OECD DAC Rio markers versus MDB Joint approach
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OECD DAC Rio markers versus MDB Joint approach How do they compare? OECD Workshop with IFIs on tracking climate finance 15 February 2013
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The Rio marker system is a methodology originally designed to produce descriptive rather than quantitative data. The current emphasis is on measuring climate finance, which would require a more quantitative method. This session explored whether the Rio marker system can be refined on the basis of the MDB approach.
Transcript of OECD DAC Rio markers versus MDB Joint approach
OECD DAC Rio markers versus MDB Joint approach
How do they compare?
OECD Workshop with IFIs on tracking climate finance 15 February 2013
Similarities
Definition of « mitigation »
Activities that promote « efforts to reduce or limit greenhousegas (GHG) emissions or enhance sequestration ».
Definition of « adaptation »
Activities that address or improve climate resilience.
Basis for measurement
Commitments (approvals)
Binary assessment
The classification of a project (Rio markers) or project component or sub-component (MDBs) as mitigation, adaptation, or both, is binary (100% qualifies, or 0%). In the case of MDBs, it is the aggregation of components that results in a share of project’s cost qualifying as climate-change-related.
Overlap between figures for mitigation and adaptation
In DAC statistics, scale of overlap is known, published separately, and netted out in total figures on climate-related aid.In Joint MDB reports, scale of overlap not indicated (but will be netted out in future).
Differences
Eligibility criteria
Rio markers are purpose-based and identify those activities that « intend » to adress climate concerns (« significant » or « principal » score). => gives an indication of « policy objectives » (qualitative assessment).
For mitigation, MDBs’ methodology is activity-based (typology of qualifying activities). =>measures climate co-benefits (quantitative data) However, for adaptation, it is based on purpose, context of climate vulnerability and activity.
Granularity
Rio markers are assigned at project level while MDBs disaggregate their projects into components and sub-components and report on climate finance at that level.=> MDB approach measures climate-related components’ share in project cost (quantitative data) while Rio markers represent proxies.
Differences – cont’
Periodicity
DAC statistics are collected on a calendar year basis for all donors.Joint MDB data are based on fiscal years which may differ among MDBs.
Types of instrumentsMDB data include guarantees (contingent liabilities), which are not covered in DAC statistics.
Recipient countriesDAC statistics relate to a common List of ODA recipients. MDB data also include some EU countries.
Conclusions
Rio markers and the MDB Joint approach have similarities but
MDB methodology is more restrictive:
- The « typology » of mitigation activities is an exhaustive list of qualifying activities and provides for a more objective assessment than the Rio markers.
- For adaptation, although not based on an exhaustive list, MDB methodology seems still more conservative than Rio markers (purpose- but also context- and activity-based).
MDB methodology is more quantitative
- Undertaking the screening at the level of components results in a more precise quantification than Rio markers.
Questions for discussion
• Could the MDB approach be applied to bilateral donors’ activities?
• infrastructure projects versus capacity building
• aid agencies versus DFIs
• number of transactions
• corporate reporting
