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CAPACITY DEVELOPMENT FOR DEVELOPMENT EFFECTIVENESS FACILITY FOR ASIA AND PACIFIC. Climate finance and country systems: methodology for review. Neil Bird Research Fellow Climate and Environment Programme. Using country systems to manage climate change finance: a Global Forum

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Climate finance and country systems methodology for review

CAPACITY DEVELOPMENT FOR DEVELOPMENT EFFECTIVENESS FACILITY FOR ASIA AND PACIFIC

Climate finance and country systems: methodology for review

Neil Bird

Research Fellow

Climate and Environment Programme

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

2 December2013, Sheraton Incheon Hotel, Republic of Korea


CAPACITY DEVELOPMENT FOR DEVELOPMENT EFFECTIVENESS FACILITY FOR ASIA AND PACIFIC

Purpose of study

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

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


CAPACITY DEVELOPMENT FOR DEVELOPMENT EFFECTIVENESS FACILITY FOR ASIA AND PACIFIC

Sources of climate finance

For all countries:

  • National revenues

  • Domestic private sector

  • Foreign private flows

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

    • International climate funds

    • Donor funds (bilateral and multilateral)


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

CAPACITY DEVELOPMENT FOR DEVELOPMENT EFFECTIVENESS FACILITY FOR ASIA AND PACIFIC

Country ownership is considered central to effective development, and use of country systems is seen as a key driver of ownership.

Well-functioning government institutions are vital for successful development to occur.

Aligning international funding better with government priorities, and working more closely with government entities, has the potential to make obtaining better results more likely, not least because it allows for more cohesive planning processes and a whole-of-government approach.

Country systems influence access options for international climate finance.


Definitions: using country systems FACILITY FOR ASIA AND PACIFIC

CAPACITY DEVELOPMENT FOR DEVELOPMENT EFFECTIVENESS FACILITY FOR ASIA AND PACIFIC

Country – while ‘country ownership’ is often seen as going beyond the national government, there is consenus that ‘country systems’ means state institutions and processes.

Systems – going beyond public finance management and procurement processes.

Methodology encompasses 4 categories of system:

  • National policy processes

  • Financial management systems

  • Implementation procedures

  • Accountability systems


Background to methodological framework

CAPACITY DEVELOPMENT FOR DEVELOPMENT EFFECTIVENESS FACILITY FOR ASIA AND PACIFIC

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

  • A country-led understanding of what ‘climate finance’ should cover (but excluding private sources for now).

  • Assess measures related to country system strengthening.

  • Existing assessments of the strength and use of country systems are likely to be adequate for the analysis we are carrying out/new measures are unlikely to be better.

  • Gender-sensitivity of methodology.


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

CAPACITY DEVELOPMENT FOR DEVELOPMENT EFFECTIVENESS FACILITY FOR ASIA AND PACIFIC


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

CAPACITY DEVELOPMENT FOR DEVELOPMENT EFFECTIVENESS FACILITY FOR ASIA AND PACIFIC


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

CAPACITY DEVELOPMENT FOR DEVELOPMENT EFFECTIVENESS FACILITY FOR ASIA AND PACIFIC


CAPACITY DEVELOPMENT FOR DEVELOPMENT EFFECTIVENESS FACILITY FOR ASIA AND PACIFIC

Country reviews

Early reviews to test this methodology are now being carried out in five countries:

  • Colombia

  • Germany

  • Indonesia

  • Uganda

  • United States of America


Country assessments – the context FACILITY FOR ASIA AND PACIFIC

Annual CO2 emissions (kt)

CAPACITY DEVELOPMENT FOR DEVELOPMENT EFFECTIVENESS FACILITY FOR ASIA AND PACIFIC


Country assessments – the context FACILITY FOR ASIA AND PACIFIC

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

CAPACITY DEVELOPMENT FOR DEVELOPMENT EFFECTIVENESS FACILITY FOR ASIA AND PACIFIC

Germany – 8

USA – 15

Colombia – 57

Indonesia – 88

Uganda - 134

Increasing vulnerability


Spending on Climate Change in Uganda FACILITY FOR ASIA AND PACIFIC

CAPACITY DEVELOPMENT FOR DEVELOPMENT EFFECTIVENESS FACILITY FOR ASIA AND PACIFIC

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


Criterion 1: FACILITY FOR ASIA AND PACIFIC

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

CAPACITY DEVELOPMENT FOR DEVELOPMENT EFFECTIVENESS FACILITY FOR ASIA AND PACIFIC

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


Criterion 2: FACILITY FOR ASIA AND PACIFIC

Public climate change finance is predictable over the budget year

CAPACITY DEVELOPMENT FOR DEVELOPMENT EFFECTIVENESS FACILITY FOR ASIA AND PACIFIC

Annual predictability of donor funding is also low, with less than half of relevant committed funds disbursed each year since 2008 .


Criterion 5: FACILITY FOR ASIA AND PACIFIC

Information on public climate change finance is publicly available

CAPACITY DEVELOPMENT FOR DEVELOPMENT EFFECTIVENESS FACILITY FOR ASIA AND PACIFIC

Source:www.budget.go.ug

The challenge is that many climate change relevant expenditures have not yet been identified within the national budget documentation.


Climate finance and country systems

CAPACITY DEVELOPMENT FOR DEVELOPMENT EFFECTIVENESS FACILITY FOR ASIA AND PACIFIC

  • Studies of how both domestic and international climate finance uses country systems have just begun.

  • Evidence on use and strength of country systems is urgently needed to inform national and international policy on climate finance

  • Countries will benefit from being able to exchange lessons and innovation in this regard

  • Country assessment and methodology development should be completed in January 2014


Thank you neil bird

Thank you Neil Bird

Overseas Development Institute

203 Blackfriars Road, London, SE1 8NJ

[email protected]


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