UNEP Fit for the Funds Webinar: Measuring the Effectiveness of National Climate Finance Delivery With ODI and Frankfurt School 22 May 2013

Transcription

1 UNEP Fit for the Funds Webinar: Measuring the Effectiveness of National Climate Finance Delivery With ODI and Frankfurt School 22 May 2013

2 National effectiveness of climate finance delivery Neil Bird Climate and Environment Programme 22 May 2013

3 Effectiveness of climate finance delivery This presentation is based on an ODI working paper that assesses three interlinked elements of the government administration: 2 1. the policy environment that supports climate change expenditures 2. the institutional architecture that determines relevant roles and responsibilities; and 3. the public financial system through which climate change-related expenditures are channelled.

4 Objectives of the analysis This analysis is intended to show how climate change-related expenditure passes through the country s budgetary systems in response to national policy setting and institutional demands. The analysis aims to assist the development of a strategic financing framework for climate change that promotes a whole-of-government approach to climate change actions through the use of country systems. We hope the analysis can act as a building block in developing a national framework that identifies climate change actions, assesses the demand for climate funds, as well as the availability of finance from domestic and international sources. 3

5 Origins of this work stream country studies completed in Nepal, Bangladesh, Thailand, Cambodia & Samoa 2. No explicit analytical framework but a focus on policy, institutional and budgetary elements of analysis

6 Challenges for this type of analysis Measuring the effectiveness of public spending on climate change actions is fraught with difficulties, given: 1. the definitional ambiguity of climate change related actions 2. a lack of clarity on what effectiveness actually means, and 3. the complexity of public funding flows 5

7 Defining climate finance Defining Climate Finance what does the concept cover? Climate change relevant expenditures 6

8 Effectiveness of climate finance delivery Effectiveness of what? We approach the effectiveness question through a focus on institutional and governance processes, emphasising the earlier stages of the impact continuum. Effectiveness measures based on substantive outcomes associated with the national response to climate change (e.g. the reduction of emissions) will require further study. 7

9 Effectiveness of climate finance delivery Developing an explicit analytical framework to understand the question of effectiveness The principles were drawn from the international literature and indicate what climate finance delivery might look like in an ideal world. The criteria and indicators differ in nature, as they are limited to reflect a progression towards compliance with the principles, and have been determined by the research team. These indicators are not intended to reflect an ideal state, but provide a means by which current practice can be interpreted and highlight important areas for progress. 8

10 Effectiveness of climate finance delivery Principles of effectiveness We have identified 4 principles of policy development and implementation that are relevant to the effective delivery of climate change finance: ease of implementation, legitimacy, coherence and transparency. A further 3 principles relate to institutional performance: coordination, innovation and local anchorage. In terms of public expenditure, the 4 principles relate to the execution of the budget cycle: planning, execution, reporting and external audit. 9

11 Effectiveness of climate finance delivery Policy requirements for effective climate finance delivery Climate change policies shall be designed for ease of implementation The legitimacy of climate change policies shall be recognised by stakeholders Climate change policies shall be coherent with national development policies Climate change policies shall promote transparency in climate finance delivery 10

12 Effectiveness of climate finance delivery Institutional requirements for effective climate finance delivery A national mechanism shall exist for coordination between institutions involved in climate finance delivery Institutions shall demonstrate a strong ability to change and innovate Climate change institutions shall be anchored locally 11

13 Principles -> Criteria 12 Effectiveness of climate finance delivery -> Indicators Principle Criteria Indicators A national mechanism shall exist for coordination between institutions involved in climate finance delivery Leadership of the national response to climate change in terms of climate finance delivery is established within the government administration Institutional arrangements are in place for inter-agency collaboration The national lead institution has appropriate authority to determine or advise on what constitutes climate finance. The national lead institution provides specific inputs and guidance into the budget process and the budget on what constitutes climate finance. Mechanisms for inter-agency collaboration between climate change institutions and other national institutions can be identified. Reports on inter-agency collaboration and climate financed activities are available to the public.

14 Effectiveness of climate finance delivery Public expenditure frameworks to assess the effectiveness of climate finance delivery 13 Climate change expenditure shall be planned and budgeted for in the annual budget formulation process Climate-related expenditure shall be executed through government systems using the budget Climate-related expenditure shall be subject to reporting and accounting Climate-related expenditure shall be subject to external oversight and scrutiny

15 14 Potential impact

16 ODI is the UK s leading independent think tank on international development and humanitarian issues. We aim to inspire and inform policy and practice to reduce poverty by locking together high-quality applied research and practical policy advice. The views presented here are those of the speaker, and do not necessarily represent the views of ODI or our partners. Overseas Development Institute 203 Blackfriars Road, London, SE1 8NJ T: n.bird@odi.org.uk

17 National Climate Finance: The link of MRV and the Monitoring & Evaluation of Results 22 May 2013

18 Building blocks of the national climate finance architecture Political functions High-level CC/CF Unit Interministerial CC/CF Committee Line ministries: Agriculture, Energy, Environment, Tourism, Health, Finance etc. Strategic functions Financial functions National Climate Finance Institutions Fiduciary agent, trustee (e.g. National Development Bank) Stratgic partners e.g. academic sector NGOs Municipalities Others Executing entities 2

19 One of the essential building blocks the NCFI Acquires/collects sources of funds and directs them to climate change activities that promote national priorities. Blends finance from public, private, multilateral and bilateral sources Coordinates country-wide climate change activities Key actor in the development of national CC strategies/ implementing CC policies Capacity-builders and nurturers of an emerging group of executive entities (e.g. NGO) becoming involved in CC Technical expert who can work with public and private agencies to develope agile and effective projects Overseas projects and associated Monitoring and Evaluation (M&E) and links to Monitoring, Reporting, and Verification (MRV)

20 MRV and M&E of Climate Finance Interna'onal Climate Finance Source Comes with direct access modalities Determines the MRV standards Na'onal Climate Finance Source Na'onal Climate Change Strategy and Objec'ves Defines roles and responsibilities Mobilizes and manages climate finance and reports (MRV) Determines objectives and indicators Na'onal Climate Finance En'ty Project co-ordination and M&E Line Ministries Implemen'ng Agencies (e.g. NGOs)

21 THANK YOU FOR YOUR ATTENTION Carola Menzel International Advisory Services Frankfurt School of Finance & Management Sonnemannstrasse Frankfurt am Main Phone: +49 (0) Fax: +49 (0)