Finance Clinic
Climate Public Expenditure and
Institutional Reviews (CPEIRs)
Rakshya Thapa
Regional Technical Specialist
UNDP
LECB Annual Global Meeting
25-27 October 2013, Hanoi
1
Overview
•
•
•
•
CPEIRs – Introduction (20 mins)
Q&A and Discussions (15 mins)
Group Exercise (45 mins)
Reporting on the Group Exercise (10)
2
Introduction
Objective: To review allocation, management and results of
public expenditures related to climate change
Core aspects:
• Assessment of current policy priorities related to climate
change
• Review of institutional arrangements
• Analysis of public expenditure and its relevance to
climate change
How to quantify & track climate change related expenditures
in the national budgetary system?
3
Policy, planning and budgeting cycle
Objective: To review allocation, management &
Policy
makingof
process
results
public expenditures related to climate
1. REVIEW POLICY
change
Key-question: How is climate change2.reflected
in
SET POLICY AND
PLANNING
6. EVALUATE AND AUDIT
national policies,
institutions & publicUNDERTAKE
expenditures?
ACTIVITY
Implementation: Led by government through cross
5. MONITOR activities and
3.
MOBILIZE AND
government steering
group
chaired by
Ministry
of
ACCOUNT for
expenditure
ALLOCATE RESOURCES
Finance or Planning
 CPEIRs build on WB methodology
for
4. IMPLEMENT PLANNED
ACTIVITIES
PER/PEIR/PEER
Budgetary process
 Add “climate-relevance” dimensions to analysis
4
The CPEIR Methodology
• Methodology builds upon the WB Public Expenditure
• The approach :
– compilation of relevant documentation derived from official
sources and public documents.
– Individual semi-structured interviews with key informants
– research largely at the national level but local analysis
included
• Studied led by a multidisciplinary team of researchers and
overseen by cross government steering group
5
The CPEIR Methodology
The analysis constitutes:
• Review of policies, institutional arrangement and public
expenditure across the whole of government
• Define what constitutes ‘climate relevant’ expenditure
• Classify public expenditure into categories of varying levels
of climate relevance
– Identify budget line codes with High, Medium and Low
relevance to climate change
• Composition of public expenditure may vary from country
to country comprising both budgetary and off budget
expenditures
6
Policy, institutional & expenditure
findings
• Link climate policy to budget, so climate strategies are
prioritized and costed
• Link budget to climate policy, so climate is part of budget
framework
• Coordination by finance & planning ministries with technical
input from environment and line ministries
• Large proportion of climate relevant’ expenditure embedded
in sectors with other primary objectives
• Local government also a key channel for climate finance
• Between 3-17% of the total budget deemed to be ‘climate
relevant’
7
Expenditures & sources
Climate relevant expenditures as a proportion of total expenditure & GDP
8
Few major players with local channels key
Highest climate relevant spending agencies as proportion of total ‘climate budget’9
Indonesia Case Study
Mitigation Fiscal Framework
• Assess the public expenditure to realized GHG reduction
target of 26% by 2020
• Reviews expenditure of climate change actions and its cost
effectiveness
• Focus sectors such as forestry, peatlands, energy, transport
• Current patterns of expenditure meet only 20% of the
national targets
• Therefore, further action and increase in financing required
• Inter-ministerial coordination necessary to institutionalize
and manage the MFF
• Considering the development of budget marking and scoring
system
10
Lessons Learned
• CPEIRs should not be a one off exercise. Periodic review
helpful on how response to climate change evolving.
• Need for internationally consistent methodology for defining
climate relevant expenditures
• Focus on the “dirty” expenditures which may undermine the
national climate response
• Climate Fiscal Framework be developed with Ministries of
Finance and Planning
– to identify potential sources of funding and how they can
be best accessed, combined and sequenced
– Outline role of different sectors of economy
11
Conclusions
CPEIRs important tool in public expenditure management
• Set a baseline and budget execution history against which
future expenditures can be measured and monitored
• Encourage a holistic & comprehensive view of climate
expenditures
• Functional markers to climate change expenditures to
track more easily over time
• Foundation to establish baseline and MRV framework for
financial support for LEDS
12
Thank you
For further information please contact
rakshya.thapa@undp.org
CPEIRs Methodological note & Asia-Pacific case studies:
www.aideffectiveness/climatechangefinance
13
Group Exercise (55 mins)
• Each working group assigns a note-taker/reporter and a
timekeeper
• Key questions - 45 mins
– How does your country track (or plan to track) climate finance?
What are the challenges you foresee in tracking climate finance?
– What do you think of the suitability of the CPEIR tool for MRV of
financial support (is it too granular/high level)?
– Do you think the CPEIR is suited to capturing both public and
private sector flows?
• Reporting back – 10 mins
14