Climate Change Finance and Development Effectiveness Tamara Levine, Development Cooperation Directorate, OECD Maseru Lesotho, October 2011
Development Assistance Committee DAC A unique international i lforum where donor governments and multilateral organisations, such as the World Bank and the United Nations, come together to help developing countries reduce poverty and achieve the Millennium Development Goals.
The role of the OECD and the DAC OECD/DAC: leading source of statistics, good practice (guidelines & principles) and review on development co operation operation Mobilises official development assistance (ODA) Helps change behaviour in the international aid system to increase its effectiveness (aligned, harmonised, results focused and untied) Develops ways to assist poor performing, conflict prone countries Supports increased attention by OECD members to policy coherence for development.
DAC & Subsidiairy Bodies Promoting good practice, reducing vulnerability GENDER CONFLICT & FRAGILITY WP ON AID EFFECTIVENESS ENVIRONET DAC POVNET EVALUATION WP ON STATISTICS GOVNET
Development Finance: ODA trends
How to Manage This Source; Don De Savigny & COHRED
The Importance of Predictability: WhatRwandaexpected & whatitreceived 800 Forward spending information (overall country allocations CPA) 700 600 US SD millions 500 400 300 200 100 2008 2009 2010 2011 2012 2013 Actual disbursements Indicative disbursements based on on going commitments (i.e. signed projects and programmes) Indicative forward spending (collected through the DAC survey)
Why does aid effectiveness matter?
Paris Declaration: A Milestone for Aid Effectiveness Agreed in 2005. Unprecedented consensus; 56 action oriented commitments for both Donors and Partners countries; Built in mechanism for monitoring progress at country and global levels (12 Indicators); and
Paris Declaration: A Milestone for Aid Effectiveness
Principle 1: Ownership Partner countries exercise effective leadership over their development policies, and strategies and co ordinate development actions. Progress: More partner countries have sound national development strategies
Principle 2: Alignment Donors base their overall support on partner countries national development strategies, institutions i i and procedures Progress Improved country system in 1/3 of countries, but a decline observed din others No progress in unting aid Aid not captured in country s budget
Example: World Bank s Environmental Assessment In 2005, the World Bank took an initiative to make use of Environmental Impact Assessment (EIA) procedures of partner countries, when they are judged to be as rigorous as the Bank s EIA. In this way, the Bank s projects can go through the y, p j g g country systems, without creating a parallel process under the Bank s standard.
Principle 3: Harmonisation Donors actions are more harmonised, transparent and collectively effective. Progress Technical co operation operation better co ordinated ordinated Little progress towards common or joint arrangements among donors
Kenya Joint Assistance Strategy (KJAS) Kenya Joint Assistance Strategy is a collective Strategy by 17 bilateral and multilateral donors. Canada, Denmark, EC, Finland, France, Germany, Italy, Japan, the Netherland, Norway, Spain, Sweden, UK, US, AfDB, UN, World Bank. KJAS serves as a basis for harmonised donor support for the implementation of the national development strategy, including Kenya s 2030 vision.
Principle 4: Managing gfor result Managing resources and improving decisionmaking for result Progress: Higher quality results oriented frameworksarein Higher quality results oriented frameworks are in place
Principle 5: Mutual Accountability Donors and partners are accountable for development results Progress: More participatory approach in development strategies, but some challenges for civil society activity in some countries
The Aid Journey Since Agreement tto the MDGs Monterrey Consensus (2002) Rome HLF on Harmonisation (2003) Paris Declaration on Aid Effectiveness (2005) Accra Agenda for Action (2008) Dili Declaration on fragile states (2010) Bogota Statement on SSC (2010) Korea HLF (29 Nov. 1 Dec. 2011) 18
Outline 1. Aid Effectiveness and Overview 2. Climate Finance 3. Climate Finance and Development Effectiveness
Current Climate Finance Commitments post Cancun USD 30 billion in Fast Start Finance (FSF) over 2010 2012 Longer term goal of raising USD 100 billion per year by 2020 from public and private sources Establishment of a Green Climate Change Fund Establishment of a Standing Committee of hte Establishment of a Standing Committee of hte Financial Mechanism
Climate Change Funds Hatoyama Initiative public sources International Climate Fund Hatoyama Initiative private sources Clean Technology Fund GEF Trust Fund Climate Change focal area (GEF 5) GEF Trust Fund Climate Change focal area (GEF 4) Amazon Fund (Fundo Amazônia) Pilot Program for Climate Resilience Forest Investment Program International Climate Initiative Scaling Up Renewable EnergyProgram for Low Income Countries Least Developed Countries Fund Global Climate Change Alliance International Forest Carbon Initiative Adaptation Fund Forest tcarbon Partnership Facility Global Energy Efficiency and Renewable Energy Fund Special Climate Change Fund UN REDD Programme MDG Achievement Fund Environment and Climate Change thematic window Congo Basin Forest Fund Strategic Priority on Adaptation Indonesia Climate Change Trust Fund Strategic Climate Fund 0 2000 4000 6000 8000 10000 12000 Pledged Amount (USD million)
How much money is actually delivered? 41% 61% 100% Current disbursement (11.3 bn) Ideal disbursement (16.7 bn) assuming the funding is disbursed monthly at a constant rate. Full disbursement (27.3 bn) Source: Bloomberg New Energy Finance
Current Funds: Pledged, deposited, approved and disbursed d 35.000 30.000 30.888 25.000 iom) mount (USD mill 20.000 15.000 A 10.000 10.608 9.336 5.000 0 Pledged Deposits Approved spend Disbursed 1.920
Country Level Implementation Paris and Accra Implementation
Outline 1. Aid Effectiveness and Overview 2. Climate Finance 3. Climate Finance and Development Effectiveness
Examples Heard Over The Last Two Days * Linkages between planning eg Napa s and budgets and sector plans Malawi NAPA = 2 projects, sustainable land management, climate resilience in agriculture and rural livelihoods, emphasized no mechanism to monitor. Expect Adaptation Fund sources. Now developing NAMA Tanzania Uganda * Time limitations constraining NAPA development process
Characteristics of the National Management of Climate Change Institutional Elements Cameroon Ghana Kenya Morocco South Tanzani Africa a CC Integrated in national development strategy National CC Committee defines policy Enabling Legislation in place (CC Act) Operational National CC Strategy Operational National CC Action Plan National CC Results Framework in place President/Prime Ministerial level active co ordination Parliamentary Committee providing oversight Finance/Treasury CC Specialist CC Unit Tracking system captures all CC funding CC Desks in each ministry Donor coordinating group of all funders in place Donor Government Round table with all funders UNFCCC Focal Point REDD Focal lpoint
RESULTS FROM THE 2005 AND 2008 SURVEYS ON TRACK TO REACHING COMMITMENTS Operational Development 1 Strategies 2 3 4 5a 5b Reliable Public Financial Management Systems Aid flows are recorded in countries' budgets Technical assistance is aligned & coordinated Donors use country PFM Systems Donors use country procurement systems 2005 2010 Targets 17% 75% 36% 50% 42% 85% 48% 50% 40% [80%] 39% [80%] 6 Donors avoid parallel PIUs 1832 611 7 Aid is more predictable 41% 71% 8 Aid is untied 75% 88% [100%] 9 10a 10b 11 12 Donors use coordinated mechanisms for aid delivery Donors coordinate their missions Donors coordinate their country studies Sound frameworks to monitor results Mechanisms for mutal accountability 43% 66% 18% 40% 42% 66% 7% 38% 22% 100%
SPECIAL EFFORTS NEEDED Operational Development 1 Strategies 2 3 4 5a 5b Reliable Public Financial Management Systems Aid flows are recorded in countries' budgets Technical assistance is aligned & coordinated Donors use country PFM Systems Donors use country procurement systems 2005 2010 Targets 17% 75% 36% 50% 42% 48% 85% 48% 50% 40% [80%] 39% [80%] 59% 6 Donors avoid parallel PIUs 1832 1601 611 7 Aid is more predictable 41% 46% 71% 8 Aid is untied 75% 88% [100%] 9 10a 10b 11 12 Donors use coordinated mechanisms for aid delivery Donors coordinate their missions Donors coordinate their country studies Sound frameworks to monitor results Mechanisms for mutal accountability 43% 66% 18% 40% 42% 66% 7% 38% 22% 100%
OFF TRACK FOR 2010 Operational Development 1 Strategies 2 3 4 5a 5b Reliable Public Financial Management Systems Aid flows are recorded in countries' budgets Technical assistance is aligned & coordinated Donors use country PFM Systems Donors use country procurement systems 2005 2010 Targets 17% 24% 75% 36% 50% 42% 49% 85% 48% 50% 40% 45% [80%] 39% 43% [80%] 59% 6 Donors avoid parallel PIUs 1832 1483 611 7 Aid is more predictable 41% 45% 71% 8 Aid is untied 75% 88% [100%] 9 10a 10b 11 12 Donors use coordinated mechanisms for aid delivery Donors coordinate their missions Donors coordinate their country studies Sound frameworks to monitor results Mechanisms for mutal accountability 43% 47% 66% 18% 21% 40% 42% 44% 66% 7% 9% 38% 22% 26% 100%
Measuring Aid for Climate Change Climate markers are statistical codes employed by OECD DAC to measure the aid targeting at climate change mitigation ii i and adaptation. Climate change mitigation (2002 ) Climate change adaptation ti (2010 )
Climate change markers criteria Climate Change Mitigation Marker The activity contributes to a) the mitigation of climate change by limiting anthropogenic emissions of GHGs, including gases regulated by the Montreal Protocol; or b) the protection and/or enhancement of GHG sinks and reservoirs; or c) the integration of climate change concerns with the recipient countries development objectives through institution building, capacity development, strengthening the regulatory and policy framework, or research; or d) developing countries efforts to meet their obligations under the Convention. Climate Change Adaptation Marker a) the climate change adaptation objective is explicitly indicated in the activity documentation; and b) the activity contains specific measures targeting the definition above. Definition of adaptation: It intends to reduce the vulnerability of human or natural systems to the impacts of climate change and climate related risks, by maintaining or increasing adaptive capacity and resilience. This encompasses a range of activities from information and knowledge generation, to capacity development, planning and the implementation of climate change adaptation actions.
Logical Steps for marking Q1. What objectives are stated in the project/programme document? Q2. Do any of the stated objectives match Criteria for eligibility of Rio Markers? Yes No Q3. Would the activity have been undertaken without this objective? No Yes 2 1 0 Principal Significant Not targeted
Constn nat 2008 USD Million 1200 1000 800 Aid for climate change mitigation: Who is receiving? (Average, 2007 2009) 2009) Top 10 countries account for 60 % of climate change aid between 2007 2009 600 400 200 0 India Indonesia China Thailand Viet Nam Tunisia Bangladesh Turkey Morocco Philippines
Aid for Cliamte Change: Top 10 Activities (Average, 2007 2009) Rail Transport Environmental policy and administrative management Non renewable Energy Renewable Energy Foresty development and policy Water supply and sanitation large systems Road Transport Energy policy and administrative management Multisector Aid Electrical transmission/ distribution Others 0 500 1000 1500 2000 2500 Constnat 2008 USD Million
For more information i tamara.levine@oecd.org