOLOGY AND LIMITATIONS IV
ACKNOWLEDGEMENTS IV
SUMMARY 1
Outline and purpose of this paper 1
The problem and the need: the big picture 1
Action: the progress, the weaknesses and the challenges 2
Recommendations 4
1. CONTEXT 7
1.1 Poverty, development and aid effectiveness 7
Box 1: Findings from national adaptive capacity... 81.2 Politics and the State 9
1.3 Climate change vulnerability 10
1.4 Land Access and Distribution 11
2. EXISTING AND EMERGING NATIONAL SITUATIONON CLIMATE CHANGE ADAPTATION 12
2.1 International position on climate change 12
2.2 Overview of national structure and programmes 12
Box 2: Findings from National Adaptive Capacity 2010 14
2.3 Technical Assistance Projects and Capacity Strengthening 14
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2.4 Government Policy and Coordination Mechanisms 15
2.5 National Adaptation Programme of Action (NAPA) 15
Table 1: Prioritised Projects under NAPA 17
Figure 1: Framework for NAPA Implementation 18
Box 3: NAPA and National Planning 19
2.6 Strategic/Pilot Programme for Climate .......... 19
Box 4: PPCR Component and Corresponding NAPA ..... 21
Table 2: NAPA and PPCR: overview of key features 23
2.7 Adaptation Fund (AF) 24
2.8 Sources outside the UNFCCC through donor ...... 24
2.8.1 Local Adaptation Programme/Plan of Action (LAPA) 25
Figure 2: NAPA+ and LAPA - a framework for ...... 26
Box 5: Case Study: piloting LAPAs in Nepal from ...... 26
2.9 Civil Society Programmes and Coordination 27
Table 3: Main Climate Change programmes and ...... 29
3. CONCLUSIONS 32
4. RECOMMENDATIONS 36
Figure 3: International climate funding architecture and 38
Figure 4: Proposed Country Level Outline for National 41
REFERENCES 43
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ADB Asian Development Bank
AEPC Alternative Energy Promotion Centre
CDM Clean Development Mechanism
CER Certified Emission Reduction
COP Conference of the Parties
DANIDA Danish International Development Agency
DDC District Development Committee
DFID UK Department for International Development
DHM Department of Hydrology and Meteorology
DP Development Partner
EFA Education for All
EPC Environment Protection Council
EU European Union
FAO Food and Agriculture Organisation
GEF Global Environment Facility
GDP Gross Domestic Product
GNI Gross National Income
GoN Government of Nepal
LAPA Local Adaptation Programme of Action
LDC Least Developed Country
LDCF Least Developed Countries Fund
MCCICC Multi-Stakeholder Climate Change Initiatives Coordination Committee
MDB Multilateral Development Bank
MoAC Ministry of Agriculture and Cooperatives
MoE Ministry of Environment
MoFSC Ministry of Forests and Soil Conservation
MP Member of Parliament
MPI Multi-dimensional Poverty Index
MPPW Ministry of Physical Planning and Works
NAPA National Adaptation Programme of Action
NIE National Implementing Entity
NPC National Planning Commission
ODA Official Development Assistance
OECD-DAC Organisation of Economic Co-operation and Development Assistance Committee
PPCR Pilot Program for Climate Resilience
PIU Project Implementation Unit
SPCR Strategic Programme for Climate Resilience
SWAp Sector Wide Approach
UNDP United Nations Development Programme
UNEP United Nations Environment Programme
UNFCCC United Nations Framework Convention on Climate Change
VDC Village Development Committee
WB World Bank
ACRONYMS
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The research was conducted from October to December 2010. The enquiry was framed by
a global research framework with guiding questions that were adapted for the Nepal context.
A detailed literature review was conducted and quantitative data collated from secondary
sources. This was supplemented by a series of semi-structured interviews with key people
in Kathmandu and the UK with some follow up over email and further interviews. The
draft research was discussed and refined following an Oxfam workshops in Bangkok in
Kathmandu on governance of climate finance.
Detailed qualitative analysis from primary sources was limited by people�s availability and
disclosure of information.
The authors would like to express gratitude to those interviewed for their time and insights.
Support and input was received from Michel Anglade in the Oxfam GB South Asia regional
centre in New Delhi (India), from Anthony Scott Faiia Country Director and from Prabin
Man Singh in the Oxfam in Nepal office. We also thank Environment and Public Health
Organisation (ENPHO) for the support.
METHODOLOGY AND LIMITATIONS
ACKNOWLEDGEMENTS
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OUTLINE AND PURPOSE OF THIS PAPER
This paper hopes to provide the reader witha clear overview of the current situationregarding funding for climate adaptationprogramming and policy in Nepal. It is linkedto an Oxfam global policy brief and series of country researches on the governance of climate
change funding in developing countries. Theresearch is designed to inform Oxfam�s advocacyon how climate change adaptation fundingshould be managed in developing countries sothat it fulfils the goals and needs of themarginalised and most vulnerable communities,with a particular focus on smallholder womenfarmers.
This paper focuses chiefly at the nationallevel, though is cognisant of the great bearing
that decision making and action at theinternational level has, particularly on LeastDeveloped Countries (LDCs). The first sectiondescribes the context looking at poverty, aidand development factors, the current politicalsituation and climate change vulnerability. Thesecond section details the national situation onclimate change adaptation policy andprogramming, highlighting key areas of progress, weakness and challenges. The third
section draws together some conclusions andthe final section presents a set of recommen-dations to key players together with diagramson the financing architecture and a proposedmodel for Nepal.
THE PROBLEM AND THE NEED: THE BIG PICTURE
Despite notable gains in humandevelopment, Nepal remains one of the poorestcountries in the world. Patterns of inequalitypersist. The majority of the population areengaged in subsistence agriculture yet landaccess and distribution are extremely unequaland large parts of the country are uncultivable.Poverty and exclusion were significant driversof the decade-long conflict. The country�s diversetopography, fragile ecosystem and poverty makeit extremely vulnerable to the negative impacts
of climate change.
Women in Nepal tend to have lower statusand heavier workloads. As a consequence Nepalis one of the few countries in the world wherewomen have a lower life expectancy than men.With increasing numbers of men migrating tofind work, the responsibility for feeding thefamily falls to women. Although women makeup the majority of the agricultural labour force
SUMMARY
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they are largely unpaid family workers, withlimited access to land. Poor communities, oftenliving in areas most at risk to floods andlandslides, are already feeling the impacts of climate change. A recent Climate Change
Vulnerability Index calculating vulnerability
to impacts of climate change over the next 30years places Nepal 4th out of 170 countries.1
Nepal is poised at a stage of state transfor-mation. The shift toward a more participatoryand decentralised form of governance and thewriting of a new constitution, offer considerableopportunity. Yet, given more than seven monthsof leadership vacuum and political stalematewhich has only recently shifted with the electionof a new Prime Minister progress is extremely
challenging; impacting significantly on donortrust and the delivery of aid. This is in a countrywhere foreign aid makes up half the nationaldevelopment budget.
ACTION: THE PROGRESS, THE WEAKNESSES ANDTHE CHALLENGES
The urgent need for focused, coordinatedaction to support poor communities to adapt toclimate change is immense and has clearly been
recognised by government and key decisionmakers at the highest level. This can be seenby the considerable progress that has beenmade over the past eighteen months to twoyears on critical areas of climate anddevelopment policy and planning. Against thebackdrop of such huge political domesticuncertainty and slow progress on funding andgovernance at the global level, this is no smallfeat. Significant national level programming isin early stages of development. With the many
positive steps that have been taken, there arestill a number of key weaknesses and challengesahead. These are highlighted below.
KEY AREAS OF PROGRESS
The Ministry of Environment (MoE) hasbeen put forward by government as the clearfocal point on climate change. A new divisionhas been created to lead on climate policyand programming.
The Prime Minister established and headsthe Climate Change Council, tasked withhigh-level policy and strategic oversight. TheCouncil has convened a number of timessince its inception.
The Council has overseen the drafting of aClimate Change Policy, which has beenrecently approved by the cabinet.
National Adaptation Programme of Action(NAPA) has been completed with donorssupplementing Global Environment Facility(GEF) funding to ensure a focus onknowledge management, planning andstakeholder coordination. The process hasbeen credited with being widely consultative,
incorporating strong gender analysis andpaying attention to the structures needed toensure resources reach down to thecommunity level. A multi-stakeholdercoordination forum, web-based informationportal and a knowledge management centrehave been established.
No funding has been committed as yet foridentified NAPA projects but recentindications are that LDCF will have $10 �12 million for Nepal to be split betweenUNDP and UNEP and PPCR will fund someNAPA identified initiatives.
The draft proposal for the Pilot Program forClimate Resilience (PPCR), managed by the
Asian Development Bank (ADB) and WorldBank, has been tentatively approved with afocus on four components. In an effort notto duplicate what had already beenestablished under NAPA, PPCR used thesame thematic working groups for planningand analysis.
There are several active civil society forumsthat are increasingly given seats at the tablein planning and policy processes. Mediaattention is increasing. The Climate ChangeCouncil and main coordination forumestablished under NAPA include a broadrange of stakeholders at the national level,including from civil society organisations.
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1Climate Change Vulnerability Index, Maplecroft, http://www.maplecroft.com/about/news/ccvi.html
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The National Planning Commission hasdeveloped a �climate resilient� nationaldevelopment plan, through a technicalassistance programme supported by the
Asian Development Bank (ADB).
14 donors signed a compact in 2009 toimprove coordination and alignment withgovernment.
A Local Adaptation Programme of Action(LAPA) is being developed as part of NAPA,focused on mainstreaming adaptation at thelocal level and strengthening local and midlevel institutions. The programme is in itspilot phase, funded by the UK Departmentfor International Development (DFID),
outside of government.
KEY AREAS OF WEAKNESS AND CHALLENGES AHEAD
Although set to increase considerably thelevel of financial resources for climateadaptation is still tremendously inadequateto meet current needs.
Lack of faith in the public financialmanagement system means that largeamounts of aid are still off budget and inthe form of stand-alone projects and verticalfunding. This has largely been the same forclimate funding, which is fragmented anddonor driven. There is no mechanism to poolfunding for climate work, although thegovernment is currently working on optionsfor this. National systems are not beingsufficiently strengthened. Establishing aclear picture on climate funding and relatedprogrammes currently, from both donorsand government, is difficult.
An effective institutional framework doesnot currently exist.
MoE is understaffed and under resourced.The set up of a new division to lead on climatechange was not accompanied by thenecessary resources and personnel.
Additionally there is lack of clarity onresponsibilities of key personnel within thedivisions of the ministry. The new climate
change division for example does not haveresponsibility for PPCR.
Over the past two years there have been aseries of donor-funded capacity buildinginitiatives to the Ministry of Environment
and National Planning Commission, largelyin the form of technical assistance throughinternational and national consultants.Sustaining these initiatives beyond theoutputs of consultants and institutionalisingcapacity within the ministry remains achallenge.
Qualified technical personnel and scientificknowledge on climate change and riskmanagement are lacking across government.
Climate risks are not sufficiently consideredand integrated into planning in key sectors.
Although the NAPA process went some wayto addressing this through sector technicalworking groups and vulnerabilityassessments, the gap is still wide. This iscore to some of the components of PPCR andcurrent ADB technical assistance.
The donor compact brought some level of coordination but funding is still largelyunharmonised and unaligned to countrysystems. There is a current danger of furtherfragmentation.
The NAPA plan was completed in Septemberbut there is no funding flowing as yet forprojects.
The Government of Nepal (GoN) expectedPPCR to be used as the financing vehicle todeliver NAPA priorities and there has beena struggle against the rigours of PPCR forit not to be a separate, parallel process.PPCR has faced criticism in country frommany quarters over its lack of flexibility andheadquarter-driven priorities, over whichthere is limited national control. The struggleto not duplicate NAPA�s efforts did result inthe use of the same technical working groupsand it now looks certain that PPCRcomponents will come in to fund some NAPA initiatives.
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The issue of loans as a vehicle for climatefinancing is highly contentious with sharplydivided opinions both for and against. A clear majority of local civil societyorganisations are firmly opposed to loans.The government�s own recently issued
climate change policy clearly speaks of �climate justice� and the principle of �PolluterPays�. It will be a challenge for thegovernment to forge a broader consensus onthis issue taking into account the views of civil society and Nepal�s position as a leadingLDC affected by climate change.
LDCF funding for NAPA projects, if andwhen it comes, will be split between two UNagencies. This will mean extra work for GoN
and MoE to coordinate.
Tension is developing on the funding andmanagement structure for LAPA. The pilotprogramme is contracted out to a UK consultancy firm and implemented by NGOsin Nepal. DFID views LAPA as its funding
vehicle for NAPA, considering a fiduciaryrisk assessment concluded its institutionalfunding could not currently go through MoE.However MoE recently expresseddissatisfaction at the probability that LAPA funding will not come through government.Ensuring that MoE and other keygovernment institutions remain central tothe development and implementation of LAPA is critical.
NAPA and the new Climate Change policystate that 80% of funds will be spent at the
village/municipal level. Ensuring the deliveryof large amounts of resources to the locallevel remains a great challenge. Althoughthere have been improvements in financialmanagement at the local level there aremany bottlenecks at the district level andfiduciary and procurement systems are weak.
Existing funding mechanisms are notdesigned to deliver resources that prioritisethe most vulnerable. Gender and
vulnerability considerations do not seem tomove sufficiently beyond analysis to be built
into implementation and translate intoaction.
Adaptation actions that are happening onthe ground are not being documented andthere is insufficient capacity to share lessons
widely. Learning from LAPA piloting shouldhelp to plug some of this gap but resourcesand capacity are still lacking. Although thereare active civil society forums that areincreasingly being invited into planningspaces, coordination is a challenge and theirlack of legal status limits legitimacy and thepossibility for more effective policy dialogue.
Despite an existing committee under theinterim legislature and an informal MP
network, current political priorities and weaklegislative infrastructure mean that oversightis lacking and that wider ownership andunderstanding outside key executivepositions has not been sufficiently built.
RECOMMENDATIONS
GOVERNMENT OF NEPAL
Immediate areas to address regarding the
organisational structure of Ministry of
Environment and climate change activities
Decide exact mandate of MoE, its role andfunctions and how it will interlink with otherministries, agencies and departments onclimate change. Communicate this withingovernment.
Map existing resources with current andplanned programmes to clearly assess thecapacity gap in terms of financial and humanresources and what would be need to fillthis.
Fill current vacant positions within MoE.
Furthering Climate Change Planning and
Policy
Develop a long -term climate change strategicplan to underpin the climate change policy.
Review current relevant legislation and
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consider where this can be strengthened.Consider drafting of new legislation to betterenforce areas of the climate change policy.
Development of an institutional structure
and national funding entity
Take greater leadership in developing andagreeing a detailed roadmap with milestonesfor expediting the establishment of a nationalclimate finance entity that garners sufficienttrust, is transparent and robust and alignedclosely with national systems. Look to betteraid effectiveness models where these do existand draw lessons for climate funding.
Put forward immediate interim options forchannelling funding through another entity
outside of government that MoE can have arole in terms of administration and oversight.
In the establishment of an institutionalframework develop clear principles andstrategies around promotion of gender andsocial equity, considering how theseprinciples can be reflected within thegovernance structure as well as distributionof resources, thematic areas andprogramming. Build these into anymonitoring and evaluation framework.
Build in windows for on-budget (for publicsector projects) and off-budget (for civilsociety projects).
Ensure these processes incorporate broadconsultation and progress towardsdeveloping the institutional framework iscommunicated widely to stakeholders.
Develop detailed terms of reference and cleararrangements for decision making bodiesand coordination fora under government.Clarify how the MCCICC, Climate ChangeCouncil, Climate Change KnowledgeManagement Centre and planned ClimateChange Centre will interact and coordinate.
Oversight and Accountability
Revive the Natural Resources andEnvironment Committee with dedicatedresources, ensuring cross party expertise.
Conduct information sessions in parliamenton key climate change issues, programmesand policy.
DONORS
Capacity Building InitiativesJointly commission an external independentreview of current capacity building initiativesto assess areas of progress and weaknessand make recommendations going forward
Re-examine the current fragmentedapproach to capacity building and work
jointly on pooling assistance, using therecently approved Climate Change Policy asan overarching framework from which to
develop a convergent long term strategy forstrengthening climate change capacity withinthe MoE and other agencies.
Support further strengthening of thegovernment�s financial and procurementmechanisms with suitable monitoring totrack improvements.
Finance and Coordination
Develop one pooled multi-donor trust fund
as an interim mechanism that can begin tofoster alignment and harmonisation. As aninterim measure agree options with GoN forchannelling this through an entity outsideof government.
Clearly communicate minimum conditionsfor channeling current funding through anational level climate fund.
Ensure experiences and constraints of
institutional practices as they play out at anational level are fed back to headquarters.
Donors should ensure that climate changefinancing is in addition to and does notdisplace any existing ODA commitments.
CIVIL SOCIETY
Formalise and improve coordination,
broaden coalitions and build evidence
Prioritise joint working to improve knowledge
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management and evidence building onadaptation efforts.
Agree on common policy objectives andprioritise joint actions across networks andadvocate on these with policy makers.
Consider organising a regular forum to bringnetworks together.
Consider legalising networks and puttingdedicated resources behind a nationalsecretariat. Seek funding and support outsideof Nepal.
Reach out to make linkages withparliamentarians, educational and research
institutions and media organisations.
Ensure country experiences on finance,governance, policy and programming isfeeding into and informing internationalforums.
Finance Model and Governance
Push for consultation and participationin decision making with government anddonors on a national funding entity andgovernance structure. Ensure positions areclear and informed and have buy-in of
members.
Advocate for dedicated resources in climateadaptation projects for gathering evidenceand sharing information.
Advocate for need for sufficient oversightand accountability mechanisms to bebuilt into the institutional structure and aclear role and legitimacy for civil society.
Advocate for civil society resource envelopand a clear decision making structure onresource allocations.
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1.1 POVERTY, DEVELOPMENT AND AIDEFFECTIVENESS
Nepal has a per capita GDP of US$ 427,placing it 157 of 164 countries worldwide2. 31%of the population falls below the poverty lineaccording to the national poverty line. 55% of the population lives on less than $1.25 per dayand the new Multi-dimensional Poverty Index(MPI) measures 65% of the population as multi-dimensionally poor3.
There has been significant progress in humandevelopment. A child born today can expect to
live 25 years longer than in 19704. While humandevelopment has improved over the past decadeand the proportion of Nepalis living in povertyhas lowered, through increase in remittances,higher wages and urbanisation, patterns of inequity largely remain the same and gapsbetween the advantaged and disadvantagedhave widened or remained constant5. Povertyand exclusion were significant drivers of thedecade-long conflict. Nepal is a country of hugeethnic diversity with the 2001 census
enumerating 103 distinct castes and ethnicgroups. Social indicators are heavily influencedby gender, caste and where people live.
Nepal is one of the few countries in the worldwhere women have a lower life expectancy thanmen. Women tend to have lower status and
heavier workloads. Discrimination againstwomen remains in all areas of life principallyrelated to access and control over resources
especially property rights and inaccessibilityto services like health and education. Althoughlegal amendments have improved rights forwomen, many discriminatory provisions remainand actual practices are closely linked to maritalstatus, such as inheritance and land rights.
Nepal�s economy is marked by negative tradebalance and dependence on foreign aid. Totalnet official development assistance providedby members of the Organisation of Economic
Co-operation and Development AssistanceCommittee (OECD-DAC) amounted to US$716,310,000 in 20086 , amounting toapproximately 34% of central governmentexpense; approximately 6% of Gross NationalIncome (GNI). There has been a significantdecline in Overseas Development Assistance(ODA) between 2000 and 2008 and with thepolitical instability there has been a significantreduction in aid commitments this year.Proportionate funding to the health, education
and social sectors has increased substantiallywith a resulting decline in agriculture, forestry,and other sectors7.
There are approximately 30 donors workingin Nepal. The UK is the largest OECD bilateraldonor, with USAID, Japan, Norway, Denmark
2Ethiopia $345/159th; Cambodia $677/142nd. Data of 2009, World Development Indicators database, World Bank 3http://www.ophi.org.uk/policy/multidimensional-povery-index/, Multidimensional Poverty Index, Oxford Poverty and Human Development Initiative, Universityof Oxford.42010 Human Development Report: Asian countries lead development progress over 40 years, UNDP
5Nepal Human Development Report 2009; State Transformation and Human Development, UNDP6World Bank http://data.worldbank.org/indicator/DT.ODA.ALLD.CD?cid=GPD_547Joint Evaluation of the Implementation of the Paris Declaration, Phase II Nepal Country Evaluation Ministry of Finance, Nepal, 2010
1CONTEXT
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and Germany providing around half the UK volume. India provides substantial aid,including in-kind, China is also a donor, butaccurate figures are not known for either. ADBhas been the largest multilateral but is nowbeing overtaken by the World Bank8.
The long-running conflict severely disruptedNepal�s development agenda and planning cycle.Following the end of the conflict, Nepal hasbeen able to take stronger leadership over itsnational aid effectiveness agenda. There havebeen some successes in strengthening countrysystems, but the fiduciary risk remains high.Most aid is still in the form of bilateral projectschannelled outside the budget. Alignment andharmonisation of development assistance is
problematic. The extent to which aid flows areon budget and detail on disbursements provided
to the government is limited. There is limiteduse of programme-based and sector wideapproaches, the most significant of which aresector programmes in education and health(see Box 1. below)9. Trust in the public financialmanagement system amongst donors is low.
Indicative of this is the fact that Nepal hasdropped to 146 out of 178 countries onTransparency International�s CorruptionPerception Index in 2010.
Following the Accra Agenda for Action, theForeign Aid Policy from 2002 has been revisedand updated, and the Ministry of Finance hasprepared a draft National Action Plan on AidEffectiveness.
Consultations on these have taken place andthe documents await approval.
BOX 1: FINDINGS FROM NATIONAL ADAPTIVE CAPACITY ASSESSMENT CARRIED OUT UNDER PPCRNOVEMBER 201010
8OECD DAC Aid Statistics, http://www.oecd.org/departmentand DFID Country Business Plan in Nepal 2009 - 2012
9Paris Declaration 2008 Monitoring Survey10Joint Evaluation of the Implementation of the Paris Declaration, Phase II Nepal Country Evaluation, Ministry Of Finance, Nepal, 2010 and The Sector-Wide Approachin the Health Sector; Achievements and Lessons Learned, Ministry of Health and Population, Government of Nepal, May 2010
The only real sector examples of
budget support in Nepal are in healthand education. Progress towards
greater aid effectiveness has been
made, though not without considerable
challenges. There are salutary lessons
to be drawn. In consideration of any
future climate fund that hopes to
channel harmonised donor funding in
support to national systems, the
government must take leadership in
demonstrating how it will build on these
lessons and overcome the challenges
that have been encountered.
The education sector was the first
sector in Nepal to adopt a programme
approach and the Education for All
(EFA) Programme (2004-2009), was
developed and implemented through
a Sector Wide Approach (SWAp).
Donor resources are mostly channelled
through the national system and a
separate project implementation unit(PIU) has not been used since 2004.
According to the recent Joint Evaluation
of the Paris Declaration, the education
sector is one of the few sectors in
which the government has shown
substant ia l leadersh ip in a id
coordination.
All major donors in the sector decided
to pool their resources in support of
EFA. Even non-pooling donors worked
within the overall sector wide
framework, and activities supported
by them were aligned with sector
strategies and priorities. However, their
support did not use the national
system.
The School Sector Reform Programme
(SSR) (2009-2015) is the follow-up
programme to EFA and the number
of pooling donors has increasedsignificantly to 9 donors with 5 who
are non-pooling partners but work
wi th in the SWAp framework.
Although the pooling donors in the
education sector are using the
country�s financial management system
they are still using World Bank
procurement systems as donors
remain unhappy with procurement law.
In September 2010, the donor fund
flow to the education sector was put
on hold because the audit report
pointed out anomalies in expenditure
in schools in some districts. Instead of
withholding just those amounts to
those schools, the whole grant amount
was put on hold, adversely affecting
the activities of the entire programme.
The recent Paris evaluation found that
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1.2 POLITICS AND THE STATE
Nepal is at a cross-road. The decade-longconflict formally ended in November 2006 withthe signing of the Comprehensive Peace Accord.Peace remains extremely fragile. In 2008, thecountry voted in a Constituent Assembly (CA),named a President, elected a Prime Minister,formed a coalition government, and set aboutthe writing of a new Constitution, with a newround of elections planned for 2011. The
Constituent Assembly primarily charged withwriting of the new constitution also functionsas a unicameral parliament. However a politicalstalemate since June 2010, with a feudingparliament unable to elect a new Prime Ministerhas only just shifted after seven months withthe election of the new Prime Minister,Jhalanath Khanal, the chairman of theCommunist Party of Nepal - Unified MarxistLeninist (CPN-UML). The outgoing Prime
Minister Madhav Kumar Nepal resigned inJune but continued to fill the role in a caretakercapacity. With the government not fullyfunctioning and leadership positions in manyof the main offices unfilled, the country hassurvived on emergency funds. Donors havebecome impatient and warned that their abilityto deliver aid and commit to future resourceswithin the current vacuum is severelychallenged. Drafting the constitution, advancingthe peace process and ensuring peace and
stability are key immediate priorities of thenew Prime Minister.
Nepal is divided into 5 development regions,14 zones and 75 districts. Each district has aDistrict Development Committee (DDC) and isfurther divided into Village DevelopmentCommittees (VDC). Each VDC has 9 wardswhich is the smallest administrative unit.However, elected political bodies are currently
education officials saw a positive side
to this as they believe it forces the
whole system to become more
accountable.
A Sector Wide Approach (SWAp) has
been followed in the health sector from
2004/05 with the formulation of the
Nepal Health Sector Programme �
Implementation Plan 2004-2010
(NHSP-IP). Initially funded by two
pooled partners in 2004/05 (DFID and
World Bank), it increased to four in
2010 (DFID, WB, AUSAID and GAVI).
Various significant structural and policy
changes were made after the
introduction of the SWAp, reducing
fragmentat ion and enhancing
coordination. A free healthcare policy
was instituted in 2006, with free
services made available at district
hospitals at first and then extending to
the primary health care centre level by
2009. The overall spend on health
increased significantly (tripling the last
three years) as did the allocation as a
proportion of the budget. Ten donors
have signed a Letter of Intent with
agreement that all assistance made
by them to the sector would be
consistent with the Health Sector
S t r a t eg y , w o r k i n g t o w a r d s
harmonisation of donor support in
planning, budgeting, reviewing and
reporting. However the number of
donors work ing through th is
mechanism is still small. The pooled
fund represents less than half of donor
expenditure in the health sector. Non-
pooled donors make little use of
g o ve r n men t s ys t ems . W i t h
achievements of the increasing health
budget, better absorption and related
improvements in health outcomes,
fiduciary risk has also increased, with
considerable leakage found in the
system11.
The health and education sectors are
dogged by the same problems
affecting development overall in the
country. Political uncertainty means
frequent changes of Ministers, senior
positions remain unfilled and financial
management systems are weak.
11Ministry of Health and Population, Government of Nepal (May 2010) The Sector-Wide Approach in the Health Sector; Achievements and Lessons Learned
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absent at the local level, having been dissolvedduring the conflict.
The country is undergoing huge politicalchange having emerged from ten years of conflict: from a monarchy to a republic; from a
hegemonic to an inclusive and participatorysystem of governance; from a heavily centralisedunitary system to one characterised bydecentralisation and autonomy at the regionaland local levels. The structural dynamics of governance at the local level are likely to changedramatically.
1.3 CLIMATE CHANGE VULNERABILITY
Nepal is largely an agrarian economy, withthe agriculture sector providing over 30% of GDP and supporting the livelihoods of morethan 86% of the population12. Nepal can bedivided into three ecological zones: mountains(arctic/alpine), hills (cool/warm), terai (sub-tropical). Three quarters of the population areengaged in agriculture yet only about 25% of the total area is cultivable; around 40% isforested; most of the rest is mountainous13.The main food crops are rice and wheat. Dueto the dependence on agriculture, the level of the annual monsoon rain strongly influenceseconomic growth. Nepal�s diverse topography,fragile ecosystems and poverty make itextremely vulnerable to the negative impactsof climate change. In a recent global ClimateChange Vulnerability Index (CCVI), preparedby UK firm Maplecroft, on the basis of calculated
vulnerability of 170 countries to the impacts of climate change over the next 30 years, Nepalranks fourth14.
There is limited reliable and consistentclimate science data and technology capacity.
Observed data indicate consistent warmingand rise in the maximum temperatures whichis more pronounced in high altitude regionscompared to other regions. Accelerated snowand glacial melt has increased. There havebeen more intense rainfall events causing
landslides and floods. Weather patterns areincreasingly unpredictable. Climate scientistsexpect existing trends will continue, includingmore intense monsoons, severe and frequentfloods. Glacial retreat and the threat of glaciallake outburst floods pose unprecedented threatsto water supplies and lives15. The impact of increasingly variable monsoons and intenserainfall on those living in the floodplains of theHimalayas� rivers could be catastrophic,potentially affecting up to 1.5 billion people,
600 million in the Ganges river basin alone16.
The poor are often living in areas most atrisk to floods and landslides and are morereliant on local natural resources. According tothe Food and Agriculture Organization up to3.4 million people are highly to severely foodinsecure. The World Food Programme andMinistry of Agriculture report declining foodharvests and rising food prices. As increasingnumbers of men are migrating seasonally forwork, the responsibility for feeding the familyfalls to women. They are walking longerdistances to fetch water, fuel and fodder andare increasingly taking on additional heavyburdens as wage labourers and domesticworkers17 . According to a study by theInternational Food Policy Research Institute(IFPRI) using different climate scenariomodelling, decline in crop production due toclimate change will be especially pronouncedin South Asia: �In South Asia the climatescenario results in a 14-percent decline in riceproduction relative to the no�climate-change
12Central Bureau of Statistics, National Planning Commission, Statistical Yearbook Nepal .13 The Future of Nepal's Forests, Outlook for 2020, Ministry of Forests and Soil Conservation, Government of Nepal: The last National Forest Inventory (NFI) wascarried out in the early 1990s. According to that inventory, forest and shrub together cover about 5.83 million ha, which is 39.6% of the total land area of the country.
The rate of forest area decreasing was 1.7% per annum during 1978/79 to 1994, whereas rate of forest and shrub depleting rate was 0.5% per annum during thesame period. Since then NFI has not been done. However, recent studies from 20 Terai districts revealed that the rate of forest cover changed was at an annualrate of 0.06% during the period of 1990/91 to 2000/2001. Macro level studies and visual interpretations revealed that Nepal�s forest coverage and condition issignificantly improving due to the Community Forestry (CF) intervention.14http://www.maplecroft.com/about/news/ccvi.html15
Immerzeel W W, Van Beek L P h and Bierkens M F P (2010) Science 328: 1382-1385.16South Asia Sustainable Development Department, World Bank, (2009) Shared Views on Climate Change , Chapter 3, p 3417Oxfam International (August 2009), Even the Himalayas have Stopped Smiling: Climate Change, Poverty and Adaptation in Nepal .
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18Gerald C. Nelson, Mark W. Rosegrant, Jawoo Koo, Richard Robertson, Timothy Sulser, Tingju Zhu, Claudia Ringler, Siwa Msangi, Amanda Palazzo, MiroslavBatka, Marilia Magalhaes, Rowena Valmonte-Santos, Mandy Ewing, and David Lee, Climate Change, Impact on Agriculture and Costs of Adaptation, Food PolicyReport, p. 6, IFPRI, October 200919
Wily, Chapagain and Sharma (Nov 2008) Land Reform in Nepal: Where is it Coming from and Where is it Going? 20Central Bureau of Statistics, National Planning Commission, National Population and Housing Census , Nepal, 200121Wily, Chapagain and Sharma, Land Reform in Nepal: Where is it Coming from and Where is it Going?, Nov 2008
scenario, a 44- to 49-percent decline in wheatproduction, and a 9- to 19-percent fall in maizeproduction�18.
1.4 LAND ACCESS AND DISTRIBUTION
Land access and distribution remainextremely unequal. Around 7.5% of ruralhouseholds retain over a third of the cultivatedland area, and a much greater proportion of the private property estate overall, withsignificant parts of it remaining idle.Characteristics of feudal land relations remain,such as �high level of absentee landlordism,large areas of underutilised farmland, andfailure to reform the conditions of those whofarm others� land, some of whom...remain in
debt peonage until today...despite repeatedlegislation against this. Insecurity of tenureafflicts the entire farming sector, a main causeof its stagnation�19. Around 90 percent of women
in the country contribute to agriculture. Thoughwomen make up a majority of the agriculturallabour force most are unpaid family workers.Women�s access to land is extremely limited,accounting for only 10.83 per cent of totallandowners and with a combined share of only
4 per cent of arable land, according the lastnational census in 200120.
Following the first land reform legislationin the 1950s, progress has been slow.Community forestry in Nepal has demonstratedthat forests controlled and used by communitiesare better conserved than those owned bygovernment. Researchers have argued thatlooking to these achievements and building anew approach to land reform with each
community determining and managing its ownceilings and redistribution plan is a logical nextstep21.
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2
2.1 INTERNATIONAL POSITION ON CLIMATE CHANGE
Nepal has signed numerous international
treaties and instruments. Nepal became a partyto the United Nations Framework Conventionon Climate Change (UNFCCC) in 1992, enteringinto force in Nepal in July 1994. The KyotoProtocol came into force in December 2005. Inmost international fora and instruments,including in climate change Nepal positionsitself with a group of countries with similarinterests. As a Least Developed Country (LDC)Nepal is a member of the 49 country LDC Groupand tends to negotiate as a group with other
LDC countries. Nepal is also a member of theG77 and China, however is often dormantwithin the group.
Nepal has attended all several Conferenceof Parties (COP) meetings under the UNFCCCin order to raise national issues and negotiatean international agreement. Climate changereally became a national agenda following thepeace agreement and in time for the 13thConference of Parties meeting held in Bali,
Indonesia in 2007. Nepal regards the Bali ActionPlan as the basis of negotiations forany international instrument under theUNFCCC.
Nepal strongly advocates, with others, thatdeveloped country parties must immediatelyfulfil the commitment made in Article 4.10 of the UNFCCC. The article states that "theParties shall take full account of the specificneeds and special situations of the least
developed countries in their actions with regardto funding and transfer of technology."
Mitigation and carbon market relatedactivities have been the main response toclimate change but there is now an emergingemphasis on adaptation.
2.2 OVERVIEW OF NATIONAL STRUCTURE AND
PROGRAMMES
Climate change awareness is growing withincreasing government and civil societyengagement. There has been relative success
in building broad ownership across governmentover the past two years. However publicawareness is low. There has been no informationcentre in existence until very recently and keypolicies and documents are not available in anaccessible form to the public. There is also noenvironmental monitoring mechanism or legalprotection for environmental rights.Consequently accountability and oversight islacking.
There are several Acts and Regulations thatlink directly or indirectly to climate change:the Forest Act (1993) and Forest Regulation(1995), Environment Protection Act (1996),Environmental Regulation (1997) and WaterResource Act (1992). Various sector policiesand strategies underpin these. Major national-level development and sector plans such as theMaster Plan for Forestry Sector and NationalWater Plan are relevant to adaptation butclimate risks have not been directly addressed
EXISTING AND EMERGING NATIONAL
SITUATION ON CLIMATE CHANGE ADAPTATION
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in them. The interim three year plan 2008-2010 addressed climate change risks andadaptation directly for the first time22. GoNalso made environmental impact assessmentsmandatory.
Under the last Prime Minister leadership aClimate Change Council was established anda Climate Change Policy agreed in the cabinet.
A Natural Resources and EnvironmentCommittee was also previously establishedunder the House of Representatives to evaluatepolicies and programme. It continues underthe interim legislature; however it has beenlargely inactive. In addition there is an informalnetwork of MPs on natural resources andclimate change. In 1992 the Environment
Protection Council (EPC) was established andchaired by the then Prime Minister to serve asthe highest decision making body on all mattersrelated to the environment. The EPC ratified
various climate related conventions anddeveloped vehicle emissions standards, but thisbody has also been largely dormant23 .
Nepal�s National Capacity Self-Assessmentto the UNFCCC in 2008 highlighted severalchallenges in relation to adaptation activitiesincluding insufficient financial, technologicaland human resources. A review of differentsectors highlighted a number of barriers suchas incomplete implementation of existing plansand policies, decreasing budget allocations(agriculture and irrigation) and limited andunclear guidelines regarding mandates androles of devolved structures.
The Ministry of Environment (MoE) is thefocal point for UNFCCC and climate relatedwork in Nepal. It became a separate ministryin June 2010. The Government of Nepal hascreated a new division under the MoE calledthe Climate Change Management Divisionheaded by the Joint Secretary. This divisionshould be specifically responsible forcoordinating climate change work. Althoughthe move towards creating a clear focal pointand dedicated capacity for climate change is a
positive step, the necessary human and financialresources have not yet accompanied this change.More fundamentally the mandate of MoE hasnot been clearly decided. It currently overseesrules and regulations and serves as a focal pointfor climate work. Many stakeholders have been
demanding a dedicated institution that has theauthority to coordinate and implementenvironmental and climate change laws andpolicies at the central and sub national levels24.
As it stands currently, MoE is a small, nascentMinistry with limited technical and operationalcapacity. MoE has stated in various fora thatit sees itself as a coordinating agency and givenits current limited capacity, implementationshould be carried out through line agencies.However a coordination role in itself still needs
significant resources and capacity.
Nepal is eligible to access finance from theUNFCCC Global Environment Facility specialfunds: the Least Developed Countries Fund(LDCF), Special Climate Change Fund (SCCF),and the Adaptation Fund under the KyotoProtocol. So far it has obtained a small amountof funding through LDCF for the developmentof the NAPA plan. Nepal has received a smallamount of climate change funding through theGEF Trust Fund for capacity building,implemented through UNEP25 . The mostsignificant national level adaptationprogrammes under development are theNational Adaptation Programme of Action(NAPA), with funding from LDCFsupplemented by UNDP, DFID and Danida,under UNDP administration; and the PilotProgram for Climate Resilience (PPCR), fundedby the Climate Investment Funds/StrategicClimate Fund, under administration of theWorld Bank and ADB. The Ministry of Environment leads on both of these. At thepresent time there is no funding flowing toeither of these programmes. The InternationalCentre for Integrated Mountain Development(ICIMOD) works with MoE to promote theMountain Alliance Initiative with funding fromNorway and Switzerland. There are a numberof other significant adaptation programmes
22Dixit, A, Scoping Assessment on Climate Change Knowledge Platform in Nepal , ISET-Nepal, 2010
23Ibid24ADB Technical Assistance Report: �Federal Democratic Republic of Nepal: Strengthening Capacity for Managing Climate Change and the Environment�25http://www.gefonline.org/projectListSQL.cfm
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2.3 TECHNICAL ASSISTANCE PROJECTS ANDCAPACITY STRENGTHENING
In addition to the above there is a confusingarray of separate technical assistance capacitystrengthening projects funded by different
donors to a number of ministries. These arelargely operated by teams of international andnational consultants in project implementationunits attached to ministries but closely handledby their donors. The main projects are: to MoEfrom ADB, DFID/, DANIDA and UNEP; to the
National Planning Commission (NPC) from ADB and UNDP/UNEP; to the Department of Hydrology and Meteorology (DHM) (which isunder MoE) from ADB, DANIDA and Finland.These are each separate projects with separateMoUs, financing arrangements and modalities.
One of the key components of a programmeof technical assistance from ADB, that has beenongoing since 2008, is a grant entitled
Strengthening Capacity for Managing
Climate Change and the Environment.Central to this is working out the much-needed organisational framework andfunding mechanism for climate changework. The expected outputs are (i) anorganisational framework is drafted andagreed upon by stakeholders; (ii) a fundingmechani sm fo r env i ronmenta lmanagement is agreed upon bystakeholders; and (iii) effective publiceducation, information, and awarenessactivities on environment and climatechange are developed and implemented27.
According to an ADB documentconsultants began work on this inFebruary 2010 with an aim to have �anational Government institutiondedicated to managing climate changeand the environment...fully staffed andfunded by 2015�28. This is vital work. Itis critical that the planning process takesin broad consultations and progresstowards developing the institutionalframework is communicated widely tostakeholders. It is not clear that this has
been happening adequately. In addition thesecond and third component of the expandedNAPA process (which is examined below) shouldlink in directly with this work and not be aduplication of efforts.
26Aide Memoire, Nepal: Pilot Program for Climate Resilience (PPCR) World Bank / ADB / IFC Joint Mission, 15-21 November 201027ADB, Climate Change Roadmap, 31 Jan 1028ADB Technical Assistance Report: �Federal Democratic Republic of Nepal: Strengthening Capacity for Managing Climate Change and the Environment�
going through Ministry of Forests and SoilConservation (MoFSC) and the Ministry of
Agriculture and Cooperatives (MoAC), inparticular. These are mostly vertical fundingagreements with bilateral agencies, thoughthere are some more pooled donor funds
developing. It is extremely hard to establishwhat is new and additional funding or alreadycommitted ODA. It is clear from the data intable 3 below, that some funds previouslycommitted as ODA are now being classified asclimate financing.
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BOX 2: FINDINGS FROM NATIONAL ADAPTIVECAPACITY ASSESSMENT CARRIED OUTUNDER PPCR NOVEMBER 201026
The National Adaptive Capacity Assessment carried
out under PPCR identified the following capacity
gaps:
Almost complete absence of climate change risk
management personnel in key organizations and
institutions;
Cl imate change risk management is not
institutionalized in government, academia, civil society
or in vulnerable sectors, municipalities, districts or
communities;
No training, database, information or guidance exists
on planning/constructing cl imate resi l ient
development;
Insufficient financial resources to effectively integrate
climate change risk management into development
planning;
Development planning in key sectors (water,
agriculture, physical planning) does not consider
risks associated with climate change and there are
no modalities to facilitate such transformational
change in development planning.
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Given fiduciary risk concerns some majorbilateral agencies say they are not yet able tochannel funds through the Ministry of Environment. Government, and others, arguethat the ministry needs to be given the workin order to prove itself and to be able to
institutionalise the various strands of, oftenunlinked, technical assistance that are currentlybeing provided. Donors need to re-examine thecurrent fragmented approach to capacitybuilding and work jointly on pooling assistance,using the recently approved Climate ChangePolicy as an overarching framework from whichto develop a convergent long term strategy forstrengthening climate change capacity withinthe MoE and other agencies.
2.4 GOVERNMENT POLICY AND COORDINATIONMECHANISMS
There are two chief climate changecoordination and policy forums currentlyoperating under the government. The ClimateChange Council and Multi-Stakeholder ClimateChange Initiatives Coordination Committee(MCCICC). The Climate Change Council,formed in July 2009, is a 25 member high-levelpolicy and coordination body formed under thechairmanship of the Prime Minister, with thesecretary of the Ministry of Environment asthe Member Secretary. Fourteen differentministers and other senior officials are membersof the Council. This council has eight �experts�nominated by government inclusive of NGO,private sector and academia. The main objectiveof this council is to provide national level policyguidance and long term directions on climatechange related policy and strategy.
The MCCICC was formed during thepreparation of NAPA in July 2010, under theMinistry of Environment. MCCICC is chargedwith improving communication andcoordinating climate change initiatives at aprogramme level as well as funding onadaptation actions, including those identifiedunder NAPA. The previous Climate ChangeNetwork (CCN) which had been constituted in2007 seems to have been folded into this. Itincludes members from different line ministries,including local government, donors and civil
society representatives. It was established inJuly 2010.
Two brief overview papers have beendeveloped by MoE on the Council and MCCICC.A comprehensive Terms of Reference, clearly
detailing the purpose and functions of thesebodies, and the roles and responsibilities of serving members would facilitate more efficientfunctioning and better public understanding of these bodies. In addition clarification of howthe Climate Change Council and MCCICCinteract is needed.
The Ministry of Environment (MoE) initiateda process three years ago to formulate a nationalclimate change policy. After several national
and sub-national consultations the process wasput on hold to allow the NAPA plan to beundertaken first. The drafting was resumedand the policy has been recently approved bythe cabinet. Focal areas are adaptation, lowcarbon development paths and natural resourcemanagement. The policy plans for theestablishment of a semi-governmental ClimateChange Centre, within a year. The centre willundertake research and provide technicalsupport to the government.
A Climate Change Coordination Unit withinthe Climate Change Management Division of MoE has been proposed to coordinate all climatechange related projects implemented bygovernment, donors, Multilateral DevelopmentBanks (MDBs) and other agencies. In addition,there is a proposal to establish a projectmanagement unit with support from therespective climate change-related projects.
Although this would be an improvement on thecurrent structure and a positive interim stepa longer-term option for channeling andharmonising funds, must be developed.
2.5 NATIONAL ADAPTATION PROGRAMME OF ACTION(NAPA)
Nepal embarked on its National AdaptationProgramme of Action late, only properly startingin May 2009 and completing it in September2010. Preparation of the NAPA plan wasdelayed for various reasons, including funding
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disbursement, coordination issues involvingUNDP and limited operational capacity in MoE.
As funding was delayed for so long and hiringof consultants problematic, DFID was askedby GoN to step in and provide consultants toMoE so they could begin NAPA work.
Since, Nepal was one of the last countriesto prepare their NAPA it strived to capitaliseon learning from other countries, to ensurethere was a strategic approach with better linksto other climate change processes and nationalplanning, and to mainstream adaptation rightdown to the local level. In response Nepalundertook an �expanded NAPA� with threecomponents: (1) preparation and disseminationof a NAPA document; (2) development and
maintenance of a Climate Change KnowledgeManagement and Learning Platform and (3)development of a Multi-stakeholder Frameworkof Action. Significant co-financing was mobilisedfrom DFID, DANIDA and UNDP to supplementfunding from GEF. In addition, to the US$200,000 from GEF (under LDCF), there was afurther US$ 50,000 from UNDP, US$ 875,000from DFID and US$ 200,000 from DANIDA.
The process has been credited with goingfurther than other NAPAs in the level of consultation and engagement, moving beyondonly regional and national consultationmeetings to incorporate inputs from a widerrange of stakeholders and interest groups,including with vulnerable communities. Theplan was developed through six thematic orsectoral areas, under a thematic working groupwere formed, each led by a different lineministry: Agriculture and Food Security; Forestsand Biodiversity; Water Resources and Energy;Climate-induced Disasters; Public Health; andUrban Settlements and Infrastructure. Micro-level impact assessments were conductedthrough transect appraisal exercises withparticipation from a number of government
and non-government agencies. Climate vulnerability assessments and GIS mappingwere also conducted.
The NAPA document states that �NAPA prioritization process serves as a basis for the
development of an adaptation strategy thatwill be able to draw financial resources forimplementation from national as well as variousglobal, multi-lateral and bilateral sources. TheGovernment expects that any and all climatechange adaptation support programmes willcarefully consider the NAPA outcomes as a firststep� in order to ensure a coherentprogrammatic approach and systematicreduction of vulnerability and climate changeimpacts nationwide.�
The thematic working groups identifiedactivities which were then prioritised using acommon set of criteria and qualifiers. Thesewere then clustered into nine combined profiles.The total cost of these nine profiles is budgetedto be US$ 350 million. The document anticipates80% of funds being spent at the village/ municipal level, channelled through adesignated implementing line ministry,according to the project. At the district level,project planning and delivery will be theresponsibility of the District CoordinationCommittee (DCC) under DDC. It is envisagedthat a Secretariat under the DDC will beresponsible for selecting local service deliveryagents. Where there are projects that cut acrosssectors, such as the �Promoting Community-based Adaptation through IntegratedManagement of Agriculture, Water, Forest andBiodiversity Sector�, which require much-neededconvergence, details of implementation are lessclear. The Ministry of Local Developmentand the Local Government CapacityDevelopment Programme should be keyto supporting vertical and horizontalcoordination and delivery.
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The planning process incorporated a clearfocus on gender. Gender analyses wereconducted with gender differentiated impactsassessed. The specialist reviewed all ThematicWorking Group reports from a genderperspective, as well as carrying out a literaturereview. The findings were represented within
NAPA teams. It is recognised that integratinggender approaches is key to developing effectiveadaptation actions and actions must be guidedby the findings. The implementation frameworkalso gives consideration to the need for astructure at the development region orwatershed level that would house experts inrelevant fields including gender and socialinclusion. What is harder to see is how theanalytical work has been incorporated in projectprofiles and will move to implementation.
Whilst vulnerability is mentioned, objectives,activities, outputs and long term outcomes giveno mention of gender. It is unfortunate thatneither the Ministry of Women, Children andSocial Welfare nor the Women Commissionwere brought into the NAPA developmentprocess, particularly considering that theengagement of a number of ministries acrossgovernment has been such a positive elementof the Nepal's NAPA. However the ministryhas now been brought into the MCCICC.
Although there are concerns about its capacity
it is essential that the national machinery of the advancement of women is engaged in keydialogue and processes related to climate changeadaptation for it to effectively play a role inpromoting gender equality and keeping thishigh on the MCCICC and Climate ChangeCouncil agenda.
Under the second component of the NAPA,the Nepal Climate Change and DevelopmentPortal was also launched29. This portal shouldserve as the main forum for sharing climateinformation and knowledge. The Nepal ClimateChange Knowledge Management Centre(NCCKMC) was inaugurated by the PrimeMinister on 29 November 2010, also underfunding from NAPA. This centre is launchedat the Nepal Academy of Science and
Technology (NAST) in joint collaboration withMoE. The Centre is organising a nationwidemobile library including interactive activities.It seems this centre will focus on knowledgemanagement and public awareness whereasthe semi-governmental Climate Change Centrethat is to be set up within a year will focus oncommissioning new research and advisinggovernment. As stated earlier, it is unclear howthis links in with the third output of the ADBtechnical assistance on effective public
education, information, and awareness
TABLE 1: PRIORITISED PROJECTS UNDER NAPA
Estimated Cost(in million USD)Project Name
50
44
60
Promoting Community-based Adaptation through Integrated Management of Agriculture, Water, Forest and Biodiversity Sector
Building and Enhancing Adaptive Capacity of Vulnerable Communities Through
Improved System and Access to Service Related to Agricultural Development
Community-based Disaster Management for Facilitating Climate Adaptation
GLOF Monitoring and Disaster Risk Reduction
Forest and Ecosystem Management for Supporting Climate Led AdaptationInnovations
Adapting to Climate Challenges in Public Health
Ecosystem Management for Climate Adaptation
Empowering Vulnerable Communities through Sustainable Management of WaterResource and Clean Energy Supply
Promoting Climate Smart Urban Settlement
Total estimated cost
1
2
3
4
5
6
7
8
9
25
15
55
31
40
30
350
29Nepal Climate Change and Development Portal, www.climatenepal.org.np
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activities, unless the ADB work is directlysupporting the development of these bodies.Detailed clarification of mandates, coordinationmechanisms and resources will be needed.
In terms of NAPA implementation the
document lays out a framework. MoE isresponsible for overall coordination andreporting and liaising with the Climate ChangeCouncil � the apex body responsible for policycoordination � and the main coordination forumestablished under NAPA, the MCCICC (Multi-Stakeholder Climate Change InitiativesCoordination Committee).
The NAPA document was approved by thecabinet in September 2010. The intention was
that the three components would come togetherand be developed more or less simultaneously.The reality is that the preparation of the NAPA document took longer to get off the ground thananticipated and activities under the other twocomponents are only now being rolled out. Thereare large operational issues to work out aroundan effective delivery mechanism to ensure 80%
of funds actually get down to the local level andpreventing fragmentation across a number of line ministries with a relatively small andnascent ministry charged with coordinationand consolidation. Funding for NAPA projectsis still not entirely clear. NAPA has been
submitted for endorsement and funding underLDCF and it has been indicated that there willbe around $10 � 12m available. It looks likelythat this funding will be split between UNEPand UNDP, with UNEP supporting biodiversityand ecosystem projects (NAPA projects 5 and7) and UNDP supporting community adaptivecapacity initiatives (NAPA projects 2 and 3),although clearly this funding will only go someway to meeting the projected budget for theseprojects under NAPA. Design for this is
currently underway. The decision to splitfunding between two UN agencies will requireextra attention to coordination and ensuringclear strategic direction. Hopefully thecoordination structures that have beenestablished under NAPA will enable this. A number of NAPA initiatives should also bepicked up under PPCR, as is examined below.
FIGURE 1: FRAMEWORK FOR NAPA IMPLEMENTATION30
Planning and coordination at VDC/Municipal level
Local agencies/NGO/CBO
Implementing Line agency (ies)
District Coordination Committee (DCC)
(at District Development Committee to the extent possible)
Regional Technical Support and Coordination Units/s
Programme/Project Coordination Committee (PCC)
Implementing Line Ministry(ies)
Ministry of Environment as Focal Ministry(CC Programme Coordination and Monitoring Unit)
MCCICC
1 0 % o f b u d g e t
C e n t r a l
C o o r d i n a t i o n
P l a n n i n g , m o n i t o r i n g
a n d r e p o r t i n g
Private Sector/s
Programme/project implementation through existing communitylevel organization/s like CFUG, different FGs, Irrigation Groups andother interest groups 8
0 % o f b u d g e t
I m p l e m e n t a t i o n
1 0 % o f b u
d g e t
F u n c t i o n a l
C o o r d i n a t i o n
S e l f
M o n i t o r i n g
a n d
e v a l u a t i o n
S e l f
M o n i t o r i n
g
a n d
e v a l u a t i o n
S e l f
M o n i t o r i n g
a n d
e v a l u a t i o n
Policy and Advisory Bodies (CCC and NPC)
Acronyms: CCC: Climate Change Council, NPC: National Planning Commission, MCCICC: Multi-stakeholder Climate change
Initiatives Coordination Committee, CC: Climate change, CFUG: Community Forestry User Group, FG: Farmers' groups
30Ministry of Environment, National Adaptation Programme of Action, Government of Nepal, September 2010
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The Government has recently adopted a new three year
plan 2010 � 2012 (TYP). The key expected outcomes
of the plan are to prepare and implement a national
framework on climate change adaptation and mitigation,
disaster risk reduction, poverty reduction and povertyenvironment initiatives. Several strategies are included
under the TYP to link environmental and climate change
policies to development. Sustainable development,
poverty reduction and responding to climate change
are seen as very much interlinked and interdependent.
To implement the strategies, the TYP has made the
MoE responsible for coordinating all activities related to
conservation and climate change, identifying agencies
and ensuring roles and responsibilities for NAPA
implementation. The TYP also focuses on the need for
developing partnerships amongst donor agencies, NGOs,
local bodies, CBOs and other agencies, and to take aninitiative to establish an international research centre on
climate change.
ADB has been supporting the National Planning
Commission (NPC) with the three year interim
development plan to mainstream climate change into
the plan and make it �climate smart�. This project has
recently come to an end.
BOX 3: NAPA AND NATIONAL PLANNING
2.6 STRATEGIC/PILOT PROGRAMME FOR CLIMATERESILIENCE (SPCR/PPCR)
Nepal is one of the nine PPCR recipientcountries. PPCR is broken into two stages: firstphase is for the analysis, coordination andplanning across ministries to mainstreamadaptation into development plans and thesecond phase for the implementation of theplans and programmes. PPCR is completing
the first stage of planning in Nepal. A projectteam, largely of consultants, currently sitswithin MoE. The draft proposal for a StrategicProgram on Climate Resilience (SPCR) wasreviewed during an ADB/World Bank jointmission in November and has been tentativelyagreed. The next joint mission is planned forearly February 2011. The initial fundingcommitted for PPCR in Nepal was US$ 60million, divided between grant and loan. Thereare ongoing discussions that this will increase
to US$110 million: a 50 million grant and 60million concessional loans.
The loan component of PPCR is highlycontentious with sharply divided opinions bothfor and against. A clear majority of local civilsociety organisations are firmly opposed to loan,which is also evidenced by the recent reports
and articles in the mainstream media31. Thearguments against the loan component in Nepalmirror those arguments that have been madefor a number of years at the international level.
As Muller articulated in a paper in 2008: �Giventhe patterns of differentiated (historic)responsibilities, the costs for developing countryadaptation are seen as debts to be borne by thestill largely responsible industrialised world,and debts cannot be repaid by loans, or even
by �grants� � if that notion is interpreted interms of the provider of the funds doing therecipient a favour. Moreover, given this patternof differentiated responsibilities, there are also
very strongly held views on the importance of an equitable distribution of the burden of suchfunding�32.
PPCR development started as NAPA planning was underway. Expectations werethat PPCR would align under NAPA and could
be used to finance identified NAPA projects. At the same time the Climate Change Policywas being drafted by government and therewas a strong push for improved coordinationbetween donors. There was optimism thatdonors would work jointly with government todevelop a comprehensive and coordinatedstrategy for programming and financing
31Khadka, N.S. �Climate Injustice?� Kathmandu Post Oped, January 27th, http://www.ekantipur.com/the-kathmandu-post/2011/01/27/oped/climate-injustice/217751.html; Khadka, N.S. �Nepal climate loan hit by opposition storm, BBC, February 3 rd 2011, http://www.bbc.co.uk/news/science-environment-12357200;
Bhushal, R.P �Loan to Fight Climate Change� The Himalayan Times, 24 January 2011:http://www.thehimalayantimes.com/fullNews.php?headline=Loan+to+fight+climate+change+&NewsID=27415332Benito Müller, International Adaptation Finance: The Need for an Innovative and Strategic Approach, Oxford Institute for Energy Studies, EV 42, June 2008
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adaptation. The two project teams for NAPA and PPCR came together to look at how thiscould work.
The �Prioritization Planning Process Draft�document of PPCR states that it will �build on
the comprehensive, inclusive and country-drivenprocess to develop Nepal�s NAPA�33. Howeverit also emphasises that �NAPAs are intendedto cover urgent and immediate needs foradaptation whereas the PPCR is focused onlong-term goals of achieving development thatis climate resilient.� Although the NAPA document states that prioritised projects includeurgent and long term adaptation strategies34.
Additional activities have been undertaken toaddress what were considered gaps in NAPA
and to ensure compliance with PPCR guidelines.These include: assessment of climate change
risk; adaptive capacity assessment; definitionof priority action needs; resilience assessment;cost/benefit analysis; design of implementationmodalities. The same Thematic WorkingGroups, established under NAPA, have beenused in the development of PPCR.
After the first joint PPCR mission of ADBand World Bank, hopes for alignment began todissipate with concerns arising that PPCR wasdeveloping its own process, with littlegovernment ownership. On the other hand, theMDBs expressed their concern that NAPA wasnot developing quickly enough as well asstressing that PPCR had its own set of guidelines. As seen in the paragraph above, itwas felt that PPCR�s focus was on strengtheningnational systems on a long-term basis, whereas
NAPA�s remit was around urgent andimmediate needs. It is noteworthy that theseare seen as mutually exclusive as opposed tostriving to ensure that they are brought togetherfor a comprehensive and strategic approach toclimate change adaptation. It now seems certain
that PPCR will fund some of the activitiesidentified under NAPA. The recent PPCR AideMemoire states that the design of thecomponents is complementary and reinforcingto NAPA 35. Yet distinctions between resilienceand adaptation and short-term and long-termmeasures are still stressed by the MDBs asreasons for distinguishing between PPCR andNAPA. Recently GoN has also been using thesedistinctions in countering arguments againstloans36. However, these distinctions seem
increasingly opaque and unhelpful to otherclimate change actors.
Four inter-related components have beenproposed for the Strategic Program on ClimateResilience: Building Climate Resilience of Watersheds and Water Resources in MountainEco-Regions ($45 million with a combinationof grant and credit, lead: MoFSC); 2. BuildingResilience to Climate-Related Extreme Events(approximately $40 million with a combinationof grant and loan: lead: MoE/DHM and MoAC);3. Mainstreaming Climate Change RiskManagement in Development (US$10 million(anticipated grant financed, lead: MoE); and 4.Building Climate Resilient Communitiesthrough Private Sector Participation(approximately $13 million with a combinationof grant and loan).
33PPCR Prioritization Planning Process Draft � www.ppcrnepal.gov.np34Ministry of Environment, National Adaptation Programme of Action, Government of Nepal, September 2010, p. xiv.35Nepal: Pilot Program for Climate Resilience (PPCR) World Bank / ADB / IFC Joint Mission, 15-21 November 2010
Aide Memoire.
36For example the justification for taking a loan made by MoE recently was that it was not to be used for adaptation projects but instead long-term resilience: �The loan is not at all going for adaptation projects they are actually for climate resilience that include long term projects like, for instance, building bridges, embankments,development of resilient seeds in agriculture...� http://www.bbc.co.uk/news/science-environment-12357200
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37Nepal: Pilot Program for Climate Resilience (PPCR) World Bank / ADB / IFC Joint Mission, 15-21 November 2010
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BOX 4: PPCR COMPONENT AND CORRESPONDING NAPA ACTIVITIES37
Component 4:Building Climate ResilientCommunities through PrivateSector Participation
Component 1:Building Climate Resilience of Watersheds and Water
Resources in Mountain Eco-Regions
Component 2:Building Resilience to Climate-Related Extreme Events
Component 3:Mainstreaming Climate ChangeRisk Management inDevelopment
Enabling climate vulnerable communities sustain livelihoods by improving access to agriculturalservices
Increasing community climate adaptive capacity through improved production and marketing
systems
Integrated Watershed Management in Churia to ensure ecosystem and community adaptationto climate change
On-farm soil and water conservation initiatives to support hill and mountain communitiesvulnerable to climate change.
Promotion and up-scaling of Multi Use System (MUS) for the benefit of poor and vulnerablecommunities in mid-hills and Churia range of Nepal
Up scaling and implementation of non-conventional irrigation systems in water stressedareas.
Construction of water retaining structures as sustainable adaptation measures to addressthe effect of climate change.
Integrated wetland management
Promotion of rainwater harvesting structures and technologies.
Water supply source conservation (quality as well as quantity) and strengthening programs
of existing projects affected by source reduction
Building capacity to enhance community adaptation to climatic hazards
Flood management to reduce the vulnerability of communities and increase their adaptivecapacity
Community-based disaster risk reduction with climate change dimension
GLOF monitoring and disaster risk reduction
Early warning system development in disaster prone areas
Interlink climate change with DRR and enhancement of institutional capacity at differentlevels
Management of existing hydrological and meteorological network at DHM and up-scaling
the servicesStrengthening forecasting / early warning and surveillance system on climate change & health in Nepal
PPCR Component Corresponding NAPA Activities
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Gender has not been significantly addressedin the draft programme document38. Thecomponent on watersheds and water resourcesmakes the most direct reference: �addressingthe availability of water in mountain ecosystemscan help Nepal meet its social inclusion goals.
The burden of carrying water usually falls towomen and children, so addressing their multi-use water availability needs and increasingtheir access to water resources will help inaddressing gender issues�39. It is not clear howaddressing multi-use water availability needsper se will specifically target women or howgender will be explicitly built into the projectdesign and monitoring to tackle some of thestructural issues that result in women havinginequitable access to water resources. The
second component on resilience to climate-related extreme events includes �establishmentof appropriate micro-insurance programs for
vulnerable farming communities, home ownersand women, most probably as a public/privatesector partnership�. Again, differentiatedstrategies and targeting are not addressed.Similarly the proposed institutional structure
and implementation framework make noreference to gender considerations. The Ministryof Women, Children and Social Welfare seemsto have had no involvement.
Control of PPCR decisions seems largely to
be in the hands of the banks� headquarters andon many issues MDB staff in-country seem tohave their hands tied. Other donors andgovernment have found it hard to engage andthe space to influence the process has becomeincreasingly smaller � even though thegovernments of these donor countries are majorfunders of PPCR. Concerns have been increasingthat the aspirations of PPCR�s stated objectivesand the reality are far apart.
During a joint ADB and World Bank mission,donors and civil society raised the possibilityof PPCR funds being channelled through amulti-donor trust fund. It was made clear thatcreating such a fund was not within themandate of PPCR nor was it possible for PPCRfunding to flow through such a fund40. Thisrigidity is unhelpful.
38�Part 1 � Nepal�s Strategic Program for Climate Resilience - Consultative Draft (20/11/10)�39Ibid, Annex 4
40Nepal: Pilot Program for Climate Resilience (PPCR) World Bank / ADB / IFC Joint Mission, 15-21 November 2010 Aide Memoire
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TABLE 2: NAPA AND PPCR: OVERVIEW OF KEY FEATURES
· Currently no funding for projects.
· Looks likely that 10 12m. will come from LDCF,split between UNEP and UNDP forimplementation.
· Draft proposal tentatively agreed. Next missiondue for Feb 2011 to finalise and agree funding.
· May 2009 started developing plan.
· US$1.325m: 200,000 (from GEF/LDCF); 50,000
UNDP; 875,000 DFID; 200,000 DANIDA supplemented in country.
· Multi-donor trust fund under UNFCCC�s GlobalEnvironment Facility, LDCF
· Global � under GEF Assembly, Council, Secretariat.Guidance of the Least Developed Countries ExpertGroup
· WB serves as Trustee
· In country, pooled fund under UNDP
· Operated under separate Project ImplementationUnit under MoE with international and nationalconsultants.
· Six thematic or sectoral areas, under a thematicworking group headed by different ministries.
· Involved series of consultations around the country,reviews and appraisals.
· Focus on knowledge management andstakeholder coordination through additional donor
funding in-country.· Plan approved by the Cabinet.
· Identified over 40 projects, prioritised 9, underdifferent themes and sectors
· Anticipates 80% of funds being spent at thevillage/municipal level, channelled through adesignated implementing line ministry MoE isresponsible for overall coordination and reportingand liaising with the Climate Change Council
· MCCICC (Multi-Stakeholder Climate ChangeInitiatives Coordination Committee) established
as main coordination forum.
· Budgeted US$ 350 million for 9 prioritised projects
· March 2010 started developing plan.
· $225,000 for technical assistance (from Strategic
Climate Fund)
· Multi-donor trust fund outside UNFCCC throughClimate Investment Fund
· Global - PPCR Sub-Committee (PPCR-SC)oversees operations and activities of the PilotProgram. Governed by SPCR sub-committeeguidelines
· WB/IBRD serves as Trustee
· In-country managed jointly by World Bank and
ADB.
· Operated under separate Project ImplementationUnit under MoE with international and nationalconsultants.
· Used NAPA thematic groups for consultations.
· Carried out further or new assessments beyondNAPA�s.
· Milestone decisions through WB/ADB missions
· Four inter-related components with some cross-over with NAPA identified priorities.
· Implemented through designated projectmanagement units, with component coordinationcommittees chaired by secretaries of the respectivecomponent lead agencies.
· Climate change program steering committee willmonitor results and provide coordination, chairedby Minister of MoE. MoE secretariat.
· Anticipated budget of $110m: 50m grants & 60mloans.
NAPA SPCR/PPCR
Current statusand Next steps
Timing
Funding to date
Governance andoperationalmechanism
Design process
Content
Budget
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2.7 ADAPTATION FUND (AF)
The Adaptation Fund was established bythe Parties to the Kyoto Protocol of the UNFramework Convention on Climate Change(UNFCCC) to finance concrete adaptation
projects and programmes in developingcountries that are Parties to the Kyoto Protocol.The Fund is financed with 2% of the CertifiedEmission Reduction (CERs) issued for projectsof the Clean Development Mechanism (CDM)and other sources of funding.
As Tandon and Vogt state �the fund has anumber of unique features in its ownership,access, funding, revenue generation, governanceand legal structure, and has garnered aheightened sense of awareness and anticipationin the international environmentalcommunity41. �It has created particular interestas it allows �direct access� to funding by Parties,as opposed to through a third partyimplementing agency, usually a multilateral,as is the model with other climate funds. It isseen as an �important development to securegreater national ownership over fundedactivities, whilst maintaining high fiduciarystandards and minimising transaction costs42.The Adaptation Fund Board has recentlyapproved its Operational Policies andGuidelines which allow eligible Parties, seekingfinancial resources from the Adaptation Fund,to submit proposals either directly throughtheir accredited National Implementing Entity(NIE) or using the services of MultilateralImplementing Entities (MIEs). All projectproposals require the endorsement of theauthority which has been designated by therelevant Government to make suchendorsements43.
In order to qualify for funding Nepal hassubmitted its fiduciary risk assessment withMinistry of Environment nominated as the
National Implementing Entity (NIE), and itawaits a decision. The government hopes thatseveral NAPA projects will be funded. WhetherNepal will be able to access direct funding willbe critical. Donors view this as a testing groundfor MoE to prove its capacity.
2.8 SOURCES OUTSIDE THE UNFCCC THROUGHDONOR FUNDING IN COUNTRY
There are a growing number of scatteredinitiatives classed as climate change activities,being funded by bilateral and multilateraldonors, as highlighted above and detailed intable 3 below. It is hard to obtain a clear pictureof all these initiatives from donors orgovernment partly because there are differingdefinitions between agencies of what constitutesa climate change programme and partly becausethere is a lack of coordination amongst donorsand within government between the variousministries that are implementing climatechange activities. The more significant piecesof funding are all in the form of projects eitherimplemented through Ministry of Environment,Ministry of Forests and Soil Conservation orMinistry of Agriculture through separate MoUsor contracted out to private companies andimplemented by NGOs. There has been anattempt to improve alignment with governmentand information sharing and coordinationbetween donors. MoE brought 14 donorstogether to sign a donor compact in September200944. Though no funding was guaranteedunder this it was seen as an important step inagreeing to harmonise and align actions onclimate change in support to the government.However little over a year on from signing thedonor compact indications are that there isdanger of further fragmentation, withdisagreements over PPCR, at the critical timewhen significant levels of funding for climatechange adaptation might start flowing45.
41In The Hands of Women: Climate Change Finances, Oxfam Internal Background Paper, Nidhi Tandon, Erich Vogt, June 2010)42Climate Finance Policy Brief No.4, Design Challenges for the Green Climate Fund, Bird, Brown and Schalatek, Heinrich Böll Stiftung and ODI, January 201143www.adaptation-fund.org
44Compact on Climate Change in Nepal: An Understanding between the Government of Nepal, Ministry of Environmental and development partners on ways toaddress climate change challenges, September 2009.45See table 3 which represent current funding sources, projects and government implementing agency.
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2.8.1 LOCAL ADAPTATION PROGRAMME/PLAN OFACTION (LAPA)
One of the most significant programmes indevelopment for climate adaptation comingthrough bilateral funding in country is the
Local Adaptation Programme of Action/ Reducing the Climatic Vulnerability of the Poor.During NAPA development the idea of Local
Adaptation Plans of Action (LAPA) weresuggested as a way to scale up community-based strategies and integrate top-down andbottom-up approaches to mainstreamadaptation into planning. Given the delaysand time constraints of NAPA it was concludedthat LAPA could not be taken up during NAPA planning. DFID agreed with MoE that it wouldtake on the funding and design, in closealignment with NAPA. The same consultantshave been used for design as were used in theearly stages of NAPA development. DFID�sintention is for LAPA to be its vehicle forfunding NAPA sectoral work at the communitylevel.
The LAPA is a plan prepared at the locallevel by a multi-stakeholder team including
vulnerable communities. It involvesdecentralised and bottom-up planning processesand aims to identify local adaptation needs. Itshould also strengthen institutionalmechanisms for ensuring consolidated andcoordinated adaptation responses. In a recentpaper on LAPA, Regmi and Karki lay out the
vision �to develop a system of adaptationplanning that does three things:
Enables communities to understandchanging and uncertain future climaticcondition and engage effectively in theprocess of developing adaptation priorities;
Implements climate resilient plans that areflexible enough to respond to changingclimatic and vulnerability conditions; and
Informs programmers and catalysesintegrated approaches between sectors46.
DFID has committed funding for four yearsfor the programme it calls �Reducing theClimatic Vulnerability of the Poor�. An initialpilot phase - which is currently underway - andsubsequent implementation, has approximately17.3m (£10,730,000) of DFID funding. The EU
is also likely to join a pooled fund for LAPA implementation. Indications are that the EUwill contribute a further Euro 19.4m(approximately $26.3m). The pilot phase ismanaged by the private consultancy firmHTSPE, and sub-contracted for implementationto seven NGO partners for implementationacross ten districts. Six of these projects followthe six NAPA themes. Although this is not fullyincorporated in NAPA, MoE sits on a SteeringCommittee and considers LAPA as integral to
NAPA. As the NAPA document states �Lessonslearned from LAPA�s implementation [will]contribute greatly to policy refinement andformulation�. Nepal considers need-basedLAPA as one of the practical approaches toanalyze critical and site-specific climate issuesand address them accordingly with peoples'participation�.
The NAPA implementation frameworkrecognises the important role of villagedevelopment committees and municipalities inlocal development planning with plans tosupport them to incorporate adaptationperspectives into their local development plans,aligning fully with the NAPA.
In recent discussions DFID made clear thatLAPA implementation would continue to gothrough a managing agent, given MoE�s capacityconstraints. MoE has stressed that fundingdoes not need to go through MoE but shouldgo through government, channelled to theappropriate line agencies. It is unclear how thiswill be resolved. As funding comes in to supportidenti f ied NAPA projects and ful limplementation of LAPA develops it is essentialthat these initiatives can remain linked andaligned. Ensuring that learning and capacityfor LAPA implementation is systematisedwithin government and shared widely with
46Regmi BR and Karki, G; Local Adaptation Plans in Nepal, Tiempo Climate Newswatch, issue 76, July 2010, pp 21 � 24.
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One of the existing models that LAPA
design...will draw on is that of the
Livelihoods and Forestry Programme
(LFP). This has been piloting a LAPA-
type approach to forest management
in over 300 VDCs since 2009. The
community forestry programme...has
helped enhance rural livelihoods -hence providing climate change
adaptation benefits - by conducting
wider l ivel ihoods-based and
community development activities at
the community level. Community
forestry has provided livelihood
opportunities...by using pro-poor
inclusive approaches that target poor
and disadvantaged people using
wealth ranking.
Key to the success of the LFP
programme (is) effective formalized
local inst i tut ions known as
Community Forestry User Groups.
The LFP supports the CommunityForestry User Groups by providing
technical and financial backstopping
to help them understand, plan and
implement forestry and climate
change related activities...The LFP
has recently started developing...
adaptive capacity...by systematically
developing Community Adaptation
Planning through community forestry.
This is done using exist ing
mechanisms such as Community
Forestry User Groups and Public and
Institutional Land Management
groups. The Community Adaptation
Planning programme covers 512
village development committees and2292 community groups (about 50
per cent of the total number of LFP
Community Forestry User Groups)
in 15 districts. Rather than creating
new mechanisms, the LFP has used
existing mechanisms to develop
community adaptation planning in
support of the most vulnerable
BOX 5: CASE STUDY: PILOTING LAPA IN NEPAL FROM REGMI, B AND KARKI, G.47
47Regmi BR and Karki, G; Local Adaptation Plans in Nepal, Tiempo Climate Newswatch, issue 76, July 2010, pp 21 � 24.
networks and active organisations, will be critical. It is too early to be drawing lessons from LAPA but its design and the pool of funding provide enormous potential to support vulnerable communitiesin the scale up of adaptation actions and integration of these into higher level processes. Usedstrategically LAPA and NAPA could mobilise further funding and continue to support acomprehensive and country-owned response to climate change adaptation.
Regmi BR and Karki. G; Local Adaptation Plans in Nepal, Tiempo Climate Newswatch,issue 76, July 2010, pp 21-24.
A FRAMEWORK FOR CLIMATE RESILIENT DEVELOPMENT
F i n a n c i n g
P r i o r i t y - s e t t i n g t r a d
e - o f f s
U r b a n
A g r i c u l t u r e a n d f o o d
s e c u r i t y
H e a l t h a n d s a n i t a t i o n
W a t e r a n d e n e r g y
I n f r a s t r u c
t u r e
T o u r i s m a n d i n d u s t r i e s
F o r e s t a n d b i o d i v e r s i t y
NAPA+ - Central multi-stakeholder coordination;lesson learning; knowledge management;
climate science
LAPAs: Community prioritises trade-offs;implementation tracking future climate; informing
integrated support from sectors.
FIGURE 2: NAPA+ AND LAPA - A FRAMEWORK FOR CLIMATE RESILIENTDEVELOPMENT
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2.9 CIVIL SOCIETY PROGRAMMES ANDCOORDINATION
There are a number of civil societyprogramme, research, and networkinginitiatives being undertaken on climate change.
As with current government programming,defining what constitutes a climate adaptation
programme is not entirely clear but initiativesare certainly growing within organisations anddiscourse is becoming more prominent. WWFhas been supporting the development of theClimate Change Policy with government andimplements two adaptation specific projects inLangtang and Indrawati river sub-basin. CARE,Oxfam and Practical Action are also activeinternational NGOs. LiBird is one of the mostprominent national NGOs, with Environmentand Public Health Organization (ENPHO),
Clean Energy Nepal (CEN), and FECOFUN(Federation of Community Forestry UserGroups in Nepal), Nepal Forum of Environmental Journalists (NEFEJ) alsoimportant actors.
With limited funding and a nascentknowledge base many of these organisationsare in the early days of addressing what the
uncertainty of climate impacts means to currentprogramming and are starting to reviewtheir projects to examine how to meaningfullyintegrate climate change adaptation intotheir work48. These experiences are vital toinforming policy and national-levelprogramming.
Several forums on climate change exist inthe country. The Climate Change NetworkNepal (CCNN) is a loose coalition of variousorganisations, including national andinternational NGOs and donors including DFID,JICA and UNDP. The forum was establishedto share information. It meets several times ayear. The NGO Group on Climate Change is aforum of local-level organisations working onthe ground on climate change, set up with astrong community-based focus as an
information-sharing platform. CAN Nepal is aloose alliance of organisations who are membersof Climate Action Network South Asia(CANSA). CANSA is the regional node Climate
Action Network International. The mainobjective of the alliance is to disseminateinformation, discuss and lobby on climatepolicies at a national and international level.It organises various events and workshops to
communities and people. The
process started with sensitization of
local communities on climate change
issues, developing guidelines for field
facilitators/ practitioners, enhancing
the capacity of more than 500 local
facilitators/community practitionerson vulnerability assessment and
adaptation planning, and supporting
the preparation of adaptation
plans...targeting poor and vulnerable
households. The Community Forestry
User Groups and their network
provide very strong sustainable
grassroots-level institutions that can
take the lead on natural resources
conservation and management. The
piloting of local-level adaptation
planning and community-basedadaptation is done by mobilizing
these 300 User Groups and the
Village Development Committee-level
forestry coordination committees.
The programme has also established
grassroots-level community-based
adaptation funding to help innovative
users and vulnerable households
access resources and obtain support
for their adaptation plans. The LFP
initiatives...provide good lessons for
LAPAs. The NAPA will build onlearning from the LFP, particularly
from the pilot projects, on institutional
design, institutional linkages and
natural resource management
interventions.
48SAGUN and Libird, Climate Change Impacts on Livelihoods of Poor and Vulnerable Communities and Biodiversity Conservation: A Case Studyin Banke, Bardia, Dhading and Rasuwa Districts of Nepal, CARE Nepal, 2009
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inform climate negotiations at the internationallevel. Only NGOs and INGOs can be membersof the alliance. Representatives of NGOs arealso on the MCCICC and the Climate ChangeCouncil though the lack of formal and detailedterms of reference for both these bodies and
any contractual arrangements for memberslimits their effectiveness and the degree towhich they can serve as accountablerepresentatives.
As these are loose and informal alliances,representing a large and diverse number of organisations coordination and effectiveinformation flow is a challenge. Activity hastended to be centred in Kathmandu anddominated by the larger international and
national NGOs. However some deliberate crossover in membership between the networks,attempts to make better linkages and increasingattention to organisation and information flowis beginning to address these weaknesses. Lackof legal status can also a barrier to progressingwork and dialogue with policy makers. Thereis some resistance to spending time and energyon formalising these platforms amongstmembers, who have little spare time andresources and believe their work is inimplementation at the community level. Thedifficulty comes in presenting a coherent andinformed voice to policy makers and ensuringthat the evidence from programming and localknowledge feeds into decision making. Clearlythese NGOs are not the sole purveyors. Howeverthey are often at the forefront of working withcommunities and community organisations;innovating, piloting initiatives and seeing theresults of policy implementation. As a collectivethey have strength in this experience and theirbreadth and diversity. Finding ways to poolthis knowledge and effectively communicate todecision makers is critical to informing strongdebate and influencing successful policymaking.
These networks have not yet played asignificant role in gathering information andadvocating around financing and governanceat the national level, although recently therehas been a fairly strong collective voiceadvocating against the PPCR loan. This is in
part because discussions tend to be held behindclosed doors and the issues are opaque. Howeverthese alliances can be maximised by membersexamining the impact, or lack, of currentfinancing and governance models on climateprogrammes in the communities where theywork and use platforms strategically to agreecommon key policy objectives and actions. Toachieve this entails a level of structure andformalisation as well as the need for dedicatedresources.
As climate adaptation initiatives are growingand organisations struggle to understand whatthis means to their programming, there is anincreasing need to prioritise good knowledgemanagement practices. It is critical thatresources and capacity are put into buildingknowledge and gathering evidence todemonstrate what is working and what is notworking. Only once this is happeningsystematically, can successful actions be scaledup, learning more widely shared and effectivepolicy and advocacy platforms built. The mediahas a growing voice and private sector,parliamentarians and government institutionsat the local level are also critical players.Climate networks need to reach out toeducational institutions and the scientificcommunity as well as build stronger linkagesto the media and parliamentarians. Thesealliances need to continue to explore effectiveways to reach out, represent their membersand be strategic in their actions. A futureclimate model must incorporate sufficientresources, separate to project implementation,for civil society to play the information,coordination and watchdog role that isdesperately needed.
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5 1 U n i t e
d N a t i o n s E n v i r o n m e n t P r o g r a m m e ,
G l o b a l E
n v i r o n m e n t F a c i l i t y , C l i m a t e C h a n g e E x p e d i t e d F i n a n c i n g ( I n t e r i m ) , M e a s u r e s F o r C a p a c i t
y B u i l d i n g I n P r i o r i t y A r e a s ( P a r t I I ) ,
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j e c t D o c u m e n t a n d
g e f o n l i n e . o r g
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C h a n g e
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f o r D i s a s t e r P r e p a r e d n e s s
a n d C l i m a t e R i s k
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MINDING THE MONEY: GOVERNANCE OF CLIMATE CHANGE ADAPTATION FINANCE IN NEPAL 31
M I T I G A T I O N A N D C A R B O N M A R K E T S
N e p a l S w i s s C o m m u n i t y
F o r e s t r y P r o j e c t
S w i s s D e v .
C o o p e r a t i o n
( S D C )
L i n k i n g c o m m u n i t y f o r e s t u s e r g r o u p s t o c a r b o n
m a r k e t s a n d s t r a t e g y d e v e l o p m e n t a n d
p r e p a r a t i o n f o r R E D D
R e d u c i n g E m i s s i o n s f r o m
D e f o r e s t a t i o n i n D e v e l o p i n g
C o u n t r i e s ( R E D D )
K a t h m a n d u S u s t a i n a b l e
U r b a n T r a n s p o r t ( S U T )
P r o j e c t
A l t e r n a t i v e E n e r g y
P r o m o t i o n C e n t r e
( A E P C ) / E n e r g y S e c t o r
A s s i s t a n c e P r o g r a m m e
( E S A P )
R e n e w a b l e E n e r g y P r o j e c t
B i o g a s P r o j e c t
B i o g a s P l a n t s
V a r i o u s - m u l t i -
d o n o r t r u s t f u n d
D A N I D A
N o r w e g i a n
E m b a s s y
E U
W o r l d B a n k
G e r m a n y
3 . 2 m
2 . 8 m
3 0 m 2 2 m
2 1 m
7 m
3 1 m
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( C H F 4 . 2 m )
W o r l d B a n k
A D B
K F W
M o F S C
M P P W
A E P C
M o F S C
2 0 1 0 - 2 0 1 4
2 0 0 7 - 2 0 1 2
2 0 0 4 - 2 0 1 2
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2 0 0 8 - 2 0 1 1
R E D D c e l l e s t a b l i s h e d a n d N e p a l i s w o r k i n g
t o w a r d s t h e p r e p a r a t i o n
o f t h e r e a d i n e s s p l a n .
E n e r g y S e c t o r A s s i s t a n c e P r o g r a m m e � b u i l d i n g
c a p a c i t y f o r A E P C t o f u n c
t i o n a s n a t i o n a l r e s o u r c e
c e n t r e s f o r a l t e r n a t i v e e n
e r g y p r o m o t i o n
C r e a t i n g r e n e w a b l e e n e r g y i n f r a s t r u c t u r e i n 2 1
d i s t r i c t s
T o r e d u c e g l o b a l e m i s s i o
n s o f c a r b o n d i o x i d e ,
t w o b i o g a s o p e r a t i o n s a r e b e i n g s u p p o r t e d .
T h i s
p r o j e c t a i m s t o i n c r e a s e a c c e s s t o m o d e r n e n e r g y
s o u r c e s i n t h e r u r a l a n d p e r i - u r b a n a r e a s o f N e p a l
U s e o f u n d e r g r o u n d ' d i g e s
t e r s ' t h a t u t i l i z e b a c t e r i a
t o g e n e r a t e m e t h a n e g a s f r o m c a t t l e d u n g .
F o r e s
t r y C a r b o n
P a r t n
e r s h i p F a c i l i t y
G E F T r u s t F u n d
4 0 m
S c a l i n g U p R e n e w a b l e
E n e r g y P r o g r a m m e
( S R E P )
T h e p r o j e c t p r o p o s a l a p p
r o v e d b y t h e S R E P
E x p e r t g r o u o p a n d d e c i d
e d t o f i n a n c e .
C l i m a
t e I n v e s t m e n t
F u n d s
V a r i o u s - m u l t i -
d o n o r t r u s t f u n d
A D B
M o E
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CLIMATE FINANCE MARKED BY FRAGMENTATIONAND UNPREDICTABILITY:
Similar to the financing of development inNepal, the financing for climate changeadaptation has been fragmented anddisconnected. Funding has been unpredictable
and piecemeal, impacting on the possibility of long-term national planning and commitmentand delivery of resources and support to
vulnerable communities. Given the conflict andpolitical uncertainty that has followed, the aideffectiveness agenda has struggled to makemuch progress. Although a donor compactachieved some success in improving donorcoordination it commits but does not bind donorsto a set of principles and does not indicatefinancial commitments or modalities. Attention
is being paid to developing a national financingmodel and governance framework but progressis slow and getting traction is challenging whilstgaps in expectation between government anddonors remain extremely wide.
STRUCTURES ARE BEING PUT IN PLACE AND POLICYAND PLANNING PROGRESS MADE:
The Ministry of Environment has been madethe focal point for climate change efforts. A
specific Climate Change Management Divisionis being established. A high-level policy and
coordination body has been established underthe leadership of the Prime Minister and amulti-stakeholder committee to coordinateinitiatives at the programme level is alsofunctioning. These are significantachievements. Much expectation was placedon NAPA to galvanize efforts and build a
strategic and harmonised platform for actionand finance. The momentum built in the earlydays of NAPA managed to progress efforts toimprove donor coordination with achievementssuch as the signing of the donor compactbetween Ministry of Environment and a numberof donors; and alignment behind NAPA andthe Ministry of Environment with additionalpooled funding from donors in-country. NAPA has been credited by many with being aconsultative and inclusive process that has
gone a long way to narrow the gap in currentknowledge and identified needs.
...BUT RESOURCES AND CAPACITY ARE LACKING:
MoE is severely constrained by a lack of human resources and has been largelydependent on technical assistance inputs fundedby donors, in the form of consultants. TheMinistry questions to what degree this hasactually built capacity and institutionalised
learning but whilst the systems and technicalcapacity are not sufficiently present within the
3CONCLUSIONS
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civil service currently institutionalising thiscapacity will remain a challenge. The newlyformed climate division does not yet have theresources, capacity or authority it needs. Thereare a number of ongoing pieces of separatecapacity building initiatives funded by donors.
The most significant of these is a technicalassistance project from ADB that should resultin the institutional and financial frameworkfor climate change and developing professionalskills. It is hard to see how these various pieceslink up and become part of an overall strategy.Unless its staff and technical capacity areaugmented soon the MoE will struggle tomanage the growing climate change projectportfolio. Since the NAPA document wasfinalised, action has been taken on several
areas of coordination and knowledgemanagement. However securing significantlevels of funding for projects remains unclear.What looks likely is funding for NAPA projectswill come from various different mechanisms,divided between different donor implementingagencies.
NAPA RECOGNISES THE NEED TO DELIVERRESOURCES TO THE LOCAL LEVEL AND LAPA
PRESENTS A POSSIBLE MODEL BUT THERE AREBOTTLENECKS TO OVERCOME:
NAPA also leaves many of the more detailedquestions of adaptation implementationunanswered. There are concerns about theamount of time it will take to significantlyoperationalise NAPA. Under the coordinationof a relatively small and nascent ministry itwill be critical to figure out how to remainstrategic and effectively channel funds, through
a number of larger implementing line ministriesto the district level and down. MoE needspolitical backing and authority acrossgovernment. Although there have beenimprovements in financial management withchannels of funding to the local level more openthan before, there are still many bottlenecks,particularly at the district level. Linkages withthe Ministry of Local Development and the
Local Government Capacity DevelopmentProgramme are critical. Lessons from LAPA piloting are not yet clear, but if the pilotsdemonstrate success there will be much to learnabout successful community adaptation actionsand integrated development planning. With
funds from DFID and EU for a large programmelined up tensions on the funding modality forLAPA need to be overcome to ensure that MoEremains meaningfully engaged and LAPA continues to be aligned to NAPA. If presentconditions mean DFID and EU will channelfunding for LAPA outside government thisneeds to be put within a larger discussion aboutcommitments towards the long-term financingframework. In the meantime other institutionalmechanisms could be put in place to ensure
MoE and the government remain centrallyengaged and do not feel alienated.
GLOBAL CONTROVERSY OVER PPCR GOVERNANCEAND FINANCE PLAYS OUT AT THE NATIONAL LEVELBUT THERE HAVE BEEN SOME ACHIEVEMENTS INALIGNMENT:
There is palpable disappointment amongststakeholders in how PPCR has been developed
and concern that the programme will beimplemented with limited national ownership.However, there have been some successes inaligning the PPCR with Nepal's NAPA. Theproposed grant component is likely to be thefirst piece of significant funding explicitly forclimate change adaptation and national systemstrengthening. Stakeholders should continueto use existing forums and networks to engagewith PPCR and push to influence itsimplementation in alignment with NAPA.
In addition, the loan element is becomingincreasingly contentious amongst domesticconstituencies. Considerable additional analysisand discussion is required to clarify the issueand decide on the best course of action in thespirit of the Nepal Government�s recently issuedclimate change policy and Nepal�s position asa leading LDC affected by climate change.
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PROMOTING SOCIAL EQUALITY IN CLIMATEADAPTATION NEEDS TO EXPLICITLY ADDRESSRESOURCE DISTRIBUTION AND INSTITUTIONALSTRUCTURES, MOVING FROM ANALYSIS TOIMPLEMENTATION:
Whilst the differentiated impacts of climatechange on social groups and between men andwomen have been relatively well examined andunderstood, moving from this to developingeffective strategies within programmes presentsa greater challenge. There is much heateddebate at the international level on �distributive
justice� (deciding equitable use of resourcesbetween countries) and �thematic balance�(between mitigation, adaptation, technology
transfer and capacity building)53
. Theseconsiderations also need to filter down to thenational level to consider appropriatemechanisms for fair resource distributionbetween and within communities. Existingfunding mechanisms are not designed to deliverresources that prioritise the most vulnerable.NAPA planning incorporated a significantexamination of gender and vulnerabilitydimensions and has paid attention to this inthe implementation framework to some extent
by incorporating the need for gender and socialinclusion analysis at the local level but it ishard to see how this translates into currentproject profiles and corresponding activitieswhen it is absent in objectives, outputs andoutcomes. Gender also seems to be largelymissing in PPCR design. It is too early in Nepalto assess the extent to which gender and socialequity ambitions on paper translate into actionbut unless policies and programmes are moreexplicit about how activities address the
different needs of poor men and women thereis a danger it will not happen in practice.
CIVIL SOCIETY FORUMS ARE ACTIVE AND
CONSULTATIVE SPACES INCREASING BUT
IMPROVING INFORMATION FLOW AND INFLUENCING
POLICY NEEDS STRATEGY AND DEDICATED
RESOURCES:
Civil society forums on climate change are
progressively more active and vocal. They arebeing invited into planning and consultationspaces and their voices increasingly heard.There are positions for civil societyrepresentation on the MCCICC and �nominatedexperts� on the climate change council are from
NGOs. More formal, detailed terms of referenceand contractual relationships for members of these bodies would add greater legitimacy andweight to their presence. The main civil societycoordination bodies are disconnected, not bestserving effective dialogue, policy influence andinformation flow. Lack of legal status for thekey civil society networks and dedicatedresources for coordination and informationsharing limit their potential. As programmingdevelops and opportunities for funding open
up, coordination and convergence betweenorganisations will be important to ensure fundsflow effectively down to the local level targetingthe most appropriate projects and people.
BUILDING AN EVIDENCE BASE FOR SUCCESSFULADAPTATION:
There a number of civil society organisationssupporting community adaptation through a
variety of projects. Knowledge management
needs to be more centrally prioritised in orderto build a sound evidence base for scaling upcurrent efforts and sharing learning widely.NAPA has begun to do this through theestablishment of the MCCICC and the ClimateChange Knowledge Management Centre but itis early days and there are many civil societyorganisations beyond the scope of current NAPA initiatives, working directly or indirectly onclimate adaptation actions with vulnerablecommunities. In particular evidence of effectivegender transformative activities and challengesare needed.
INCREASED FUNDING WITHOUT BETTERHARMONISATION AND ALIGNMENT INCREASES THEBURDEN ON ALREADY WEAK INSTITUTIONS:
In the absence of a coordinated mechanismto capture climate change adaptation fundingthere is a real fear that funds will increase and
53Müller, B. �The Time is Right! Devolution of funding decisions to designated national/regional climate change funding entities�, November2009, Oxford Institute for Energy Studies, p. 1
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the number of different modalities and agenciesinvolved will continue to proliferate andfragment. Whilst government juggles thedifferent modalities, with more fundingexpected, MoE will struggle to strategicallymanage the different strands without better
harmonisation and a clear commitment fromdonors of how they will pool resources andinitiatives in support of development of nationalsystems. This could depend to a large degreeon the government�s leadership in identifyingresources and clear plans for the ClimateChange Management Division as well as abeing able to produce a sound proposal for anational funding entity. It could also dependon the degree to which donors are forthcomingin agreeing to a joint position on their minimum
criteria for channelling funding, and workingwith government on a roadmap to get there.Domestic stakeholders must not be left out of these discussions. Wide consultation andparticipation in design will help to promoteownership and engagement, which will be vitalfor any transformative action on climate changeadaptation. If MoE is accredited by the
Adaptation Fund and manages to obtainfunding it may help to further propel theseefforts but this is currently unknown. Interimoptions must be considered, whilst MoE�scapacity is strengthened. Channelling fundingthrough another entity following a model suchas the Alternative Energy Promotion Centre
(AEPC), with MoE providing oversight andcoordination, are two such options.
The challenge to respond effectively to therealities of climate change is clearly formidable.
Action at the national level is undoubtedly only
part of a much greater, more complicatedpicture. Decisions at the international levelwill have enormous bearing on the progressthat Nepal is able to make. However asufficiently resourced, sustained and nationallyowned programme of action is needed. A programme that can deliver resources and toolsto enable poor and marginalised communitiesto adapt, that places women at the forefront of this change and prevents any further slowingin the gains that have been made in
development. There are concrete steps thathave been made, but progress is fragile. Withthe almost simultaneous emergence of NAPA,PPCR and LAPA coming together with a climatechange policy and proposals for establishmentof a climate fund, it is essential to pull unlinkedinitiatives together. Donors must coalesce andstrive to find a common, robust and accountablemechanism that can channel funds to supportnational systems and effective climate changeadaptation to the most vulnerable. If thebarriers can be overcome there is an opportunityfor these actions to chart a new path forsustainable development in Nepal.
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4RECOMMENDATIONS
GOVERNMENT OF NEPAL
Immediate areas to address regarding the
organisational structure of Ministry of
Environment and climate change activities
Decide exact mandate of MoE, its role andfunctions and how it will interlink with otherministries, agencies and departments onclimate change. Communicate this withingovernment.
Map existing resources with current andproject programmes to clearly assess thecapacity gap in terms of financial and humanresources and what would be need to fillthis.
Fill current vacant positions within MoE.
Furthering Climate Planning and Policy
Develop a long term climate change strategic
plan to underpin the climate change policy.
Review current relevant legislation andconsider where this can be strengthened.Consider drafting of new legislation to betterenforce areas of the climate change policy.
Development of an institutional structure
and national funding entity
Take greater leadership in developing andagreeing a detailed roadmap with milestones
for expediting the establishment of a nationalclimate finance entity that garners sufficient
trust, is transparent and robust and alignedclosely with national systems. Look to betteraid effectiveness models where these do existand draw lessons for climate funding.
Put forward immediate interim options forchannelling funding through another entityoutside of government that MoE can have arole in terms of administration and oversight.
In the establishment of an institutionalframework develop clear principles andstrategies around promotion of gender andsocial equity, considering how theseprinciples can be reflected within thegovernance structure as well as distributionof resources, thematic areas andprogramming. Build these into anymonitoring and evaluation framework.
Build in windows for on-budget (for public
sector projects) and off-budget (for civilsociety projects).
Ensure these processes incorporate broadconsultation and progress towards developingthe institutional framework is communicatedwidely to stakeholders.
Develop detailed terms of reference and cleararrangements for decision making bodiesand coordination fora under government.
Clarify how the MCCICC, Climate ChangeCouncil, Climate Change Knowledge
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Management Centre and planned ClimateChange Centre will interact and coordinate.
Oversight and Accountability
Revive the Natural Resources andEnvironment Committee with dedicated
resources, ensuring cross party expertise.
Conduct information sessions in parliamenton key climate change issues, programmesand policy.
DONORS
Capacity Building Initiatives
Jointly commission an external independentreview of current capacity building initiativesto assess areas of progress and weaknessand make recommendations going forward.
Re-examine the current fragmentedapproach to capacity building and work
jointly on pooling assistance, using therecently approved Climate Change Policy asan overarching framework from which todevelop a convergent long term strategy forstrengthening climate change capacity withinthe MoE and other agencies.
Support further strengthening of thegovernment�s financial and procurementmechanisms with suitable monitoring totrack improvements.
Finance and Coordination
Develop one pooled multi-donor trust fundas an interim mechanism that can begin tofoster alignment and harmonisation. As an
interim measure agree options with GoN forchannelling this through an entity outsideof government.
Clearly communicate minimum conditionsfor channeling current funding through anational level climate fund.
Ensure experiences and constraints of institutional practices as they play out at anational level are fed back to headquarters.
Donors should ensure that climate change
financing is in addition to and does notdisplace any existing ODA commitments.
CIVIL SOCIETY
Formalise and improve coordination,
broaden coalitions and build evidence
Prioritise joint working to improve knowledgemanagement and evidence building onadaptation efforts.
Agree common policy objectives and prioritise joint actions across networks and advocateon these with policy makers.
Consider organising a regular forum to bringnetworks together.
Consider legalising networks and puttingdedicated resources behind a nationalsecretariat. Seek funding and support outsideof Nepal.
Reach out to make linkages withparliamentarians, educational and researchinstitutions and media organisations.
Ensure country experiences on finance,governance, policy and programming isfeeding into and informing internationalforums.
Finance Model and Governance
Push for consultation and participation indecision making with government and donorson a national funding entity and governancestructure. Ensure positions are clear andinformed and have buy-in of members.
Advocate for dedicated resources in climateadaptation projects for gathering evidenceand sharing information.
Advocate for need for sufficient oversightand accountability mechanisms to be builtinto the institutional structure and a clearrole and legitimacy for civil society.
Advocate for civil society resource envelop
and clear decision making structure onresource allocations.
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A d a p t a t i o n
F u n d B o a r d
M o s t l y A n n e x I / I I
P a r t i e s p l u s s o m e
o t h e r c o u n t r i e s
F u n d i n g a n d i m p l e m e n t a t i o n a t N e p a l l e v e l
F u n d i n g a n d g o v e r n a n c e a t g l o b a l l e v e l
K y o t o P r o t o c o l
S p e c i a l C l i m a t e
C h a n g e F u n d
A d a p
t a t i o n F u n d
$
C l e a n D
e v e l o p m e n t
M e c h a n i s m
& o t h e r s o u r c e s
$
' D i r e c t a c c e
s s ' N o f u n d i n g
c u r r e n t l y b u t
M o E n o m i n a t e d
a s N a t i o n a l I m p l e m e n t i n g
A g e n c y . A w
a i t i n g d e c i s i o n
1 0 p o s s i b l e G E F i m p l e m e n
t i n g a g e n c i e s , r e s p o n s i b l e f o r c r e a
t i n g p r o j e c t
p r o p o s a l s a n d f o
r m a n a g i n g G E F p r o j e c t s i n c o u n t r y .
C l e a n
T e c h n o l o g y
F u n d
C I F s W
B T r u s t e e
1 3 c o u n t r i e s
$
S t r a t e g i c
C l i m a t e
F u n d
F I P
S R E P
P P C R
$ 2 2 5 , 0 0 0
$ 4 1 0 , 0 0 0
W o r l d B a n k
A D B
U N E P
D F I D
D a n i d
a
$ 2 0 0 , 0 0
0
$ 8 7 5 , 0 0
0
G o v e r n m
e n t o f N e p a l
M o E
P P C R I m p l e m e n t a t i o n
t e n t a t i v e b u d g e t 1 1 0 m
l o a n
a n d g r a n t
N A P A
i m p l e m e n t a t i o n
b u d g e t 3 5 0 m . N o
F u n d i n g y e t
N A P A +
d e v e l o p m e n t
' E n a b l i n g
a c t i v i t i e s '
g r a n t s
P P C R
d e v e l o p m e n t
P P C R P I U
N A P A P I U
G E F T r u s t F u n d
U N D P
$ 5 0 , 0 0 0 =
1 . 3 2 5 m .
$ 2 0 0 , 0 0 0
L e a s t D e v e l o p e d
C o u n t r i e s F u n d
G l o b a l E n v i r o n m e n t F a c i l i t y ( G E F )
W B T r u s t e e
U N F C C C / C l i m a t e C h a n g e S e c r e t a r i a t
C o n f e r e n c e o f t h e P a r t i e s
F I G U R
E 3 : I N T E R N A T I O N A L C L I M A T E F U N
D I N G A R C H I T E C T U R E A N D L I N K S T
O M A I N C L I M A T E A D A P T A T I O N P R O
G R A M M E S I N N E P A L
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Conference of the Parties (COP)
The supreme body of the United National
Framework Convention on Climate Change(UNFCCC) Convention. It currently meets oncea year to review the Convention's progress. Theword "conference" is not used here in the senseof "meeting" but rather of "association," whichexplains the seemingly redundant expression"fourth session of the Conference of the Parties."
Global Environment Facility (GEF)
The Parties to the Convention assignedoperation of the financial mechanism to the
Global Environment Facility (GEF) on an on-going basis, subject to review every four years.The financial mechanism is accountable to theCOP, which decides on its climate changepolicies, programme priorities and eligibilitycriteria for funding,
Global Environment Facility Trust Fund
The common funding resource of the GlobalEnvironment Facility (GEF). Climate Changeis one of the six focal areas supported. The
objective of this part of the fund is to helpdeveloping countries and economies intransition to contribute to the overall objectiveof the UNFCCC. The projects support measuresthat minimize climate change damage byreducing the risk, or the adverse effects, of climate change. The GEF Trust fund hasreceived a total of $10.885 billion during fourreplenishments. There are 39 donors that havecommitted funds: Argentina, Australia, Austria,Bangladesh, Belgium, Brazil, Canada, China,
Côte d�Ivoire, Czech Republic, Denmark, Egypt,Finland, France, Germany, Greece,
India, Indonesia, Ireland, Italy, Japan, Republicof Korea, Luxembourg, Mexico, Netherlands,
New Zealand, Nigeria, Norway, Pakistan,Portugal, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Switzerland, Turkey,United Kingdom, and the United States.
Least Developed Countries Fund (LDCF)
Set up to address the needs of the 48 LeastDeveloped Countries (LDCs) that are especially
vulnerable to the adverse impacts of climatechange. Supports a work programme to assistLeast Developed Country Parties (LDCs) carry
out, inter alia, the preparation andimplementation of NAPAs To date, the fundhas 19 donors: Australia, Austria, Canada,Denmark, Finland, France, Germany, Ireland,Italy, Japan, Luxembourg, Netherlands, NewZealand, Norway, Portugal, Spain, Sweden,Switzerland, and United Kingdom.Contributions of about $180 million have beenreceived for the LDCF; the target in the nextfour years is to reach $500 million, which isthe amount estimated by the UNFCCC needed
to finance NAPA implementation as well as tomove toward a four-year replenishment process.
Special Climate Change Fund (SCCF)
To implement long-term adaptationmeasures that increase the resilience of nationaldevelopment sectors to the impacts of climatechange. The SCCF should serve as a catalystto leverage additional resources from bilateraland other multilateral sources. The Parties tothe Climate Convention identified adaptation
to climate change as the top priority of theSCCF, and that technology transfer and its
EXPLANATORY NOTES (FIGURE 3)
Sources: unfccc.in, gef.org, gefonline.org;climateinvestmentfunds.org, adpatationfund.org andclimatefundsupdate.org
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associated capacity building activities asanother essential area for funding. 14 funders:Canada, Denmark, Finland, Germany, Ireland,Italy, Netherlands, Norway, Portugal, Spain,Sweden, Switzerland, United Kingdom andUnited States. As of May 31, 2010, the total
amount deposited is USD eq. 110.48 million,97m disbursed.
Adaptation Fund (AF) and Adaptation
Fund Board (AFB)
The Adaptation Fund is supervised andmanaged by the Adaptation Fund Board (AFB).Upon invitation, the GEF provides secretariatservices to the AFB and the World Bank servesas trustee of the Adaptation Fund on an interimbasis. The Adaptation Fund finances concrete
adaptation projects and programmes indeveloping countries that are Parties to theKyoto Protocol. It is financed with a share of proceeds from the Clean DevelopmentMechanism (CDM) project activities and fundsfrom other sources. The share of proceedsamounts to 2% of certified emission reductions(CERs) issued for a CDM project activity. Asof November 2010, the total amount pledgedto the Adaptation Fund, including CERs, isUSD 216.15 million and the total amountdeposited, including CERs, is USD 202.11million. The Adaptation Fund received 10funding proposals up to September 2010, witha total requested funding amount of USD 60.9million. The Adaptation Fund allows directaccess to the fund by parties, as opposed tothrough a multilateral institution, as is themodel of other funds. It has accredited three
National Implementing Agencies: the Centrede Suivi Ecologique from Senegal, the PlanningInstitute of Jamaica and the Agencia Nacionalde Investigacion e Innovacion of Uruguay. Thefollowing multilaterals are also accredited asimplementing agencies: UNDP, the World Bank,
ADB, the International Fund for AgriculturalDevelopment (IFAD), UNEP and the WorldFood Programme (WFP). It has so far approvedtwo projects in Senegal and Honduras,amounting to approximately $14.3m andendorsed six more.
Climate Investment Funds (CIFs)
Two funds to help developing countries pilotlow-emissions and cl imate-resi l ientdevelopment. 45 developing countries are
piloting projects. The CIFs are channeledthrough the African Development Bank, AsianDevelopment Bank, European Bank forReconstruction and Development, Inter-
American Development Bank, and World BankGroup. The funds are disbursed as grants,highly concessional loans, and/or risk mitigationinstruments. There are 13 countries providingfunding: Australia, Canada, Denmark, France,Germany, Japan, Netherlands, Norway, Spain,Sweden, Switzerland, UK, US. $6.1b pledged.The CIFS are divided into two funds: the CleanTechnology Fund ($4.5b) and the StrategicClimate Fund ($1.9b). The Strategic ClimateFund supports three programmes, one of whichis the Pilot Programme on Climate Resilience(PPCR), currently under development inNepal.
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K E
Y I S S U E S
R e l a t i o n s h i p b e t w e e n B o a r d a n d
C O
P ; b o a r d i s a c c o u n t a b l e t o ,
u n d e r t h e g u i d a n c e o f , a n d u n d e r
t h e
a u t h o r i t y o f t h e C O P ?
W B
a s t r u s t e e f o r h o w l o n g ?
F u n d m o b i l i s a t i o n t o g e t t o
$ 1 0 0 b n .
A f u n d o f f u n d s o r c o - e x i s t i n g
f u n
d ? A n d w i l l W B i n v o k e t h e
S u n s e t c l a u s e o n t h e C I F s ?
D i s
b u r s e m e n t � d i r e c t a c c e s s ?
L o a n s , g r a n t s , g u a r a n t e e s e t c ?
G r e e n C l i m a t e F u n d B o a r d :
2 4 m e m b e r s ,
e q u a l n o d e v e l o p e d a n d
d e v e l o p i n g , r e g i o n a l g r o u p i n g s ,
S I D s a n d L D C s
S e c r e t a r i a t
U
N F C C C C O P
G r e e n C l i m a t e F u n d :
3 0 b n 2 0 1 0 - 2 0
1 2 , 1 0 0 b n / y r . b y 2 0 2 0
T r u s t e e ( W B
i n t e r i m )
O t h e r e x i s t
i n g f u n d s
u n d e r U
N F C C
a n d o u
t s i d e
P R O P O S
E D
I N T E R N A
T I O N A L
A R C H I T E
C T U R E
O U T L I N E N A T I O N A L
A R C H I T E C T U R E
$
D o n o r p o o l e d f u n d
N a t i o n a l - l e v e l p l a n n i n g , s y s t e m
s t r e n g t h e n i n g a n d i m p l e m e n t a t i o n
D i s t r i c t a n d c o m m u n i t y - l e v e l a d a p t a t i o n
p r o g r a m m e s
C i v i l s o c i e t y
f o r u m s a n d
n e t w o r k s
C l i m a t e C h a n g e C e n t r e
C l i m a t e F u n d
B o a r d
N a t i o n a l I m p l e m e n t i n g
E n t i t y ( M o E o r o t h e r )
C r o s s c u t t i n g p r i n c i p l e s a n d g o a l s m o n i t o r e d a t e a c h l e v e l o n g e n d e r , a n d s o c i a l e q u i t y
C l i m a t e T r u s t F u n d ( N
e p a l )
W i n d o w s f o r C S , p u b l i c s e c t o r a n d
t h e m a t i c a r e a s
G o N
$
$
N a t u r a l R e s o u r c e s a n d E n v i r o n m e n t
P a r l i a m e n t a r y C o m m i t t e e
$ $
$
C o m
m i t t e e
C o m m i t t e e
C o m m i t t e e
R e g i o n a l a n d d i s t r i c t u n i t s
( g o v e r n m e n t a n d o t h e r )
R e g i o n a l a n d d i s t r i c t u
n i t s
( g o v e r n m e n t a n d o t h e r )
R e g i o n a l a n d d i s t r i c t u n i t s
( g o v e r n m e n t a n d o t h e r )
F I G U R
E 4 : P R O P O S E D C O U N T R Y L E V E L O U T L I N E F O R N A T I O N A L I N S T I T U T I O N A L S T R U C T U R E
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Climate Trust Fund
Options to establish a new semi-autonomousbody, a body directly under GoN/MoE or opena window under existing Fund, such as theEnvironment Protection Fund.
Separate windows for CS, public sector and
thematic areas. Clearly earmarked funds andcriteria for decisions over allocation of resources.
Climate Fund Board
New provisions and fiduciary standardsformulated to govern it.
Climate Change policy as guidance.
Members of government, private sector, cross-parliament, civil society and technical experts.Gender balance on the board. Regionalrepresentation.
Donors observer status.
Responsible for drawing up criteria andguidance to select national implementing entityand sub-national entity(ies)
Responsible for high-level finance, policy andstrategic guidance
Establish separate committees on finance,programmes, as appropriate. MCCICC foldedinto a committee or continues to operate as is.
Climate Change Council folded into the Boardbut appointments reconsidered according toclear criteria and guidelines
National Implementing Entity
Under authority of Fund Board
Possibly MoE with sufficient human resourcesand legitimacy, a new body or other existinginstitution
Acts as focal point and main coordination body.
Implementation of national Climate Change
Policy and Strategy
Oversees implementation of climateprogrammes
Monitoring, reporting
Climate Change CentreResearch and technical guidance.
Responsible for regularly publishing anddisseminating information about fundedprogrammes and climate research.
Donor pooled fund
Short-term minimum requirement for donorsto set up a donor trust fund to pool funding.MDBs continue to channel money through
government for Climate Fund.Interim as projects phase out and to capturesmall levels of in-county funding, possible TA etc.
Donors nominate lead donor to channel fund �such as under Nordic Plus Agreement.
Watchdog Body/Parliamentary Committee
Separate funding stream for funding watchdogbody. Existing parliamentary committee to be
reviewed and properly resources. Examinepossibility of funding separate watchdog bodyto provide independent scrutiny in coordinationwith parliamentary committee. Committee of civil society, academia and parliament members.
Adaptation programmes - other
government agencies, civil society, private
sector
Funding to government agencies. Specificwindow or % for civil society and public privatepartnership initiatives.
EXPLANATORY NOTES (FIGURE 4)
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ADB Technical Assistance Report, �Federal Democratic Republic of Nepal: Strengthening Capacity
for Managing Climate Change and the Environment�, Nov 2008
World Bank/ ADB/ IFC , � Aide Memoire, Nepal: Pilot Program for Climate Resilience (PPCR) World
Bank/ ADB/ IFC Joint Mission, 15-21 November 2010�, 23 Novmeber 2010
Bird, Brown and Schalatek;, �Design Challenges for the Green Climate Fund�, Climate Finance
Policy Brief No.4, Heinrich Böll Stiftung and ODI, January 2011
Central Bureau of Statistics, National Planning Commission, �National Population and Housing
Census�, Nepal, 2001
Central Bureau of Statistics, National Planning Commission , � Statistical Yearbook of Nepal�,
Government of Nepal, 2009
DFID, �Country Business Plan in Nepal, 2009 � 2012�, DFID Nepal
Dixit, A, �Scoping Assessment on Climate Change Knowledge Platform in Nepal�, ISET-Nepal,
2010
FAO , � Global Forest Resources Assessment 2010�, Forestry Department, FAO
Immerzeel W W, Van Beek L P h and Bierkens M F P (2010) �Science 328�: 1382-1385
Maplecroft, �Climate Change Vulnerability Index�,
Ministry of Environment, �Compact on Climate Change in Nepal: An Understanding between the
Government of Nepal, Ministry of Environmental and development partners on ways to address
climate change challenges�, September 2009.
Ministry of Environment, �National Adaptation Programme of Action�, Government of Nepal,
September 2010
Ministry of Health and Population, �The Sector-Wide Approach in the Health Sector; Achievementsand Lessons Learned�, Government of Nepal, May 2010
Ministry of Finance, �Joint Evaluation of the Implementation of the Paris Declaration, Phase II
Nepal Country Evaluation�, Government of Nepal, 2010
Ministry of Forests and Soil Conservation, �The Future of Nepal's Forests, Outlook for 2020�,
Government of Nepal
Müller, B. � International Adaptation Finance: The Need for an Innovative and Strategic Approach� ,
Oxford Institute for Energy Studies, EV 42, June 2008
Müller, B. �The Time is Right! Devolution of funding decisions to designated national/regional
climate change funding entities�, November 2009, Oxford Institute for Energy Studies
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This research is linked to an Oxfam global policy brief and series of countryresearches on the governances of climate change funding in developing countries.The research is designed to inform Oxfam's advocacy on how climate changeadaptation funding should be managed in developing countries so that it fulfillsthe goals and needs of the marginalized and most vulnerable communities, witha particular focus for smallholder women farmers. Country researches have alsobeen conducted in Bangladesh, the Philippines, Cambodia, Vietnam and Ethiopia.Country briefs are also intended to feed into policy dialogue and advocacy at thenational and regional level.
GOVERNANCE OF CLIMATE CHANGE ADAPTATION FINANCE
IN NEPAL
MINDING THE MONEY
Country Programme Office, Nepal
Jawalakhel-20, LalitpurGPO Box 2500, Kathmandu
Tel: +977-1-5530574/ 5542881
Fax: +977-1-5523197
E-mail: [email protected]