USE OF COUNTRY SYSTEMS TO
MANAGE CLIMATE CHANGE
PAUL STEELE, UNDP
Overview
• County systems
• Climate expenditure/finance
• Why use country systems to
manage climate finance
• How to use country systems to
manage climate finance
• Conclusions
Country Systems for Climate Change:
It’s a plumbing job
Integrate climate into planning
Integrate climate to budgets
Country systems: plumbing
• Planning
• Policy coordination and
implementation
• Budgeting & financial management
• Procurement
• Monitoring and evaluation
Private Sector
Parliament
Civil Society
Planning
Reporting
Budget
Public
Finance
Auditing
•
•
•
•
Coherence
Predictability
Transparency
Gender Equity
Accounting
Procurement
Treasury
Climate expenditure/finance
• Climate expenditure is significant (3-15% of total
government expenditure )
• Domestic expenditures important
• Cross ministerial expenditure (eg Agriculture,
Infrastructure, Local Gov, Social protection, )
• International climate finance fragmented and
often outside country systems: donor trust funds,
GEF, Special Climate Fund, Adaptation Fund
• Green Climate Fund intended to consolidate
• Leveraging private finance is key
Climate finance and country systems:
Why?
• Advantages of using country systems
– Country ownership
– Transformational change: heart of economic
policy
– Mainstreaming across sector and subnational
budgets
– Scaling up and lower transaction costs
• But challenges of corruption, harder to monitor,
competing interests – political economy?
Climate finance and country systems:
How?
• Institutional reforms
• Planning
• Budget execution and
implementation
• Accountability and Monitoring
Private Sector
Audit
climate
expenditure
e.g.
Climate
policy in Annual
Plan
e.g.
Parliament
Civil Society
Planning
Reporting
Budget
Public
Climate Finance
Auditing
e.g. Climate
Key performance
indicators
•
•
•
•
Coherence
Predictability
Transparency
Gender Equity
Accounting
Procurement
Treasury
e.g.
Climate
Budget
marking
Country systems and climate finance:
Institutional reforms
• Budget process: public expenditures
and incentivizing private finance
• Promote climate finance units in
Ministry of Finance(Indonesia, India)
• Inter-ministry climate finance groups
(Bangladesh, Thailand, Cambodia)
• Local government needs climate
expertise
Country systems: Planning and
Budget execution & implementation
• Climate Fiscal Framework (Bangladesh)
• Climate impacts of capital budget assessed
(VietNam)
• Climate strategy costed for budget
(Cambodia)
• Local climate expenditure targets (Nepal)
• Public financial management for managing
climate finance (Bangladesh)
•
•
•
•
Country systems:
Accountability and monitoring
Climate included in performance based
budgeting (Bangladesh)
Assessing climate expenditure quality ie
cost-effectiveness (Indonesia)
Budget climate coding/tracking (US, EC,
Nepal, Indonesia)
Distributional impacts of climate finance
(Bangladesh)
Conclusions
• Country systems are the plumbing
• Climate finance – domestic is significant,
international fragmented and often
outside county systems
• Climate finance needs to flow through
these country systems
• But there are challenges that need to be
overcome – need to understand the
politic economy